Autopsy of a Failed Holacracy

This article was authored by Simon J. Mont and originally published in Nonprofit Quarterly’s winter 2017 edition, “Advancing Critical Conversations: How to Get There from Here.”

Many organizations are craving a new way of doing things. They feel the pressures of bureaucracy, understand the problems with hierarchy, and are ready to shift to new organizational models. This is especially true for organizations that exist for the express purpose of achieving social justice. Folks working in these types of organizations are familiar with the causes and reproductions of oppression, and they want to uproot them in their workplaces.

In the search for a new organizational model, some social justice organizations are turning to holacracy, a co-governance practice intended to empower meaningful decisions in pursuit of purpose; many are finding themselves completely unsatisfied with the experience. People I have spoken to in a wide range of positions in for-profit and nonprofit organizations have reported that holacracy is mechanistic and dehumanizing and that the model does not in fact have the potential to create the kind of workplace and world they want to see. Organizations that care deeply about social justice repeat many of the complaints of profit-focused businesses reported in the article by Ethan Bernstein et al., “Beyond the Holacracy Hype”—for example, that time spent on co-governance leaves less time for programmatic work; that it is challenging to learn how to operate within the system; and that too many roles and responsibilities make coordination and prioritizing tricky. But as the article points out, with justice-focused organizations there seems to be another layer, a tension that runs deeper than management, operations, and efficiency: a sense that these models aren’t addressing the deeper systemic issues having to do with oppressive power dynamics that are impacting people’s lives. This tension indicates that holacracy—and many of the models being promoted as “teal,” “dynamic governance,” or “sociocratic”—might be just as problematic as the hierarchies they are meant to replace. This dynamic is complicated by the fact that these governance systems claim to create environments where people are equally empowered peers collaborating without hierarchy; this creates a situation whereby holacracy (and the like) could turn out to be elaborate, albeit unintentional, gaslighting.

To gaslight is to destabilize someone by denying the person’s perception of reality and delegitimizing the person’s beliefs. This is done in order to cause the person to behave in a particular way or accept a certain state of affairs. In the context of organizations, the implementation of a new structure can create a powerful narrative of equity or transformation while leaving the underlying undemocratic dynamics unaltered. Having spoken with people from more than thirty organizations promoting holacracy and/or sociocracy, dynamic governance, or teal organizations ranging across sectors and issue areas over the past two years, I didn’t find any that appear to be gaslighting intentionally: all seem to be working in earnest toward being a force for good and transformation. However, elements of the ideology and language that surround these management models cast a shadow. If we don’t confront this shadow, we will have a generation of organizations that think they are creating a new world while repackaging old mistakes and failing to achieve the kind of deep shifts required for justice, sustainability, and meaning.

In 2016, I spoke with an organization in which the failure to confront this shadow explicitly resulted in the rejection of holacracy, a reversion to hierarchy, and a well of interpersonal tension. The story goes something like this: Senior management wanted to create a more just, empowering, and effective workplace. Part of this desire arose from their awareness that management was a group of mostly white, mostly formally educated professionals around the age of fifty leading an organization whose mission was to break down many forms of oppression. They did not know exactly how to go about changing the structure of their organization to reflect their values, so they researched and spent a significant amount of time learning about holacracy. Holacracy’s stated vision of a redistributed authority, respect for humanity, and liberated creative energy was exactly what they were looking for. They were grateful that holacracy provided a comprehensive framework and a constitution, and they suggested that their organization adopt it.

Holacracy replaces hierarchy, departments, and job descriptions with semiautonomous circles and roles. A circle is a small team that is responsible for a certain set of issues or tasks (called a domain). Circles have the authority to make decisions within their domain without seeking approval from a supervisor. This creates an environment in which, for example, the circle working on designing and delivering an educational program to a community does not need to report to an executive director or director of educational outreach or other such department. Circle members report to each other as peers. A circle only needs to check in with other circles when its activity affects or implicates the other circles. For example, an education circle would need to check in with the budget circle if it wanted to spend money on a new project.

