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The Power of Governance

June 10, 2011 - 9:21pm

Typically, power and authority in an organization formally rest with the guy at the top – the CEO, managing director, or whatever label is used. Theoretically power is delegated from there, however this process is often extremely fuzzy. More often, most people in the organization have little clarity about who has what authority to make which decisions, at least for many topics. And when decision-making authority is unclear, we see behaviors that make sense given that context but waste time and energy: steam-rollering over others, painfully-slow consensus-seeking, playing politics, etc. – there’s no good answer.

When people are first exposed to the Holacracy system, they’re often wowed by its smooth, efficient, transpersonal meetings, and sometimes think of the method as “really cool meeting processes”.  Holacracy meetings may be quite remarkable, however this conception of the method misses the bulk of its shift:  the transformation to a new power structure, which clarifies and distributes authority throughout the organization, by regularly processing tensions sensed by all within.  Once we have that, the frustrating responses to lack of clear authority can give way to generating and harnessing organizational clarity.

This is what Holacracy Governance Meetings are all about – they are not just nice ways to run a meeting.  They have tangible rules with clear outputs that distribute authority throughout a company.  Said another way, no longer does the power to define who has what authority rest with the guy at the top; the seat of power has shifted from the leader, to a defined governance process.  Its outputs rule supreme.  Like a constitutionally-empowered congress defining laws not even a president can trump, so too does the Holacracy Constitution define the seat of authority for the organization as resting in a legislative process, not an autocratic ruler.

This leads to a shift both powerful and challenging for all involved.  One of the more interesting parts of my job when I work with an organization is to oft-remind the CEO who adopted Holacracy that “you no longer have the authority to make that decision”.  And, on the flip side, to remind others that “the governance process has granted you the accountability and authority to make that decision; it’s yours to own, and it’s not the boss’s job to tell you what to do”.  As one boss recently said in response, “Thank God – now I can stop making all the decisions around here!”

I offer these reminders continuously to drive home the point: using the Holacracy system isn’t just about meeting differently, it’s about distributing real authority through a governance process that now holds the core power to define authority in the organization.  Of course, someone still has the authority to replace folks if they’re not using their authority wisely – but short of that, the authority granted in governance is not to be overruled by an over-involved boss.

Once this shift is fully embodied, I’ve noticed an interesting result:  it liberates those within the organization to be both more autocratic and simultaneously more collaborative.  With authority clear and distributed, no one has to tiptoe around an issue and build buy-in, which liberates autocratic action with confidence, knowing that an integrative legislative process has granted such authority.  And at the time same, someone with clear autocratic authority is freed to ask for help, input, and dialog, and others are free to give it and pitch their opinions – without any risk of the process devolving to a consensus-deadlock or an autocratic decree from a conventional leader.  As soon as the authority-holder gets enough input to confidently make a decision, they can comfortably cut off the dialog, thank those involved, and make their decision.


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Comments

Submitted by Maya (not verified) on July 22, 2011 - 8:43pm. #

Dear Brian,

 

What a coincidence! In June our company held a leadership training for around 40 Asia-Pacific managers attended. The purpose of the meeting was to empower the Asian leaders so that they show more ownership and leadership on company's business.

There many people shared uncomfortability toward decision manking in our organization; they said that they did not know who decided what or who decided up to where. This sense has made them get lost in organization. Then, our CEO shared his expectation on how our organization to be; which is exactly what you wrote in the article.

Our CEO's idea did not seem to be digested by the participants well because Asian people's expectation toward organization  and manager's role is very much different from your notion.

 

I started thinking how Holacracy approach and practice can be rooted in Asia Pacific where human relationship is still based on adult-child - vertical - relationship because I believe that Holacracy can become effective in a flat organization or community.

 

Thank you for giving me a great opportunity to think about future organization and way of making human relationship.

Best regards

Submitted by Brian Robertson on July 23, 2011 - 1:06pm. #

Thanks for commenting Maya!  I know of a few people doing something with Holacracy in the Asia / Pacific region and grappling with similar challenges (though from what I've seen there are challenges in any culture, just different ones in each).

I think most (maybe all) modern cultures today are rooted in the parent/child relationship archetype in organizations, so that part at least is nothing surprising or unique to the Asian region; the culture there may present unique challenges in addressing it, though I do think shifting beyond that is a major strength of Holacracy.  In fact, I think in many ways that's easier than adopting Holacracy in a largely flat community-oriented organization, which from my experience often struggle the most with the shifts Holacracy installs.  Probably a good topic for a future blog post...

Thanks again,

- Brian

Submitted by Diederick (not verified) on July 25, 2011 - 5:31am. #

Another great post Brian, thanks for this!

I know a lot of managers struggle with the fear of losing control, in response to this new power structure. I have a feeling you may have some pretty clear thoughts on this, as I'm sure you get asked these questions by some of the leaders you work with. Could you comment on how this new power structure relates to managerial control (or the illusion of it ;-)

Looking forward to read your thoughts,

Diederick

Submitted by Brian Robertson on July 27, 2011 - 2:50pm. #

Hi Diederick,

Indeed they do!  And yet, the irony is, the conventional predict-and-control paradigm often gives more illusion of control than real control, and Holacracy's "dynamic steering" paradigm is all about getting more real control by ruthlessly facing reality constantly and continually responding to whatever comes up.  That does take releasing an addiction to the illusion that we can control more than we really can - which can be quite difficult.  It's a very comforting self-delusion...

