Holacracy, a relatively new term in today's corporate world, refers to a type of organisational governance in which decision making authority lies in the hands of the vital many over the trivial few. The power quotient is distributed across a fractal holarchy of self-organising teams rather than being vested at the top of the pyramid. The term holacracy is derived from the term holarchy, coined by Arthur Koestler in his 1967 book "The Ghost in the Machine". A holarchy is composed of holons or units that are autonomous and self-reliant, but also dependent on the greater whole of which they are a part. Thus a holarchy is a hierarchy of self-regulating holons that function both as autonomous wholes and also as dependent parts.
The Holacracy system was incubated at Ternary Software, an Exton, PA, company that was noted for experimenting with more democratic forms of organizational governance. Thereafter, the system got great impetus when the American e-tailer Zappos.com decided to embrace Holacracy. This system aims at replacing the traditional top down approach by a more practical bottom up one. The grassroot level teams are the ones actually taking care of core operations and thus, their contact with customers is more significant. In such a scenario, it is highly probable that their decisions will be able to provide more value to the end user. Apart from them, it has been observed that the top management decisions are not always in sync with the customer expectations. The concept of Holacracy gives a new insight to the top management through the expertise of their employees.
In today's competitive world, attrition is a major concern for major organisations and the holarchy structure addresses this by giving a sense of belongingness to the employees. In Holacracy, bureaucracy takes a backseat and this is turn fosters the entrepreneurial spirit of the teams. Holacracy is claimed to increase agility, efficiency, transparency, innovation and accountability within an organization. The approach encourages individual team members to take initiatives and gives them a process in which their concerns or ideas can be addressed.The system of distributed authority reduces the burden on leaders to make every decision.
The flip side of Holacracy is that it may not always lead to superior Business Performance. Further, the hierarchies do not simply vanish; they exist but across teams now with a funneling approach. In light of the changing marketing context, it will be important to see whether Holacracy provides organisations with the desired competitive edge.
References:
1. http://en.wikipedia.org/wiki/Holacracy
2. http://www.zapposinsights.com/about/holacracy
3. http://www.forbes.com/sites/stevedenning/2014/01/15/making-sense-of-zappos-and-holacracy/
The Holacracy system was incubated at Ternary Software, an Exton, PA, company that was noted for experimenting with more democratic forms of organizational governance. Thereafter, the system got great impetus when the American e-tailer Zappos.com decided to embrace Holacracy. This system aims at replacing the traditional top down approach by a more practical bottom up one. The grassroot level teams are the ones actually taking care of core operations and thus, their contact with customers is more significant. In such a scenario, it is highly probable that their decisions will be able to provide more value to the end user. Apart from them, it has been observed that the top management decisions are not always in sync with the customer expectations. The concept of Holacracy gives a new insight to the top management through the expertise of their employees.
In today's competitive world, attrition is a major concern for major organisations and the holarchy structure addresses this by giving a sense of belongingness to the employees. In Holacracy, bureaucracy takes a backseat and this is turn fosters the entrepreneurial spirit of the teams. Holacracy is claimed to increase agility, efficiency, transparency, innovation and accountability within an organization. The approach encourages individual team members to take initiatives and gives them a process in which their concerns or ideas can be addressed.The system of distributed authority reduces the burden on leaders to make every decision.
The flip side of Holacracy is that it may not always lead to superior Business Performance. Further, the hierarchies do not simply vanish; they exist but across teams now with a funneling approach. In light of the changing marketing context, it will be important to see whether Holacracy provides organisations with the desired competitive edge.
References:
1. http://en.wikipedia.org/wiki/Holacracy
2. http://www.zapposinsights.com/about/holacracy
3. http://www.forbes.com/sites/stevedenning/2014/01/15/making-sense-of-zappos-and-holacracy/
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