Pitch

Problem? The CEO of Zappos.com, Tony Hsieh, has this downtown project in Las Vegas where he is trying to revitalize the city. And one of his recent interviews, he compares city productivity with business productivity. Saying research has shown that as cities grows and double in size, the productivity also doubles in size, the productivity per member of the city goes up. But when companies double in size, the productivity per worker actually goes down. It isn’t that surprising how employee productivity goes down with the ways organizations are structured today. As companies grow, they become more centralized, bunch of bureaucracy and management layers that come with that which restricts the employees. Yet, when you look at a city, there isn’t a central manager delegating things for everyone to do. Everyone uses their own best judgment to obtain their reach and goals, they work with each other and exchange with each other, under a basic justice system. With this freedom and boundaries it allows self-organization and figure out what makes the most sense. And we don’t really see this with modern organizational structures, but Holocracy will bring this to an organization. What is Holacracy? The root of the word "Holacracy" is holarchy. A holarchy is a hierarchy of increasing wholeness, where each layer is a whole autonomous entity in its own right, and yet part of a larger whole. Like a colony of ants. Or a better example, our human body is one great example of a holarchy. In our body we have cells, and each cell is autonomous. It's not just directed and controlled from the outside. It has its own governance process, a regulation process; it has its own boundary, and it's an autonomous entity. And yet it's also part of an organ. And our organs themselves are whole autonomous units with their own functions, and yet they're part of our whole system. Likewise in Holacracy, that's how we structure an organization. You end up with each individual role is autonomous. And yet it's also part of a team or what we call a circle. And that's kind of like the organ of the company. It's a whole autonomous entity. It governs itself, it operates, it's a self-regulating, autonomous entity with a boundary, and yet it's also a part of the larger company. And that hierarchy of increasing wholeness -- it's not a hierarchy of the people; it's a hierarchy of the organization's functions -- its roles, its functions, its circles and teams. Benefits? The transition to a more flat structure will benefit organizations as it will allow them to adapt quickly to changing business environments. Innovative, Valve. Holocratic models are increased in transparency and fewer conflicts in the organization. By removing job titles, this will prevent the clash between employees and managers (power struggle), which cause tension and inefficiencies in companies. Another benefit holacracy brings to companies is higher staff commitment. Engagement levels of workers will be higher as organizations distribute more responsibility and authority through the levels. This will in turn lead to increased productivity and competitiveness.