Management strategies

Michael Sudahl,

Holacracy - how to abolish hierarchies

Hierarchical forms of management are out. More and more companies are testing self-organized methods, such as Europace AG. Co-CEO Stefan Kennerknecht sees the online marketplace for mortgage and instalment loans as a knowledge company predestined to relinquish responsibility and power and introduce self-organization, supported by the "framework" of holacracy.

Hierarchical forms of management are out. More and more companies are testing self-organized methods such as holacracy. What is behind it and what benefits does it bring © CC0 public domain

In many production companies, technical innovation has long been part of day-to-day business. Development cycles are shortening and software development is becoming increasingly important. As the proportion of knowledge management increases, hierarchies and coordination loops become disruptive. But how does a company of 160 people function when there are no longer job descriptions and departments, but instead roles, circles, responsibilities and an overarching purpose? "Like an organism," explains Kennerknecht. Holocrats see themselves as part of the whole. Every employee takes on different roles and contributes their skills in circles (meetings).

An example of a role looks like this:

  • Role: Development
  • Task/purpose: Driving forward product innovations
  • Responsibility (expectation of others): Introduce a new feature every six months.
  • Authority (responsibility): "Customer requests must be passed on to the Development role"
Advertisement

Because Europace had an existing organizational form, a path for the transformation was sought after a kick-off. The circles had to learn to take on classic management tasks, because: Managers were abolished and the responsibility they held was transferred to the circles. Individual departments and teams experimented with roles and meetings, of which there are two. Both are characterized by a predefined structure and clear moderation:

  • Tacticals: take place once or twice a week in the circles. Similar to a scrum meeting, the project status and the next steps are discussed. If necessary, it is clarified what input a role owner needs from the circle in order to make progress. Only matters directly related to the circle are discussed.
  • Governance: These meetings take place every one to three months. The purpose and objectives of the roles and the circle are scrutinized.

Add to this:

  • Focus meetings: These are operational meetings on specific topics, as they are held in every company. They deal with aspects that do not fit into the tactical and governance meetings, but are more related to work organization. Only those roles come together that have to do with the topic or can contribute a solution through their expertise.

The big challenge in this change management process is to get people on board. Holacracy makes a strict distinction between role and person, but not everyone can just let go of their role. Identification is often high. Critics see this as an inhumane part of holocratic systems. Behind the roles are biographies and destinies. It is human to define yourself by your task, your role. "That's right," says Stefan Kennerknecht. That is why it is important to create spaces for these needs. "Clean the air" is the name of the game in the Berlin offices. After every holocratic meeting, there is an opportunity to clear the air emotionally. The biggest exercise here is to stay with yourself. To speak from a first-person perspective. Taking responsibility for your actions and feelings. Reflecting on what has been said and heard without taking it personally. "The tools are important," says Kennerknecht. And means having communication processes at hand that don't sweep over people and their dignity, but give room for needs and wishes.

So the tone is changing. In her role as Head of Marketing at Europace, Holocrat Heike Schmidt asks her colleagues: "What do you need to fulfill your role?" Instead of telling employees what they have to do, she lets them decide for themselves. "That's motivating," observes Schmidt, noting that meetings become more productive because work is based on tension and transparency is created instead of "shouting loudly". Everyone has the opportunity to raise an objection and there are clear rules for review, which leads to transparency. On the other hand, no objection to a proposal means that something is good enough to try out. "Holacracy provides ways of thinking and approaches that are very different from those I have encountered in other organizations," concludes Schmidt.

Self-managed in five steps:

1) Pro Holacracy: The management must decide on a Holacracy test run, appoint a Holacracy manager and give him or her authority to act. This person should have experience with process and change management. At the same time, he or she moderates meetings and is the central point of contact.

2) Clarify consequences: The Holacracy manager should read the 45-page Holacracy constitution and give a presentation to the management explaining the consequences of self-management. Important for managers to know: In certain situations, they relinquish authority and deliberately delegate responsibility.

3) Kick-off: In the workshop, the Holacracy driver explains the model and method to a first-mover team. Each team member then writes down their roles and responsibilities. Everyone is guided by the actual situation. The time budget is around half a day.

4) Expansion and maintenance: At the first governance meeting, the purpose of a circle should be defined and the roles worked out and supplemented. To get started, it is advisable to hold these meetings every 14 days. The aim is to establish the circle and make it operational. This process may take some time. However, two to three working days per team member should be enough time, spread over two to three months. During this time, the roles change, some dissolve and others are added. Over time, a lively organization grows.

5) Stop regression: The start has been made, the holocracy has been installed. However, there may be relapses: the old bosses give instructions or reject decisions. Conversely, the employees now in charge must understand that rights also include duties. They must learn to take responsibility and set an example. The holocracy driver has the task of taking countermeasures. They must recognize and address regressions and clarify them with the responsible roles.

How holacracy works
Holacracy does not really abolish hierarchies; in fact, they continue to exist as an organizing principle in the so-called purpose hierarchy, but power is completely delegated. Employees take responsibility and organize themselves. Brian Robertson is considered a pioneer of holacracy. In holacracy, employees take on roles that are grouped together in circles. For example, there may be a production circle in which colleagues are responsible for development, personnel planning, procurement and warehousing. The circles organize themselves and define responsibilities, although these must always be coordinated with the higher-level circle. It is common for employees to take on several rolesand belong to different circles. In addition, each employee can change roles or change roles. There are double connections so that the circles can communicate. One representative from each circle is sent to the next higher circle and forms a counterweight to the lead of a circle. Holocrats differentiate between operational meetings, which regulate day-to-day operations, and steering meetings. These are used to further develop structures: This is where responsibilities are distributed and circles are merged and divided. Holacracy does not make the boss superfluous - he is only consulted on critical issues. This is intended to create the freedom to develop new ideas more quickly and efficiently.

Michael Sudahl is a freelance journalist.

  • Xing Icon
  • LinkedIn Icon
Advertisement
Advertisement

You might also be interested in

Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Subscribe to our newsletter
Advertisement
Back to home