Each circle in turn comprises roles. Roles are sets of functions and purposes that one or more people fill. This allows the group to break up the work of the circle into discrete bits. The relationship between role and circle is similar to the relationship between circle and organization: people in roles are empowered to do their work as they see best, and only check in with the circle when coordination is needed. Decision-making and coordination happen through highly structured meetings. The idea is that by loosely coordinating autonomous action, people are freed to use their best judgment to respond quickly to needs, instead of responding to the top-down exercise of power from people removed from the reality on the ground.

At first, the people in the organization in question were open to adopting the model. There was general agreement on the goals holacracy was supposed to enable, and they decided to give it a try. But right away, conflicts arose. Some people felt that their personalities and cultures were being repressed as they attempted to interact in the ways prescribed by the model; some felt excluded; some felt incredibly empowered; and some saw that the pattern of people who felt empowered reproduced the very dynamics of privilege and oppression they were trying to subvert. The organization split into two groups: holacracy champions and holacracy skeptics. Both groups agreed that the early-stage embodiment of holacracy had proven to be unsatisfactory and was not leading them toward their goals. The champions believed this was because the group was failing to work within the system; the skeptics believed the system was the problem.

This is where unintentional gaslighting entered the scene. The skeptics felt intuitively that there was a deep problem with holacracy’s effect on the organization, but they couldn’t quite pinpoint what that was. Despite having put into place holacracy’s circles and roles, familiar old power dynamics were reemerging. Some people felt like they were contorting themselves to fit within the system, while others seemed to experience the system as giving them wings with which to fly.

As nefarious power dynamics continued to creep in, it became more difficult for those marginalized by the system to articulate that a force related to issues like gender, race, and class was interfering with equity. The skeptics couldn’t quite put their finger on precisely what was happening because of how subtle the dynamics were and how tricky it is generally to talk about exclusion and power. When the skeptics did open up the conversation, the champions would respond that the problem must be with the organization and maybe even with the skeptics themselves. They repeated holacracy’s promises of empowerment and reminded everyone that a period of discomfort was to be expected in any transition. The skeptics’ negative experience contradicted the holacracy ideology, which proclaims that the system creates equity and empowerment by its very design—and those empowered by the system found it all too easy to blame the marginalized for their own exclusion.

Critics of holacracy tend to lack the vocabulary to voice their discomfort because holacracy—and the whole realm of management more generally—is considered to be an area of professional expertise. This in itself sets up a problematic dynamic: it situates the system above the users, and when we pay attention to the social identities of the people who tend to fall into the skeptics’ camp and those who tend to fall into the champion’s camp, the dynamic repeats. The champions in this story comprised senior-level management, who had spent time familiarizing themselves with holacracy before implementing it, and people who felt immediately empowered by the model, intuitively understanding that there was power up for grabs, and pursuing it actively. Who tends to be in senior management positions? White folks with advanced degrees. Who tends to be comfortable with pursuing power? People who have had positive experiences stepping into power—largely men and white folks. Unsurprisingly, the skeptics were mostly people of color who had seen all sorts of promises for equity fall short over their lives. In this particular case, white women tended to be champions, possibly because they occupied many of the senior management positions.

So, the well-intentioned attempt to increase equity, empowerment, and efficiency through the adoption of holacracy ended up with people in privileged positions implying that the reason the strategy wasn’t working was that people in less privileged positions just weren’t behaving properly. Any criticism of the system could be reframed as criticism of the critic. And in the case of the organization struggling with the negative effects of holacracy, what made the situation extra complicated is that some of the difficulties really were about the system and some of the difficulties really were about people’s behavior—but the group as a whole lacked the ability to name, discuss, and work with these sticky tensions.

A Pattern

I’ve spoken to a number of organizations that share this basic story. It’s not always senior management that becomes fixated on a specific model or solution, but there is usually a small group of champions for one particular system who are convinced that it holds the key—as long as the group learns how to work within it. When a system like holacracy does not reward its adopters, some abandon it and return to hierarchy, and some hope that sociocracy or some other system will fulfill the promise; others, however, toil away in discomfort, deciding that despite the imperfections, at least holacracy is not as bad as being subject to top-down power structures.