There's also identity issues the shift can bring up, especially if we've wrapped part of our sense of self - our identity - around being a good heroic leader.  It's very easy to form attachments to that identity, and derive some of our sense of self-worth from that illusion that we control and lead more than we actually do - that we are the heroic leader holding it all together.  There’s so much opportunity for attachment there, and it's very easy to get caught up in it, to swallow our own BS, the story we tell ourselves about how important we are.  And it's even easier when we live in systems that reinforce this self-image.  And individual development alone doesn't change that; with more capacity comes more ability to hide attachments even from ourselves...

We've spoken about this in a few of our Community of Practice dialogs which you might find interesting; specifically:  Letting Go of Heroic Leadership (transcript here), Navigating Power & Control Issues, and Leadership in a Self-Organizing System.

Regards,

- Brian

Submitted by Santosh (not verified) on November 7, 2012 - 11:09am. #

Hi Brian,

One method/model of distributed leadership and decisions making power I have used in a recent Change intervention is by creatig a Managing Committee where the CEO and Department Heads are not present. The middle managers ( who in my experience ''play safe'' by transmitting communications to Supervisors and dump responsbility and accountability on them ) are involved in discussing challenges and arriving at solutions across functions irrespective of whether a function was involved or not.

The minutes of the meeting of Issues, Tasks and Decisions are circulated to all who attended and copy to Department Heads and CEO. Where delegations do not permit Decisions are marked in in Red and CEO/ Department Heads have to approve.

The approach brought in:

1. Time release for Department Heads and CEO to focus on innvovation, new JVs etc

2. Brought in ownership on Middle Managers who earlier communicated ( complained ) that down line Supervisors were responsible.

3. Also allowed internal leadership traits to emerge which allowed business continuity and possibilities of promoting employees from within rather than recruit from outside  causing existing managers to feel deprived.

Not sure if this can fall within the Holacracy model.

Woudl love to hear your thoughts.

Cheers!!!

Santosh

 

Submitted by Olivier Compagne on November 9, 2012 - 11:20am. #

Hi Santosh, welcome here and thanks for inquiring. Some of your initiatives generally go in a direction similar to Holacracy's principles -- I think of delegating responsibility and developing leadership, for example. And if they had positive results, that's great! 

The key difference with Holacracy is in the distribution of authority. Holacracy is fundamentally a distributed authority system -- it is not that the CEO "distributes her authority", rather it is that there is no CEO with authority to distribute in the first place. This system is possible without falling into painful consensus seeking because of a clear definition of the roles within the organization: you know what role is in charge of what, and each person in their role have full authority to make decisions under their scope. If you haven't seen it yet, I recommend this Holacracy Introduction video, it gives you a good overview of the basics. Hope this helps!

Submitted by John Reece (not verified) on March 6, 2014 - 4:02pm. #

Who gets  the credit when something goes well?

Who is held accountable if something goes awry?

 

Sounds like a recipe for disaster to me.

Submitted by Chris Cowan (not verified) on March 6, 2014 - 5:28pm. #

I agree John. If there is no individual accountability, then it would be recipe for disaster. Having said that I've never read or experienced anything about Holacracy that would suggest that there is no individual accountability. In fact, I would say the complete opposite...there are clear accountabilities (and they are actually called, "accountabilities") that each role has. With that said, maybe you are asking about how a specific Holacractic organization might handle performance management or compensation. If so, then THAT is a good question. :) If you're curious, then I would just offer up that Holacracy, as an "operating system," doesn't proclaim a "standard" way to handle those things (nor does is automatically give you a way to handle hiring, training, operations, sales, or any other specific function). Those elements are typically done case-by-case (there are lots of successful examples) or through the development of a specific organizational "app" which works in junction with Holacracy. Again it is much like the relationship between a computer's operating system and the software installed on that computer. Does that make sense?  

Submitted by Olivier Compagne on March 6, 2014 - 6:02pm. #

Hi John, 

Ditto on what Chris said about "accountability". To expand a bit further on this point, I'd say who gets credit and who is accountable would depend on what that "something" going well or bad is. If it is something that clearly falls under the authority of a specific role — then the person filling this role gets the credit when things go well, and is accountable when they go awry. However, there are mechanisms to bring visibility to a situation before it goes awry, so that other members of the team can see it and suggest making changes (or ultimately, replacing the person filling the role if s/he makes bad decisions). 

If the "something" in question doesn't clearly fall under the authority of a specific role, then by default the Lead Link of the circle is accountable for it — the Lead Link is accountable for any function that's not captured in a role of the circle via governance. And if it's true that a function is needed and it's not defined in governance, that's a good 'tension' for the Lead Link (or another role) to process by proposing creating a role to hold that function for the circle.

It's the "short" answer — you'll get more on how the mechanics work in a training, but hopefully that helps clarify how it works overall.

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