SI Series 7: Innovation within Organisation

“If everyone had to think outside the box, maybe it was the box that needed fixing.” – Malcolm Gladwell, What the Dog Saw.

Another side of innovation is an internal innovation, where a company innovates the way they structure their company. One such structuring tool, is Holacracy. Holacracy is a “new way of running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micromanaging boss. The work is actually more structured than in a conventional company, just differently so. With Holacracy, there is a clear set of rules and processes for how a team breaks up its work, and defines its roles with clear responsibilities and expectations” (1).

The name Holacracy comes from the term ‘holarchy,’ coined by Arthur Koestler in The Ghost in the Machine, which refers to ‘holons’ that simultaneously function like organs in a body (as parts and holes) (2).  It’s innovative in that it works different than the standard hierarchy structure that 99% of most companies or organisations adhere to. It’s interesting to note that while our country is a claimed democracy where we have a right to vote, 50-55% of our waking workday time is spent at under an employer (3), in a type of oligarchy or plutocracy, where the power resides in the hands of the wealthy few (ie, one well-paid CEO, and a handful of unseen powers that are the Board). At work, we have little self-determination and have little or no voting power on how the organisation runs. Holacracy shifts this structure in several key ways:

  1. It changes Job Descriptions to Roles. Roles are defined around the work that needs to get done, not people, so, in Holacracy, one person may have several roles.
  2. Distributed Authority vs Delegated Authority. Authority is distributed to teams and roles where decisions are made locally.
  3. Rapid Iterations vs larger Reorganisation. In Holacracy, the teams self-organize, so that structure is updated regularly via small iterations.
  4. Transparent Rules. Everyone is bound by the same rules that are visible to all; including the CEO (4).



Calgary local social enterprise Conscious Brands (CB) is one such company that uses Holacracy. Matt Mayer, one of the partners at CB, says it is a very powerful and elegant co-evolutionary system, giving CB a lot of clarity around structure and the ability to move the organisation’s purpose forward with greater ease. Because their roles are clear, they’ve been able to move to action in a very focused way during meetings. It redistributed any sense of authority, or power dynamics, and gives the authority for individuals to make decisions in that role. Holacracy abolishes certain roles that aren’t needed, so when there’s no longer service or function for a role, you can get rid of that role, instead of the person. As we know, traditional models gets rid of the person. For example, there are 30 roles in CB, but there is actually one person who only does Marketing.

Challenges? Holacracy’s maturity is young, so it’s evolving, says Mayer. It also doesn’t expressly deal with the human element, as it’s a governance system by design. Thus, it doesn’t factor the culture, individuals and emotions within an organisation (not that a regular hierarchy does). Holacracy gives consciousness of an organisation as an organism, and not necessarily the individuals in it. CB, however, has realised this, and are thus making shifts accordingly. They have built into the system aspects of the human dimension; for example, they created a role called the “culture steward” to fill this void, a role that looks at energy and pays attention to enable cultural, personal and emotional conditions.

Whether your organisation switches to Holacracy or not, the key question that I posit is: “Do you feel the structure of your organisation has the spirit of innovation in it? Do you feel your voice is heard? Do you feel empowered in your role, or constantly under scrutiny? Is your work meaningful to you?”

Innovation can happen through the work that an organisation is doing, or, as seen here, in the very structuring of that organisation.

– Mike Unrau

This blog was written based on an interview with Conscious Brands partner Matt Mayer who is based in Calgary, and out of my own research. See for more info.

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