3 Misunderstandings about Holacracy and The Customer Experience Holacracy is about as far from an “anything goes” world as you could possibly get.

1. grahamdbrown.com
http://www.grahamdbrown.com/3-misunderstandings-about-holacracy-and-the-customer-experience/
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3 Misunderstandings about Holacracy and The Customer
Experience
First misunderstanding: Holacracy is non-hierarchical?
(Source)
The f irst nonsense in this discussion is the notion that holacracy is non-hierachical. Holacracy, a
management practice developed by the entrepreneur, Brian Robertson, in his f irm Ternary Sof tware and
introduced to the world in a 2007 article, puts a lot of emphasis on consensual, democratic decision-making
and getting everyone’s opinion. At the same time, holacracy is explicitly and strongly hierarchical. If you
read the introductory article or the Holacracy Constitution 4.0 (2013), you will see that holacracy is
hierarchy on steroids: the hierarchy is spelled out in more detail than in any conventional organization you
have ever seen.
Basically, in holacracy, there is a hierarchy of circles, which are to be run according to detailed democratic
procedures. At the same time, each circle operates within the hierarchy. Each higher circle tells its lower
circle (or circles), what its purpose is and what is expected of it. It can do anything to the lower circle—
change it, re-staf f it, abolish it—if it doesn’t perf orm according to the higher circle’s expectations. The
word “customer” or a ref erence to any f eedback mechanism f rom the customer don’t appear even once in
the Holacracy Constitution. The arrangements are purely inward-looking and vertical.
In holacracy, each circle must meet the purpose as def ined by its higher circle. That purpose could be to
delight customers or it could be to make as much money as possible by taking advantage of customers
with “bad prof its”: the Holacracy Constitution is silent on what the purpose is. Brian Robertson has
expressed the personal hope that the chosen purpose will be noble. But the Holacracy Constitution doesn’t
make that hope explicit. Holacracy is neutral on the choice of purpose: neither the customer nor f eedback
f rom the customer f igure in the Constitution at all.
BUILDING WALLS vs BUILDING BRIDGES
Walls Bridges
Purpose Protect, Control Curate, Connect
Music DRM, piracy laws, punitive distribution
agreements, top-down distribution structure,
shelf -space
File sharing, on-demand, Youtube videos
Gaming Xbox One. Prevent gamers sharing physical
product or playing with f riends in same room.
DRM.
Of f line sharing of games, gamer f orums,
multiplayer online but same room, hacking &
mods
Customer
Service
Isolated, departmentalized, process
controlled, scripted
Cross-departmental strategy, core of
Customer Experience, everyone’s
responsibility
Corporate
Culture
Hierarchical, territorial, authority gradient,
departmental, distance f rom customer
Flat structure, close contact with customer,
empowered at f rontline
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Second misunderstanding: No managers in holacracy?
The second misunderstanding in the media is the notion that in holacracy there are no managers. In a
holacracy, there may be no one with the title of “manager”, but there are “roles” that are, in every respect
except the title, “managers”. Thus Brian Robertson wrote in his basic 2007 article:
“At Ternary, we have a ‘Project Manager’ role, accountable f or:
Creating and maintaining a project release plan.
Facilitating creation of contracts.
Invoicing clients at the end of each month.
Sending a daily status e-mail to the project team.
Holding a retrospective after each phase of a project.
Publishing project metrics at operational meetings.…”
The f act that this “project manager role” isn’t called a Project Manager doesn’t mean that there are no
managers. Nor does the f act that the accountabilities of the role can be changed in accordance of the
governing rules of the circle make him or her any less of a manager in the normal sense of that word.
In f act the responsibilities of the “core roles” in holacracy, such as Lead Link, Rep Link, Facilitator and
Secretary, are spelled out in exhaustive detail in the Holacracy Constitution. Any responsibility that isn’t
explicitly covered is assigned to one of these roles. To suggest that there are no managers here is absurd.
Third misunderstanding: In holacracy, anything goes?
Most of the media hysteria about the announcement at Zappos stems f rom these two misunderstandings:
no hierarchy and no managers, hence chaos. These misunderstandings would dissolve upon reading
Koestler, Wilber, the Holacracy Constitution or any of the related documents. If anything, the degree of
hierarchical prescriptiveness in holacracy is mind-boggling.
In f act, to an outsider, it is a wonder that anyone in a holacracy ever masters these detailed procedures
without the help of a resident lawyer, or that people ever have time to get anything done and deliver value
to customers, given the time and ef f ort needed to master and comply with these immensely complicated
internal procedures. It may be that once people get the hang of the arrangements, they’re not as
complicated as they look. But holacracy is about as f ar f rom an “anything goes” world as you could
possibly get.

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3 Misunderstandings about Holacracy and The Customer Experience
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