Translator: Rhonda Jacobs Reviewer: Peter van de Ven Well, I'm an entrepreneur, and I learned one of my most important business lessons on a day I nearly crashed an airplane. I was a private pilot, in training - this was about 15 years ago - and it was time for my first cross-country solo flight, which is hundreds of miles away from my home airport, alone in the plane, it's the first time I'd done this, and I was pretty nervous, right? And I get up in the flight, and my low voltage light comes on on my instrument panel.
And, you know, they don't teach you much about the plane hardware when you're learning to fly; I had maybe 20 hours of flight time under my belt. And I didn't really know what that meant, so my first instinct, of course, is tap the light, but that doesn't change anything. (Laughter) Next, I do what seems natural at the time, I check my other instruments.
And one by one I scan through my instrument bank, and every instrument says everything's fine, except for the low voltage light. I have plenty of gas, my navigation aid, I'm on course, I'm not losing altitude, air speed's great, everything's fine. Except the low voltage light.
So what did I do? Well, I kind of figured, it must not be that big of a problem, right? Only one instrument is telling me anything's wrong.
So I'll just ignore it, and I'll keep flying. Turns out that that's a really bad decision. (Laughter) I nearly crashed the plane.
I ended up completely lost, in a storm, and violating international air space by a major airport; it was very bad. And it all started when I out-voted the low voltage light. Well, I did make it down, a little shaken but unscathed.
And I realized, at this point, that I'm doing the same thing in my organization. Often, when we show up in a company, it's us humans that become the "censors," the instruments. Right?
We're sensing reality for that organization. It's through us that our companies get to be aware of their world and respond to it. And often, it's one lone instrument that senses something that no one else does, that becomes that low voltage light tuned into information that's critical when everyone else is saying, "You know what?
I just don't see it. I think it's fine. " And as a CEO and a business leader, I had been making that mistake - I had been ignoring the low voltage lights in my organization.
So that started me on a quest: How do I build an organization where everybody gets to bring all of their wisdom, all of their gifts, all of their talents, and there's no risk that we out-vote somebody that has some critical insight. And, you know, for a while I worked on myself being a more conscious leader. My other leaders in my organization - I worked on the culture.
I tried to build an organization where the people were as aware and mature as they could be. And you know what? That didn't solve it.
I realized that there was something deeper at play that was getting in the way of one person who sensed something important from acting on it in the company. And it's almost like, I realized, it's almost as if our companies are perfectly designed to out-vote the low voltage lights, today. Something about the fundamental structure and system of how we organize and how we scale and how we build companies is stopping everyone from bringing all of their insights and all their talents.
So over the years that followed, I experimented. I used my company as a laboratory, and I experimented with what alternate systems and structures could we find. And what I eventually came up with, I call a new social technology.
Right? A social technology is not a piece of software or hardware, it's the way we humans show up and interact. Democracy is a social technology.
I was looking for a new social technology to use in a company, a new way to organize and build and grow. And we eventually called it holacracy. I'll share a little bit about it with you today, but first, let's look at the social technology we know a little more about, a thing or two, which is the management hierarchy.
Right? This is what we're used to in organizations today. We have bosses.
Bosses break down the work. They hold people accountable. They do some things that are really important.
And as we look for alternate technologies, we need to not lose the importance of breaking down the work, having accountability, alignment and all these things. Unfortunately, when we have management hierarchies, we often have some bureaucratic artifacts and things that get in the way. We also have some interesting, messy human dynamics, like sometimes how it really works.
(Laughter) Right? (Laughter) Alright, so you've seen one or two of these at play, perhaps. I think I was guilty of maybe one or two of these myself, right?
So, you know, we have messy power relationships sometimes in our organizations. And I was looking for something different. and we see something different, though, at play.
We see another way of achieving order around us all the time, if we just look at how a city functions, we look outside the world around our organizations, and we look at the amazing amount of order we see at play in our lives that don't require bosses. So, you know, I flew in here through multiple airports, got a ride, got to a hotel, checked in. I transacted with numerous other businesses along my journey, and it all just worked.
Right? There were taxis available to take me places, a hotel to house me. All of this order is there, yet there's no boss directing it all; there's no one saying, Okay we need a taxi to pick up Brian at the airport right here, it doesn't have to happen that way.
In fact, I don't need a boss directing my life. I'm free to pursue my own purpose in life as best I know how. Right?