What it comes down to is this: folks crave a just, liberated, equitable, compassionate workplace, and there is a whole array of seen and unseen forces that make this difficult to manifest. The reasons go far beyond organizational structure. Our workplaces are made up of much more than just their organizational structures and governance processes: they are complex ecosystems of people, relationships, cultures, mindsets, and systems that exist within the social/political/economic/spiritual context of the broader world. To achieve the kind of workplace that holacracy and like systems promise to enable, we must be mindful of the implicit biases, explicit prejudices, intergenerational/historical traumas, microaggressions, and multiple other forces at play in most workplaces.

Shifting into a new formal structure is in many ways the easy part because it’s the most visible—the easiest to put our hands on and tinker with. The real work comes when we have to relearn how to relate on personal and interpersonal levels and look at the project of co-governance in the context of our full human lives. A new organizational structure can create new possibilities for the ways we relate to each other, but internalized ways of thinking and being can cause us to fall back into old patterns without even realizing it. This gives rise to an invisible structure of exclusion and inequity despite any visible structure of empowerment that may have been put in place.

Models like holacracy focus their attention on some of the most visible elements of our organizations: decision-making processes, organizational charts, task delegation, and so forth. When teams adopt the models without being aware of how these visible systems relate to more subtle but equally powerful forces within organizations—colonial cultural norms, implicit biases, internalized oppression, microaggressions, and interpersonal power—they run into trouble. It is especially important to discuss this problem openly because some of the solutions suggested by new models carry with them aspects of the very problem social justice advocates are trying to solve: pretending we live in a “post-racial” society, and thus creating space for racism to go unaddressed; creating environments where people of certain identities dominate organization direction and decision making; deeming certain cultural forms of self-expression unwelcome in the workplace.

There are many different people creating and talking about new ways to organize groups—and different communities use different words to refer to their projects (holacracy, sociocracy, teal, dynamic governance, flat structures, and so forth). This broad and diverse movement of thinkers, practitioners, and the frameworks they inhabit and the models they use represents a wide spectrum of sensitivities to the dynamics of identity, power, history, and colonial norms. Holacracy, with its mechanistic and colorblind system, sits at the less conscious end of the spectrum. Its founder, Brian Robertson, seems convinced that his system suits every environment, and he makes it very clear that if people experience problems with the model, the cause lies within themselves and they should change their own internal mindset. This creates a rigid system that relies on conformity. Systems like sociocracy, on the other hand, are often presented more humbly as part of a constellation of practices (including nonviolent communication and anti-oppression trainings) that support the emergence of new systems over time. Regardless of the brand or buzzwords associated with a new governance system, it is essential to be sensitive to the limits of what a new structure can actually provide, the way that different people experience and perceive the system, and whether the system is serving the people or the people are serving the system.

Examining the Foundations of Holacracy

To understand why holacracy (or any formal design of an organization, for that matter) isn’t enough, we need to witness some of the mindsets and assumptions that underlie it. The mindsets we will examine here are not unique to holacracy; they appear often in conversations about new forms of organization and management. We are focusing on holacracy as one specific instance of a pattern that is present in the conversation about new organizational models.

Three of holacracy’s central assumptions are worth naming in order to enable us to see its limits and begin imagining new possibilities: (1) maximizing autonomy and coordinating the behavior of individuals is central to good governance; (2) explicit, linear, reproducible meeting processes and language are always preferable; and (3) the role/circle system holds space for everyone to have and use power. This paradigm produces some great tools, but it comes with some problems. We will walk through each mindset and its limitations.

The first two assumptions are not surprising when we consider that the system’s creator is a white man with a background in computer programming and software development. His thinking exists very much within a scientific enlightenment framework that emphasizes autonomous individuals and focuses on easily visible aspects of reality. Robertson follows the historical arc of this thinking by using leading-edge science as the guiding metaphor for human organizations. In his 2015 publication Holacracy: The New Management System for a Rapidly Changing World, Robertson refers to holacracy as a co-governing “operating system,” and his predecessors as having designed management systems to “keep the gears moving.” It is the updated version of a worldview that sees humans as component parts within a mechanistic, rule-based reality.

