Holacracy is a model of organization and governance in which roles are defined around business needs rather than traditional positions. It aims to make companies more agile, adaptive, and efficient by decentralizing authority and decision-making. Holacracy can be represented in interlocking but independent circles, the widest circle being the global enterprise.
Traditionally, companies have relied on vertical management, where decision-making is centralized, pyramidal, and based on a well-defined hierarchy at the top of the pyramid. Executives make the major decisions, while subordinates carry them out. This model is widely accepted because it offers clarity in terms of responsibilities and authority, but it can also limit flexibility and innovation.
In contrast, horizontal management, or flat management, aims to flatten this hierarchy. In a horizontal system, employees are generally regarded as equals and have greater freedom to make decisions without having to go through various levels of validation. Flat management encourages open communication and collaboration between team members.
Holacracy, like sociocracy, aims to distribute decision-making power and is based on decision-making circles. These circles are interdependent and operate autonomously, yet are connected to each other. The major difference lies in the way decisions are made: in sociocracy, consent is the basic rule of the decision-making structure, meaning that all decisions must be made without major objections from collaborators.
Rather than relying on every title and role, a holacratic organization divides the company into clearly defined roles, each with a specific purpose and clearly defined responsibilities. People working for the company can take on multiple roles in their work, depending on their skills, the make-up of the team, and the needs of the organization. This model enables a dynamic division of labor and rapid adaptation to change.
Decision-making is also distributed. Autonomous teams make decisions in their own fields, which speeds up reactions to change.
Holacracy is an evolution of traditional management models, integrating the advantages of horizontal management and sociocracy, while offering a single framework for company decision-making and role distribution. By adopting this approach, companies seek to become more agile and innovative in markets that are constantly evolving, at an ever faster pace.
