The CEO's Challenge In Adopting Holacracy

December 17, 2013 - 11:20pm

I work with many CEOs who’ve chosen to bring Holacracy into their organization, and they often face a real challenge: conventionally, the CEO holds the vision and helps orchestrate the whole organization around it. Yet with Holacracy, the process itself does a lot of that. There is still a need for what the CEO is doing as a spokesperson and champion of that vision, but Holacracy changes how CEOs fundamentally influence others in order to have them align around that vision.

The real challenge is to differentiate how they champion the vision from how they exert authority and attempt to align others. There’s a need to figure out how to still do what they do, without exerting power and influence the way they’re used to.

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More Than A Challenge: A Leverage Point

CEOs are often the ones with the most power to unknowingly undermine what they’re intending to do by bringing in Holacracy. The risk is for them to collapse back to the conventional way they’ve held power and influenced others — even with the best of intentions, while genuinely trying to help align others with the vision.

To avoid that, CEOs can learn new approaches and use alternate pathways to influence others while still holding their critical function of championing the vision. It’s a fascinating journey. There are definitely many ways it can go wrong, which can end up causing inadvertent harm.

The good news is that usually CEOs interested in bringing Holacracy to their company in the first place are up for this challenge. One of my favorite parts of my job is helping CEOs find new ways to show up in their organization, and do what they do best without falling back to previous conventional habits. Instead, they learn new habits that are more effective and powerful with Holacracy at play. They can still be a spokesperson for the organization’s broader vision, and that function often ends up in just another role.

Ultimately, you don’t need a CEO. You need a bunch of different roles, and the (former) CEO fills many of them. They’re now part of the team, influencing the organization through Holacracy, which is a pretty cool transformation to follow.

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Submitted by Michael M. Chayes (not verified) on January 3, 2014 - 4:28pm. #


I think Holacracy represents the most substantial response to a current system and culture of business that unintentionally destroys as much value as it creates by putting severe limits on the level and kind of individual contribution it allows for.  However, I think there is a further conceptual step that Holacracy has to take to more completely grasp current reality.

You appreciate the paradox of even well-intentioned CEOs failing to recognize the essentially disempowering nature of a system that gives them the capacity to "empower" or "disempower" others. You've proposed that in place of the empowering leader, Holacracy invests the system itself with the "power of empowerment". What I think is missing is an appreciation that the CEO--whatever personal choices she would like to make regarding her role in her organization-- is also part of a larger system that defines her role and degrees of freedom. While enjoying more autonomy than those at lower levels, it's still circumscibed by our existing business culture.  Implementing a holacractic approach represents one system replacing another, not just replacing CEO power. As such, implementation is a considerable hurtle because it requires a CEO to free herself of a system that exerts a lot of formal and informal pressure for compliance. 

Michael M. Chayes

Submitted by Brian Robertson on January 3, 2014 - 4:47pm. #

Thanks for the comment Michael, that reallly resonates with me and I've seen that challenge show up in many ways, and felt it myself in my own journey as a "recovering CEO"...  Definitely an area for further exploration.


- Brian

Submitted by Krishnan K S (not verified) on January 5, 2014 - 8:26am. #

I believe biggest challenge in adopting to a Holocracy based organization is change in mind sets and deeply ingrained habits and processes of organization.   In my opinion biggest advantage would be empowering and unleashing the human potential with focus on outcomes. 

The emphasis would be on collaboration and sharing both rewards and risks in an inclusive manner - Shift from individual heroism to group achievements.


Submitted by Olivier Compagne on January 6, 2014 - 1:12am. #

That's true Krishna, that's why it's really useful to get external help. That said, Holacracy is embedded explicitly and transparently in the Holacracy Constitution, so when we work with a new client, the first step is to have the current power holder (usually the CEO) sign an agreement to abid by the rules of the Holacracy Constitution (the CEO included!). That's both a powerful symbolic step and a clear signal to everyone in the company that things have changed. The rest comes with practice, practice, practice...

Submitted by David Slade (not verified) on January 10, 2014 - 8:03am. #

I wonder how levels of individual and group development come into play.  Are you seeing any Boomeritis?

I feel Holacracy is an integral 2nd tier business system technology developed by an evolved integral thinker, a technology developed in relationship with the group.  It is a new tool isnt it?  could any level of development use it?  could you have a Holacracy who has a center gravity at red (spiral dynamics, power gods egocentric level)?  you would never have a holacracy with a red leader tho, they would never succeed power.  hmmm.  These multi level differences must be a source of tension.  A tension both up and down I see... Interesting.  I imagine generally that most leaders are further along developmentally or on par with the group.

