Rule of Law & Property Rights in Organizations

At first glance, the outputs of Holacracy’s governance process — role definitions — may look like little more than an improved job description. But once you understand what they truly mean, they become so much more — they form the keys to Holacracy’s distributed power system and the DNA of the organization’s design. Fortunately, there are a few simple rules you can use to remember their deeper meaning and unlock the staggering level of clarity encoded within.

Let’s dissect the meaning of role definitions in a Holacracy-powered company, and I invite you to look at HolacracyOne’s governance records as we go to see how this works in a real organization. You’ll note there are three basic components of a role definition: Purpose, Domain (previously called “Scope”), and Accountabilities. Purpose defines what potential this role exists to manifest; Accountabilities define what expectations others can hold of this role; and Domain defines the “property” of this role, which it can control and regulate as it sees fit, given its Purpose. Using these basic concepts, the simple rule to remember is this:

When you fill a role, you gain the authority to take any action you deem reasonably useful to express the role’s Purpose or energize one of its Accountabilities, as long as you don’t violate the Domain of another role.

Here’s a tangible example of how this plays out: As of this writing, HolacracyOne’s Content & Outreach circle holds a role affectionately named Social Media Butterfly, with a Purpose to “Pollinate the web with Holacracy”, and an accountability for “Creating or sourcing quick-to-consume content of interest to our market, and posting it to social media channels and open-contribution websites”.

Whomever fills that role can thus use their reasonable judgment to define what actions would best serve that Purpose or express that Accountability, and has the full authority to execute those actions — with no approvals required from anyone — unless they “exert control” within the Domain of another role.

So, for example, our Social Media Butterfly may freely decide to post comments on someone’s blog relevant to Holacracy, but they wouldn’t be able to, say, add our Facebook link onto the materials given out at our trainings. Those materials fall within the Domain of our Holacracy Education role, and thus the authority of Social Media Butterfly is constrained — they can only take that action if they first get the approval of Holacracy Education. And, on the flipside, others can take any actions they deem useful to express their own role’s Purpose and Accountabilities, but if they want to add something to our Facebook page, they would need approval of Social Media Butterfly, as that role holds a Domain of “HolacracyOne social media pages and accounts”.

In this way, you can think of a Domain as a “property right”, and that leads to another simple rule-of-thumb for practicing Holacracy: You are free to do whatever you wish with your own property (your role’s Domain), but don’t exert control on your neighbor’s property without their permission. We can extend this one step further to include circles as well: If a circle has been granted a Domain to control, and hasn’t further delegated that Domain to one of its roles, then it’s considered “communal property” of all roles within that circle — any one of them can exert control within that Domain. But, if you fill a role which is not in that circle, you’ll need permission first.

Putting this all together, the Holacracy Constitution brings two foundational elements of our broader human societies into our organizations: there’s rule of law through its defined governance process, and property rights through its distributed authority system. This enables an interconnected autonomy that should be familiar from our day-to-day societal life, yet there’s a key distinction here as well: While a Domain grants your role a property right, it does not grant you a property right. Your responsibility, should you choose to accept a role in a Holacracy-powered organization, is one of steward — you are controlling the role not for your own sake, but for its sake. Your job is to control its property and use its authority for the sake of its Purpose — which, in turn, serves its circle’s Purpose, which ultimately serves the whole organization’s Purpose. Like a parent raising a child, your charge as role-filler becomes a sacred duty, a stewarding of another’s path in the world — an act of love and of service, not for your own sake, but nonetheless of your own free will.