To use my autonomy, my intelligence to transact my life and to engage with others doing the same. And what enables that is a nice system of rules. I know not to go take my neighbor's car when I want to drive to the airport.
I take my own car, right? I have some boundaries. Right?
There's a system, a framework of rules that allows order to show up spontaneously when it's needed. It's an emergent order that happens when we have the right set of rules. We don't need bosses directing us when we have the right set of rules.
So how do we bring this into an organization? What does that look like? That's really the question that holacracy answers for us; it gives us a system - a system of rules, a framework to get order without bosses.
Let's look at some of the big shifts that it brings into an organization. One is, something we're used to in organizations is the static job description, right? How many of you, by the way, in your companies, within the past 24 hours or so, have run to your job description to figure out with real good clarity what's needed from you today?
Right? Probably not many. They are typically useless.
They're out of date by the time they roll off the printer. Holacracy replaces that with a very different kind of job description, if you will, or a role description. And they're dynamic; they're changing constantly.
They're not somebody's good idea that they invented in their own head, a year ago, of what you should be doing. They're the result of you and your colleagues working together every day and trying to figure out, What do we need to pay attention to to get the work done? And there's a process for capturing that in a set or roles.
They give you real grounded clarity that you do want to go look at, often every day, because it gives you real information about what we've learned together and how we should work together. And the other thing here is when you have a role, you need the authority and autonomy to go execute it in an organization. And with most companies we see the management hierarchy trying to delegate authority.
But we all know, really, who's in charge. Right? And when the boss says something, you know - the boss gives you a "suggestion.
" You know what that kind of means, right? With holacracy, it's truly a distributed authority paradigm, much like our city example, our real lives, right? I know that I have the authority and autonomy to live my life, to use my car and my computer, and my neighbor doesn't.
You know, there's no boss to tell me what to do with my property, my life. And that's what holacracy brings into an organization. So when you have a role, you have the autonomy to execute it.
There is no boss to contradict you. It is yours to lead. Which can also be uncomfortable because it's yours to lead.
It's your role. You have true distributed authority. And so does everyone else.
Again, my neighbor has his authority; I have mine. The same is true in an organization running with holacracy. We each have authority; it's different authority.
No one has authority over someone else; it's distributed authority. Another key shift here is - Anyone been through the large-scale re-orgs? You know, every few years or so, right?
Instead of that, holacracy says, You know what? We do need to re-org. We need to do it in small micro-adjustments constantly, throughout the company.
So there is a process, it's called a governance process, that holacracy adds. And it's done in every team. And what it's doing is inviting everyone who works on that team to update those dynamic roles, to encode more clarity, more transparency of what do we really need to do to work together better.
This governance process happens in every team as we learn together, and we're constantly re-organizing our team in little ways. So change becomes a constant distributed function of the organization. And finally, anyone master the art of getting change done through politics?
You kind of have to in a lot of organizations today. If you really want to get change to happen, you've got to learn to play the political game. I learned early on that if the boss didn't see whatever it was I thought was needed, it wasn't going to get very far.
So if you want to enact change, you've got to play the politics. Well, instead of that, what holacracy gives you is a transparent set of rules - rules of the game for how to enact change. So instead of having to go and convince everyone and build consensus, anyone been in the kind of painful meetings where you're trying to build buy-in and consensus with everyone else in the room?
And you get through hours of meeting just trying to do that and don't make much in the way of actual work or decisions? I'd much rather go into a disciplined process that allows me the ability to sense something that I think should be better, and bring a proposal to change it, and a process to hold that so I don't have to play the politics and get the buy-in and consensus and all that. Holacracy adds that in every team - a way, a process, a governance process, again, to change things.
And those rules are held just like they are in society, in a constitution. So the first move we make when my company helps others adopt holacracy use this practice, when we go into an organization and they've kind of gotten a taste of this, and they're pretty sure they want to do it, the first move is for the CEO to sign a declaration ceding their authority to run the company however they want into a constitutional rule-set. This is an interesting shift.
Can you imagine that - if you were a CEO to cede that authority - it's kind of like the dictator, you know? giving way, stepping back and saying, "You know what, there is a better way to run this country. " And I'm going to let go of my authority to make that happen and allow it to be distributed.
It's the same within an organization here. It's a distributed authority paradigm held in a rule system in a constitution. So we have the organizations around the world now that are using holacracy are all using that constitution, that set of rules.
They're transparent, they're written down, everyone can see them, and everyone is bound by the same rules; no one is above the law. So let me show you an example of how this looks in practice. Here's an example of one of these roles.