In terms of power structure, it is always fun to hear the hierarchy talk, it is clear to me that anti-hierarchy is a green (post-modern, pluralistic) pathology and that heirarchy coming back in is an important step to integral.  Hierarchy to help not to hurt.  Isnt hierarchy the natural state of things?  I wonder, is Holacracy a growth hierarchy?  with the group purpose holding the highest power.


I have been trained that it is always both and, both the i and we and the insides and the outsides. 

Submitted by Anthony Rhinelander (not verified) on February 4, 2014 - 11:18am. #

Fascinating concepts.  Speaking as someone retired after almost forty years of university teaching yet still interested in university governance (and mis-governance!), I would like to know if any of you management gurus have had any experience with introducing the ideas and ideals of holacracy into university governance anywhere?

It seems to me that universities today, though often treated as "businesses" with "CEOs", are really quite unique enterprises.  University "managers" (Presidents, VPs, deans, with their associates and assistants and directors of all sorts), while tending to see their administration as an end it itself, in fact if they are "successful" they are really only smoothing the way for professors to do the actual "work" of the university:  carrying on research and teaching students.  The administrators actually have little control over the nature or quality of the research, or the nature or quality of the teaching.  In that sense the professors are their own "bosses".  

So, seen from afar, the university structure (at least of brick-and-mortar universities) is already half-way toward a holacratic structure -- but only half way.  The administrators increasingly see themselves as essential to achieving the university's "mission" (however defined), and the faculty often as an obstruction to that end.  Such an attitude can and often does lead to extreme resentment on the part of professors, who see the administrators' activity and demands as unnecessary interference, wasteful of resources and signifying lack of trust.

Faculty unionization commonly leads the whole community in the wrong direction, towards mundane (i.e., money) matters and "working conditions" -- strikes by academics, although counter-intuitive, happen (as they have recently at a couple of nearby Canadian universities, mine and others) and can severely poison the atmosphere for a long time to come.  There has to be a better way.

To repeat my question: have any of you had any experience introducing holacracy to universities anywhere?  I should love to introduce my colleagues, both administrators and professors, to the idea.

Looking forward to your response(s).

Submitted by Olivier Compagne on February 4, 2014 - 3:34pm. #

Hi Anthony, thank you for taking the time to post your question and reaction. As far as we know, there is no university attempting to adopt Holacracy, and we don't have any particular experience in this area. At HolacracyOne we have received several questions from people like you in academia who are curious and interested in Holacracy for their universities, but none has taken the step as far as I know.

I can imagine the context of a university being quite unique compared to other industries, but off the top of my mind I don't see any reason why adopting Holacracy in that context would be more challenging than anywhere else. A university has a purpose, people working to express that purpose, and customers. That's all Holacracy needs. I'm sure there would be implementation challenges, as there always are, but unless legal regulations directly interfere with the mechanisms of Holacracy (and that's probably one of the first things to figure out), I don't see any fundamental obstacles to using Holacracy in a university. I for one would love to see this experiment take life :-)

Submitted by Sandy Piderit (not verified) on February 14, 2014 - 1:03pm. #

I am intrigued by Anthony's comment. As an untenured assistant professor from 1998-2006, untenured associate professor from 2006-2008, and then an itinerant lecturer since then, I am convinced that I am "my own boss" in the sense that when I begin a new semester or quarter, my role is not to serve as a sage on the stage, but as a guide on the side. 

I have just begin teaching a "new" course -- MGMT 3502 -- Building and Leading Teams & Organizations. I want my MBA and other graduate students to understand the hierarchies and complex structures where many are working now, while also conveying the hope and challenge to them to make their workplaces great -- however they define that. Even though historically, the field of organization theory began with the study of structure, and then moved on to the study of culture, politics, and organizational development and change... I believe that organizations are cultures first, enacted by the people who show up. 

I am considering beginning the second quarter of the course by introducing myself, and the Holocracy Constitution. I would invite students to try it out with me, develop our operating procedures and roles together in about 2 weeks, and then enact holocracy for the following 10 weeks.

What do you think? What questions should I be pushing myself to answer in the next month, so that I can give students a draft of operating procedures on the first day of class instead of a traditional syllabus? Any thinking partners out there who might be willing to talk on the phone? 

