Holacracy

Holacracy

What is holacracy?

Holacracy is a system of organizational governance that replaces a traditional hierarchical command structure with self-managing teams and clearly defined roles. Instead of fixed job descriptions and top-down authority, work is distributed among autonomous, interdependent circles (teams). Individuals hold one or more roles with defined purposes, domains (areas of authority), and accountabilities, and they have the authority to make decisions within those boundaries.

Key principles

• Roles, not job titles: People fill multiple roles that define specific responsibilities and decision-making authority.
• Nested circles: The organization is organized into overlapping, autonomous teams called circles.
• Distributed authority: Role leads can act without seeking permission from a traditional management chain, provided they do not violate existing rules.
• Governance meetings: Circles hold periodic governance meetings to resolve tensions, update role definitions, and adapt processes.
• Rule-based autonomy: Individuals may take any action needed to fulfill their role unless a rule explicitly prohibits it.

How it works

Holacracy replaces a static hierarchy with a dynamic system of roles and circles. Each circle contains roles that contribute to the circle’s purpose; circles can contain subcircles, creating a nested structure. People may play different roles across multiple circles, so someone can lead in one context and be subordinate in another.

Governance meetings are the mechanism for evolving the structure and resolving conflicts. In these meetings, members propose changes to roles, accountabilities, and policies. Operational meetings focus on day-to-day coordination and tactical work. The Holacracy Constitution (a formal set of rules) guides these processes and defines how authority and governance are exercised.

Origins

The term holarchy was coined by Arthur Koestler to describe systems of semi-autonomous units called holons. The modern practice of holacracy was developed by Brian Robertson in the early 2000s while running a software company. Robertson and Tom Thomison later founded HolacracyOne and published the Holacracy Constitution to codify the model.

Examples

Some organizations have adopted holacracy or elements of it. Zappos is the most cited large example, having implemented holacracy across its workforce (about 1,500 employees at the time of adoption). HolacracyOne lists many smaller organizations and agencies that use holacracy principles, including Liip (a Swiss digital agency), Springest (a Dutch learning platform), and Mercedes‑benz.io (the online arm of Mercedes‑Benz).

Benefits

• Faster, decentralized decision-making within role domains.
• Greater role clarity and explicit accountabilities.
• Increased employee autonomy and ownership.
• Designed for adaptability and continuous evolution of structure.

Criticisms and risks

• Can be difficult to implement and sustain at scale without strong commitment and training.
• Some employees find the model confusing or uncomfortable, leading to turnover during transitions.
• Several organizations have scaled back or abandoned holacracy after finding it impeded work or did not fit their culture (for example, some tech firms experimented and later returned to different models).
• Critics argue it can be overhyped and may not deliver benefits for every organization.

Is holacracy right for your organization?

Holacracy can work well for organizations that prioritize agility, distributed decision-making, and rapid adaptation. It requires investment in training, disciplined governance practices, and cultural alignment around transparency and accountability. Organizations that need tight centralized control, very clear hierarchical authority, or that lack commitment to continual governance refinement may find it a poor fit.

Conclusion

Holacracy offers an alternative to traditional hierarchies by distributing authority through defined roles and governance processes. When implemented thoughtfully, it can increase responsiveness and employee empowerment; however, it demands significant cultural and procedural change and does not suit every organization.