And remember, this is not just some job description written in advance, this is the result of our team learning together and figuring out what do we really need for me in my holacracy spokesperson role, which is the role that brings me here today. And I have a purpose; every role in holacracy has a purpose. This is a purpose-driven operating system.
The whole point of holacracy is to help an organization express some higher purpose. And that breaks down into every role. So my role has a purpose, and with that constitution at play, my autonomy is protected; I have the authority in this role to do anything that makes sense to me to express the purpose of my role or one of the accountabilities that others are counting on me for.
I have the authority to take any action that makes sense to me, as long as I don't violate some other role's property, just like I do in real life. I can do whatever makes sense to me as long as I don't violate somebody else's property or their person. Same here.
So, really interesting to show up in this paradigm where there's no boss to ask permission for. I don't need permission from anyone. Alright?
In fact, in most organizations, you don't really have the authority to do something unless you go out and get permission of some sort. You have to ask first. With holacracy, you have the authority to do anything, unless it's explicitly against the rules.
And let's see how that comes into play. Here's a colleague of mine's role: Web Architect - this is my colleague Olivier who fills this role - and his role has what holacracy calls a domain - in this case our website - a domain means property. So this is telling him that his website architect role controls the domain of website.
That means, to me, in my spokesperson role, I can do anything I want to express the purpose of my role, but I can't go mess with his property, the website. Alright? Great!
We need boundaries in organizations. We need order. When we throw out a management hierarchy, it's not just about throwing it out and going to chaos, it's about replacing it with a system that actually allows better emergent order.
And this is an example - so I know if I want to update the website to serve my spokesperson role, I need his permission; it's his property. And I know I can count on him for some things too. And he can count on me for some things.
We don't have any boss - subordinate relationship. We are two peers that are each leading our roles and following each other's roles. We each get to be a leader and a follower depending on what domain we're in, what we're talking about.
That's a very different way of running an organization. And the cool thing about these roles is this is not a static bureaucratic artifact. As I said, these exist in a dynamic flux - they're constantly changing.
And they exist in what we call a "circle" in holacracy. And a circle is the group of roles that all work together for some broader purpose. In this case, we have an "Outreach" circle.
Which is kind of our marketing circle. And that holds the roles of holacracy spokesperson and web architect and many others. And this circle has a governance process.
So about twice a month we gather as a circle. And everyone who's filling a role in that circle is invited to join us and to participate. And in this process we update these roles, we figure out, What do I need to count on for my colleagues?
And we make proposals, and we process those through a disciplined meeting structure that allows us at the end of the day to have more clarity on what do we need from each other, more transparency on how we work. And this is happening throughout the organization in every circle, not just one. There are many circles throughout our company.
And there are circles within circles. It's a very organic system. I like to think of this kind of like cells within organs within a body.
This is the same kind of structure that you have, right? as a human. Our bodies are full of autonomous units - every cell has autonomy.
Right? There's no boss cell that tells the other cells what to do. Every cell has a boundary, has autonomy, it controls itself.
And, it has to be a part of a broader system. It has some accountabilities to enact; it has to be a good citizen in its environment. And yet, broaden up one level, we have organs that are also autonomous entities.
They have their own functions, their own processes, and yet they exist within a broader system. This is nature's way of scaling. This is nature's way of dealing with complexity - lots of it - by distributing autonomy through every level of a system, like this.
And having governance, a function of actually dynamically constantly responding to our environment and learning and changing - distributed again throughout the whole system. Same thing here. The other interesting thing with holacracy - these circles are not entirely disconnected.
There's representatives of any broader circle within subcircles. So our general company circle, or GCC here, right? that circle has representatives in each of these subcircles you see, and vice versa.
Our outreach circle elects a representative to serve outreach - that circle's interests within the broader circle to organize all of the other circles. So there's kind of this connected, distributed system that looks very different than any management hierarchy I've ever seen. And in every layer there's autonomy, right down to the individual roles.
Very different way of running a company. The other really cool thing about this: Change is constant, and it's driven by what you are sensing in your role, getting work done. And you know anything sensed by anyone anywhere in the company has a place to go to get rapidly and reliably processed into meaningful change.
So, tensions drive everything - that sense that we have of the gap between where we are and where we could be. That's driving change in this. So .
. . If you want to learn more, please check out the website, holacracy.
org or my book coming out soon, "Holacracy. " Thank you for your time. Appreciate it.
