An introduction to Sociocracy 3 and Holacracy

What are the similarities and differences between Holacracy and Sociocracy 3.0 (S3)? Why do organizations choose these styles of self-organization as an alternative to the traditional management hierarchy? The professionals from Rebelwise and Energized.org have years of experience in the field of self-organization. Therefore both organizations did research to look for the similarities and differences between S3 and Holacracy. During a meetup we collected information and enriched the data with the insights of practitioners and experts.

Let’s take a look at Jack. Jack wants to organize his company, which now has 30 employees. The company grew really fast, and Jack is expecting to scale up even more. Currently everything is fine. Everyone does what he or she has to do and everyone enjoys the amount of freedom. Jack currently makes a lot of decisions and starts noticing that structure is lacking.
More and more often the situation in the workplace gets uncomfortable. Jack’s coworkers experience a lack of clarity about what is expected of them. Whenever a decision has to be made — even if the coffee machine is out of beans — everyone looks at Jack. New colleagues also find it difficult to deal with freedom and vagueness.

Why do organizations choose the path of self-organization?

• Involved employees
• Responsive and adaptive
• Antifragile (the organization learns from everything that it encounters)
• Scalable
• A complex world can’t be understood by a person alone; we need as much knowledge as possible to navigate in this complex world

How to shape self-organization: Choose from multiple possibilities.

Jack meets Tom at a conference. Tom recognizes himself in the story of Jack. He stood at the same crossroads a year ago. This situation is a crossroads, because there is a choice. You can opt for the traditional management hierarchy, or let it be and just see what happens, which is probably the creation of an unnamed, vague structure (creative chaos), or you opt for self-organization.

Tom advises Jack to look at Holacracy and Sociocracy 3.0 (S3). Both are great alternatives to a traditional management hierarchy.
As soon as he arrives back home, Jack starts searching Google. He finds it difficult to get a good understanding of S3 and Holacracy. To make it worse, S3 and Holacracy seem similar at first glance.

Similarities between S3 and Holacracy

After having done some research, Jack concludes that there are several similarities. It makes sense because the inventor of Holacracy was strongly inspired by Sociocracy and S3 is also based on sociocracy. Both S3 and Holacracy:

• are not really a system or method. Holacracy is being called a framework, and S3 a practical guide or bundling of ideas.
• allow you to start immediately.
• are an open-source operating system. They offer a dynamic structure, not a final reorganization. Changing the organization becomes an ongoing process.
• allow no room for power games. Instead there is disciplined work.
• work on the basis of tensions, so anyone who thinks that something could be better can act on that feeling.
• start from workability. The question, “Is it harmful or safe enough to try?” is being asked.
• have a process or meeting structure in which you can record changes to the organization.
• work with roles instead of functions (so an employee can fulfill a unique bouquet of roles).
• have roles that provide clarity about responsibilities and goals.
• have agility and transparency high on the agenda.
• move expectations from implicit to explicit.
• move from ‘nothing is allowed, except,’ to ‘anything is allowed, unless’.
• are result-oriented, goal-oriented (Holacracy purpose / S3 driver).
• use elements to build a structure, such as circles, roles, domains.
• separate governance from operational issues. S3 has Governance & Operations (practices from Agile). Holacracy has Governance meetings (structure of organization and roles) & Tactical meeting (operational).
• work on the basis of tensions, even though their interpretation is different.

Tools to shape the organization yourself

Jack is surprised by the amount of protocols and procedures he finds. In his experience, many rules on the work floor imply lack of freedom. He notices that he had expected a solution with virtually no rules involved. He decides to give Tom a call.

Tom explains that both S3 and Holacracy are tools to shape the organization. The protocols that you use are therefore liberating: they set the boundaries within which you have freedom. It is the same as with marks on the road. You need time to get familiar with the protocols. Just like you would have to get used to a manager. Although Tom also affirms that people are already more accustomed to this because they have been working this way for decades.

Yet you can also learn a new game. In the Netherlands, there are already very experienced coaches to guide you in your first steps. So even if it is new, you are not alone.

Tom challenges Jack to continue his investigation.

Differences between S3 and Holacracy

Take a moment to dive in and you will also see differences between Sociocracy 3.0 and Holacracy:

• A complete ruleset (Holacracy) versus rules that are modularly applicable (S3).
• An explicit start by signing the constitution (Holacracy) versus starting where the tension is (S3).
• Replaces management hierarchy (Holacracy) versus only changes what is needed (S3).
• The role and the person are separated from each other (Holacracy) versus you appear as a person (S3).
• The role has influence (influence lies with the role) (Holacracy) versus every person who is affected by a decision must be able to influence the decision (influence lies with the person) (S3).
• A facilitator is needed during meetings (Holacracy) versus the facilitator role can rotate during the meeting (S3).
• Integrative decision making (Holacracy) versus decision making based on consent (S3).
• A circle is a cluster of roles (Holacracy) versus a circle is a group of people (S3).

Because it is not so easy to juxtapose these frameworks, Jack decides to ask a few experts.

By talking to others, Jack discovers that S3 has a softer start. You can practice S3 by applying a few ‘patterns’. That appeals to Jack, since everyone in the company has to learn this. That way, they can move forward with very small steps.

With S3 you also only use what you find useful and you are free to adjust that if you think you can arrange it better. For example, if you want to delegate decision-making to roles in circles, you can apply that pattern. With S3 the starting point is that people have no objections. It is more about consent than agreement. In other words: decision-making based on consent.

Although a few names keep popping up as embodiments of the ideas of S3, nobody claims to have all rights over it.

With Holacracy, you can also start immediately. The framework is a bit more solid because everything is connected to everything else. So you’ll have to apply more new things when you start. Jack thinks that is a strong point in its favor. That means that if something does not go so smoothly, there is always another process to fall back on. He cannot find any weaknesses in the framework.

The creator of Holacracy — Brian Robertson — even recommends that the ‘powerholder’ of the organization sign the ‘constitution’, with all the rules of the game. That is a clear sign that the new rules apply to everybody. Moreover, one of the first steps is to define the new roles. Those are needed so the decision-making process can start as well. Immediately full speed ahead.

Jack thinks he could use some elements from Holacracy, such as the meeting structure.

Holacracy seems slightly tighter and occasionally even has a strict flavor. The focus seems to be more on the work that needs to be done. With S3 it’s more about collaboration and working together in every respect. The people in the organization emphatically have their own personal contribution to the work. Meanwhile, Holacracy makes an explicit distinction between person and role.

Jack finds it difficult to indicate exactly what the differences are. He notices a difference in style, but that is probably because there are so few sources to learn from.

Now that Jack is accustomed to the idea that everyone within the organization will have to learn something new, he decides to start participating in introductory workshops himself.

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Photo above: Energizers, photo at Springest (Holacracy).

This article was also published in Dutch here and in English here.