miquel6I’ve been having an interesting exchange with Olivier Compagne, one of the partners at Holacracy One. I wrote a post last week on the subject which was flippant to say the least and Olivier has been good enough to attempt to set me straight on Holacracy. Instead of just lambasting the concept, I thought I would attempt to examine it critically.

Let’s look first at what Holacracy claims to be:

  • There are no titles and no managers.
  • Teams are organized around the work, not the people.
  • Employees fill many roles in many teams simultaneously.
  • Governance meetings structure how the work gets done.

I found this structure quite familiar as from 1979 to 1982 I worked in what is probably quite close to a Holacracy. I was at Thorne Riddell (KPMG) as a Chartered Accountant. We had no titles on business cards and work was organized around audits on which you may be on a number at a time. Your role in each audit depended on the nature and complexity of the audit so you may have had different roles to play at any one time.

This may be a great structure for a project based organization like KPMG but I’m not sure that the same could be said of a non-project based organization such as Zappos. Even though it may work in project based organizations, there were a number of problems with this structure, even at KPMG:

  • Working on multiple projects simultaneously meant a fight for resources and at times individuals could be pulled too many ways and end up working ridiculous hours.
  • Each project had different expectations and each team had a different culture so what worked with one project may not have not work with another.
  • There was no relationship with a “Coach” who could give guidance on career development as we had no one boss.
  • Getting feedback on performance in a formal way was project based and didn’t translate to career performance discussions as no one could see the whole picture of your performance.

Strategy execution is one of the biggest problems in business today. In order to implement strategy in an effective manner, each employee must know:

  • Exactly what is expected.
  • How they are doing.
  • How they can improve.
  • How they have done.

The problem with Holacracy as I see it is that it just isn’t that easy to execute effectively with such a convoluted non-structure.

  • If people work on multiple projects simultaneously without one central boss, it will be very complex to set clear objectives and direction
  • Without that one decision maker, the resolution of resource and performance conflicts will be very difficult.
  • Individual coaching by someone who knows your work intimately is also very complex.
  • Finally, finding out how you’ve done when you’ve worked on multiple teams would be complex and confusing.

Growing revenue and making profits is hard enough as it is, without Holacracy. While I don’t support Bureaucracy, I don’t think Holacracy adds to our ability to execute strategy effectively and for that reason, I’m out.