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What is Holacracy?
Holacracy is a decentralized organizational governance system that replaces traditional management hierarchies with self-organizing teams, clear roles, and distributed authority. Decision-making is embedded into defined processes rather than concentrated in managers.
Definition
Holacracy is a management and governance framework in which authority is distributed across roles and teams instead of being held by a traditional top-down hierarchy.
Key Takeaways
- Eliminates conventional job titles and managerial hierarchies.
- Authority is assigned to roles, not individuals.
- Emphasizes transparency, accountability, and adaptability.
Understanding Holacracy
In a holacratic organization, work is structured around roles that have explicit responsibilities and decision rights. Individuals may hold multiple roles across different teams, called “circles.” Each circle governs itself within a defined scope.
Governance meetings are used to update roles, policies, and accountabilities, while tactical meetings focus on execution. This structure allows organizations to adapt quickly to change without waiting for top-down approval.
Holacracy aims to reduce bureaucracy, increase employee autonomy, and improve organizational responsiveness. However, it requires high discipline and clarity to function effectively.
Real-World Example
Zappos famously adopted holacracy to replace its traditional management structure, giving employees defined roles and decision-making authority while removing job titles.
Importance in Business or Economics
Holacracy matters because it:
- Supports agile and adaptive organizations
- Encourages employee empowerment and ownership
- Reduces bottlenecks in decision-making
- Aligns structure with fast-changing environments
Types or Variations
- Full Holacracy — Organization-wide adoption
- Hybrid Holacracy — Holacratic governance within select teams
- Self-Management Systems — Broader category including holacracy
Related Terms
- Flat Organization
- Self-Management
- Agile Organization
Sources and Further Reading
Quick Reference
- Decentralized governance model
- Role-based authority
- High adaptability, high discipline
Frequently Asked Questions (FAQs)
Is holacracy suitable for all organizations?
No, it works best in organizations that value autonomy and transparency.
Does holacracy eliminate managers?
It removes traditional managerial authority but still requires leadership roles.
Why do some companies abandon holacracy?
Because of complexity, cultural resistance, or lack of clarity.