The third assumption flows from a simplistic conception of power. If the only source of power (the ability to influence others) arose from the formal delegation of power to individuals within the system, then roles and circles might be sufficient to achieve an ideal balance. Social human power, however, is incredibly complex. Creating a structure of roles and circles does not somehow create a balance between people whose relationships carry the weight of personal and cultural histories. This conception of power is in line with the philosophies that underlie the dominant bureaucratic state and institutional structure, but it fails to accommodate the wisdom of generations of activism, storytelling, social theory, and psychology.

All this is not a condemnation of holacracy or Robertson. It is an observation that he is a particular person with a particular intellectual and experiential background that influences the design that he created. His work is certainly valuable; like all work, it has its limits. The tricky part is that his assumptions are so resonant with mainstream American ideology that we might not even recognize them as assumptions. By being explicit about some of the foundations of his thinking, we can begin to see how we might make different decisions. These assumptions are not unique to holacracy; they permeate many conversations and theories about co-governance. We are focusing on holacracy as a case study because of how clear the assumptions are and how deeply their impacts are felt by many practitioners.

Breaking Down the Assumptions

Assumption #1: Maximizing autonomy and coordinating the behavior of individuals is central to good governance. This mindset allows us to focus on our individual experiences, honor the leadership and creativity of all of us, and increase efficiency by reducing needless communication. The shadow side of this paradigm is that it can lead to too much individualism.

Most people living in America have over time had individualism ingrained deeply into their minds and behaviors. We are taught that if each of us looks out for our own interests, the invisible hand of the marketplace will produce an equilibrium that meets everyone’s needs. This increases the resonance of holacracy’s philosophy of governance: Of course, we should maximize people’s freedom to do what they think is best! Of course, it would be ideal if I had to check in with people as little as possible.

The trouble is that people with different identities, backgrounds, and personalities have varied experiences with this type of individualism. Some have been taught that if they move quickly and assertively, they will get what they want, while others have been taught that they will be ostracized. Some people feel that they could contribute if they were just allowed to; others feel that they need support and collaboration.

All of this and more adds up to situations in which people feel and behave in roles differently. A person who has positive experiences exercising individual autonomy in our culture may immediately view and experience autonomous roles as empowering; they may feel “freed” because they don’t need to check in with other people. Folks who have been punished by society when attempting to assert autonomy will be aware that simply saying that everyone is empowered to act doesn’t remove the threat of many types of oppression, both visible and invisible, that could be leveraged against them. Without responding to the very real presence of trauma and power differentials, the sudden statement that “every individual is equal” can sow the seeds of conflict and reproduce the unstated power differentials that are in place in broader society.

On top of this, many people who want to build a liberated and cooperative space are on high alert to the risks of individualism and see it as a threat to realizing that vision. They may even come from cultures where they were taught to deeply value close communication, feedback, and collective decision-making. Acting from an individualistic role will be antithetical to such people’s intuitive way of working—and sometimes even their ideas about what is good, healthy, moral, and sustainable. Holacracy is not complete individualism; there are teams, integrative decision-making, and so forth. But it does have a bias toward empowering individual action. To get a sense of the implications of such a bias, imagine instead a bias against individual action. A system with a bias against individual action would seek to limit the autonomous operational space of roles held by individuals and instead would use consensus-based decision-making as often as possible. This would produce a high degree of transparency, demand the establishment and maintenance of many interpersonal relationships, and create a sense of community identity. Of course, it would also take longer to make decisions.

There is not an overall right or wrong balance, per se—but there is a right balance for each particular group. Holacracy seeks to empower individuals for the sake of individual autonomy and operational efficiency, but those aren’t the only values in the universe. A wise organization will balance these with values like establishing equitable power relations and fostering a sense of community.