Submitted by Olivier Compagne on February 25, 2014 - 10:36pm. #

That's a very intriguing experiment Sandy! I for one would love to know how it goes. The one caveat I might add is that Holacracy is specifically designed for organizations, nothing else — see this short video: What is an Organization? —so I would be very clear on what I'm trying to organize exactly. And you determine that there is indeed an organization, what is its purpose. Answering those questions in advance should help a lot in your experiment. 

If you actually want to try to use Holacracy meeting processes, I have to warn you that it would be difficult without training, or at least without having witnessed such meetings. Make sure to watch the simulation of Governance Meeting — even though it's a bit old now, it's still a useful resource.

Not my intention to dampen your spirits with all these 'disclaimers' :-) but rather to help you better prepare for the possible challenges. I hope you give it a try and that your students get to experience something new. Thanks for your work!

Submitted by Kevin Leininger (not verified) on March 10, 2014 - 7:28pm. #

Interesting.  I was referred to you by John Voris.  I must admit I have never heard of this.  It is very interesting. 

I am a serial entrepreneur (not recovering) with lots of startup and turnaround experience under my belt.  I can tell you from personal experience that alignment and execution of plans, actions and outcomes is crucial for a startup to succeed. 

I recently read a book written by Stephen Bungay entitled "The Art of Action" that is very interesting.  This alignment challenge has been around for a long time indeed.  Take a look at that book for some interesting insight.  

I will take some time and study what you are up to as the old Taylor and Sloane ways of thinking are over.  

Good stuff...

Submitted by Olivier Compagne on March 12, 2014 - 9:07pm. #

Thanks for the kind words Kevin. Definitely agree with your insight about alignment; I think you'll find that Holacracy approaches it heads on. Let us know if you have any questions or need anything. 

Submitted by Paul Codd (not verified) on May 13, 2014 - 4:00pm. #

My interest in Holacarcy is multi-faceted. As a former entrepreneur, organisational development consultant and university lecturer in change management I resonate with many of the comments here. But my interest today is in meta-governance. I am trying to conceptually imagine how holacracy might apply to the governance of a nation state and it is not too difficult to project how that might work from a structural POV. Governance would need completely reworked to cope with vast numbers and ideologically opposing views. However I believe that many of the governance problems we are facing in our current conception of the democractic nation state stem from the fact that the governance systems themselves (ie. voting systems, election terms and systems etc) need to be evolved by the actors and stakeholders in the system (ie. citizens) however the levers of control are extremely opaque. Similarly in Holacracy the systems for evolving the operating system itself (eg. the decision taken by an organisation to "upgrade" to a new version of the Holacracy constitution, or to make some other customisation of it) are not transparent. In the case of the currently inadequate, brittle, and insufficient democratic systems of the nation state, it may be enough to create a sense, propose, act, iterative change system to evolve the democratic governance system itself. Thus the final destination would not need pre-planned or defined but could evolve and react over time. I'm aware that this area, my current interest, may be too far out of scope for any considered opinions from the Holacracy team, but I am extremely interested in whether a similar meta-Holacratic system has been considered for mature Holacratic orgs such as H1, and if so what might this involve. I realise there is a lot of stuff at play here and I'm not considering the whole picture. But I hope also that there is the germ of something important here and I offer it for your comments and criticism with the intention that you and others can take the ideas further.

Submitted by Chris Cowan on May 19, 2014 - 10:01am. #

Thanks for your thoughtful comment Paul. You raise a very very important question, which I'll rephrase in my own words as... "what governance system is used to ratify a governance system?" I think it's important to understand the meta-goverance at play whenever we are talking about changing a system of governance as we do when we talk about an organization "adopting Holacracy." In that case, we are dealing with the traditional power holders (CEOs, company owners, etc.) who then make the decision to hand over their traditional power into the Holacracy Constitution. In that case, the meta-governance is still the traditional power system unless the organization legally adopts Holacracy into its Articles of Incorporation (as we have at H1). To your point about the governance of a nation state...unless the nation state has a explicit meta-governance process for evolving its operational governance (none that I know of ever have), then we default back to evolution through natural selection (revolution, occupation, exploration, etc). However, it seems possible to me, at least conceptually, that given a mismatch between the meta governance and the operational governance (a distinction I'm making up for the purposes of this conversation) that it's possible for the lower-level operational governance to ulimately influence changes to the upper-level meta governance. Again, when it comes to Holacracy, the Constitution is always evolving and the process of its evolution is also evolving (i.e. it will likely become less centralized as time goes on).