Assumption #2: Explicit, linear, reproducible meeting processes and language are always preferable. The meeting processes of holacracy are clearly defined and regimented. They provide a structure that, in theory, focuses the group on the most relevant information and surfaces it in a manner to reach efficient decisions and action plans. It cuts through the noise of many meeting environments and tells people exactly how to show up. This is the way of the businessman and the computer programmer. It’s great—sometimes. Holacracy may be a great management operating system, but not everyone is excited about being a series of 1s and 0s. We can harness holacracy’s benefits and supplement its shortcomings when we remember that we don’t need to be completely attached to the holacracy processes or its belief that everything should be linear, identical, and reproducible throughout the whole organization.

This regimented way of interacting is also in direct contradiction with the norms of many indigenous communities, faith-based communities, communities of color, queer communities, and communities of various national origins. For many of us, less structured space is necessary to feel welcome, safe, present, and whole. Significant wisdom is found when we practice patience, move more slowly, and unravel ideas in a nonlinear fashion. In fact, the imposition of urgency, linearity, and a structure that dictates how and when people can show up is a core component of the very hierarchical structures holacracy is supposed to replace and the colonial and patriarchal frameworks that many social justice organizers seek to reimagine. The refusal to practice patience, listen deeply, meet people on their own terms, honor stories, and understand complex interconnectivity lies close to the heart of many of the ills our society is perpetuating. Unfortunately, these mistakes are seen as successes when they enable quick decisions, straightforward thinking, and “rational” deliberation directed toward measurable goals and profits.

Many people have a preference for working in an explicit system that they can understand. When we organize ourselves to accommodate this preference, however, we narrow our awareness to only the things that we can make seem explicit and understandable. This results in reductive frameworks that do not accommodate the true complexity involved in our decisions and actions and that exclude information that might be valuable—simply because something does not fit into our predetermined rubrics. For example, if we decide that only quantifiable metrics are “reasonable,” then we exclude stories, feelings, and meaning from our decisions. This type of controlling of what is “true” or admissible to conversation is exclusion in the name of clear, linear rationality, and is central to the perpetuation of oppression. It leaves us making poorer decisions because we ignore important perspectives. This need to exist in a structure we can understand causes many to impose a reductive and exclusionary framework instead of being humbled by the fact that it is literally impossible to understand the complexity and interconnectedness that surrounds us.

That said, such circumstances can create a phenomenally generative creative tension—so long as we stay mindful. We can use highly structured processes in some spaces and completely organic and fluid processes in others. We can experiment with different levels and types of structures to be able to relate in ways that meet the needs of the moment. Different groups can find the processes that work for them in relation to their tasks. With a variety of processes occurring throughout the organization, individuals will sometimes feel completely at home and at other times will feel on edge. Such mixtures of safety and tension can create learning and trust. Different consulting groups and frameworks suggest this idea to varying degrees. High degrees of structure can be useful. Some (myself included) take for granted that when we step into a formal design structure we will find space to relax, be present, and coordinate behavior smoothly. But a regimented cultural construct doesn’t immediately feel good for everyone—and feelings vis-à-vis cultural constructs matter, because they signal to people where they have space to belong, show up, have a voice, and be liberated.

In fact, meeting structures like that of holacracy render some types of communication and exploration impossible. For example, holacracy allows little space for people to refine an idea through direct debate, explore interconnected terrain through free association, or have a natural conversation as one would do casually among friends.

A similar cultural disconnect is at play within the holacracy vocabulary. Words like lead link, integrative decision-making, triage, and tactical meeting all carry certain cultural connotations that resonate differently with different people. These are words evidently written by someone who cut his or her teeth in the software startup universe. Reimagining the vocabulary your organization uses—designing a way of speaking that references different people’s identities and reflects their values—is a great way to intentionally create culture.

Assumption #3: The role/circle system holds space for everyone to have and use power. Holacracy does create space for everyone to have and use power, but only a certain kind of power. If we understand power as the ability to do something in a particular way or influence others to do something in a particular way, then it’s easy to see that there are many different types of power. There is the power we use when we vote (formal power), the power we use when we give a dog a treat (reward power), the power we use to solve an algebra equation (expert power), the power we use when we put a child in time-out (coercive power), the power we use to give insider information to some people but not others (informational power), and the power that we use, consciously or unconsciously, by being in gendered/racialized/able bodies in the United States (referent power).

These six types of power, defined by social psychologists John French and Bertram Raven, aren’t necessarily complete, and they aren’t the only way to understand interpersonal power. But they help us to see a key point: the holacracy system specifically focuses on distributing formal power and expects the distribution of formal power to create more equitable workplaces. It leaves the other sources of power unmentioned, and that is a big oversight, especially when we are trying to be intentional about creating a world where everyone is safe enough to live a vibrant, expressive, and meaningful life.

Giving ourselves specifically delineated roles does not change the fact that we have been conditioned by such factors as race, class, gender, sexuality, and ability. It does not change the fact that there are cultural assumptions ingrained into our conscious and subconscious mental processes that cause us, for example, to treat male-bodied and female-bodied people differently for doing the same activity. And it doesn’t change the fact that the power of such societal structures as, for instance, patriarchy, racism, or classism has caused us to develop patterns of behavior that limit ourselves and others.

To understand this, we can imagine a set of twins (female, for the sake of grammatical simplicity). As they grow up, one is consistently told that she deserves to pursue her dreams, take what she wants, and be who she wants to be. The other is consistently told that she is not entitled to autonomy and was created to serve, and she is punished when she expresses herself. These life experiences will shape the twins’ personal, emotional, and cognitive development. If the two are later put in a room together and told, “You are equals—act autonomously and make collaborative decisions,” the mere fact that the words were uttered would not somehow make them true. Each twin would be facing completely different internal psychological dynamics impacting her thoughts, feelings, behaviors, and the way she identifies and uses her own power.

This is an oversimplification, of course, but it serves to illustrate just one of the many power dynamics at play within an organization. The point is that different pasts can influence the present, and in ignoring that influence we fail to recognize aspects of reality that must be accounted for in a system designed with the intention of empowering all who use it.

People will experience power within holacracy differently. These differences will be mediated by an uncountable number of factors, ranging from various axes of identity to personal history to personality to idiosyncratic trauma. This creates a situation where some will feel liberated by holacracy, others will understand how it can be liberating in theory but will not themselves feel liberated, and still others just won’t buy into the system at all. People who are most often oppressed by unstated/invisible forms of power are less likely to feel liberated or to see the potential for liberation until the whole group speaks frankly about the various forms of power. If this is not done, some in the group will assume that everything is fine, while others will be silenced.

There is no way around the fact that equally distributing power is much more complicated than designing a particular governance system. It’s about developing new awareness, and relearning how to relate to ourselves and one another.

The Takeaway

There are plenty of organizations that aren’t highly responsive to power, oppression, identity, or justice that are thriving within decentralized models like holacracy. There are plenty of organizations that are simply seeking to be more efficient, retain employees, attract talent, and disrupt old management techniques. This is the case with much of the work being done to create new organizations in the mainstream. For such groups, wrestling with the subtler dynamics of exclusion, capitalism, colonization, and oppression may not be necessary. But those of us who want to see justice, dignity, equity, collaboration, emergence, and genuine collective action take place within our organizations need to be very clear about what we are doing and what it will take to succeed. We are not just trying to make our organizations more impactful or efficient. We are not trying to keep up with the latest management fads. We are trying to create organizations filled with compassion, wisdom, love, justice, equity, and transformative potential—things that, due to the limits of language, we are barely able to describe.

To create the organizations we crave, we must remove the barriers, and there are so many more barriers than just control-based hierarchy and bureaucracy. There is so much more between us and our dreams than just outdated organizational models and decision-making processes. New governance, management, and coordination models are an essential part of the puzzle, but we cannot pretend that they are enough. There is no new structure within which we can operate that will magically bring us the world we want to see. We have to try different strategies, see if they fit, and make adjustments within, around, and between us in order to find what we are looking for. New models promise a lot and rarely deliver. When this happens, we have to move forward—reinventing the reinventions, not reverting to the subtle tyranny of familiarity.