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Everything you need to know about Holacracy.
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Yes, we know. “Holacracy” is kind of a weird name, but we’ve come to appreciate the unconventional.

For the curious, the word “Holacracy” comes from the concept of a “holon.” Author Arthur Koestler invented this word to describe something that is both a part of a larger system and a fully independent whole. He wanted to get at the idea of an autonomous entity that forms a part of a larger, autonomous entity.

Think about the individual human cell – each one functions independently without supervision from a “boss cell.” At the same time, they form part of a larger structure, such as an elbow or a lung, and, at an even higher level, a complex organism like you.

At every level, holarchies honor both autonomy (the individual) and collaboration (the whole). This is the kind of structure Holacracy aims to achieve, as well. Pretty cool, right?

Okay, but what exactly IS Holacracy?

When talking about Holacracy, we often describe it as an “operating system” for organizations. What do we mean by this?

Well, while many non-programmers may believe their computers function by invisible witchcraft, this is not, in reality, true. There’s actually a complex governing structure that tells your programs and applications how to play nice with one another so that you can surf the web or write an email.

Organizations also use operating systems to help workers play nice and get things done. Chances are, the operating system in your organization is a traditional management hierarchy. Hierarchies help organizations achieve alignment through a chain of command; when in doubt, workers defer up the ladder for important, tie-breaking decisions, strategies, and priorities.

Holacracy is a different sort of operating system. Instead of relying on people (well, bosses) for these directives, it uses a process to achieve organizational alignment. Read on and check out our Introductory Webinar to learn more about how it works.

So . . . what’s in it for us? I mean, why should we organize with Holacracy?

Why might you upgrade your computer from an older system to a new one, or from a PC to a Mac? (Sorry, PC users! We still love you.)

The reason is probably not because of the system itself but because of what it allows you to do. Maybe you want to be able to work faster. Or perhaps you’d like to be able to try some cool programs that just won’t run on the trusty old PC.

Holacracy will help you to do many of these same things in your company. Once you’ve learned the ropes and are up and running, there’s more that you can do, like:

There are a lot more benefits, too, like increased employee engagement, as individuals previously at the “bottom” of the hierarchy get the opportunity to contribute more creatively in their roles. Check out this article if you’d like to read one employee’s experience with Holacracy at Zappos.

What should we expect if we try this crazy Holacracy thing?

We want to be totally honest with you. Learning Holacracy takes time.

Most of us have a lifetime of practice in navigating traditional management hierarchies, and we’ll need to unlearn these habits in order to learn new ones. Ask anyone who has ever tried to learn a new golf swing or improve their diet; changing habits doesn’t happen overnight.

David Allen, author of Getting Things Done: The Art of Stress-Free Productivity and experienced Holacracy practitioner, says that Holacracy is a five-year journey. He doesn’t mean it takes five years to learn Holacracy well enough to use it. With support, most organizations can do that in a matter of months. What he means is, it can take as long as five years to become a top-of-the-line, high-functioning practitioner. (Read more about the David Allen Co.’s journey into Holacracy here.)

The more experience your organization accumulates practicing Holacracy, the faster and easier using it will be. Ultimately, you’ll find that Holacracy will become as mundane and invisible as your computer’s operating system, except in those moments when you step back and notice how much easier something is than it used to be back when you were running on an old system.

But how could you possibly ensure accountability without bosses telling you what to do?

In the early 2000’s, Holacracy founder Brian Robertson spent years of trial and error running cultural and organizational experiments in his software company, as he searched for an answer to this elusive question. What emerged from this series of experiments was a process, or a set of rules, that everyone in the organization - from CEO to janitor - agrees to play by.

This rule set is the Holacracy Constitution, an open-source document that continues to be refined and improved with every iteration, thanks to input from the many organizations practicing Holacracy.

Each Holacracy-powered organization has its own unique set of “Governance records,” which is just a fancy way of saying who is responsible for what. We created a program called GlassFrog to manage the Governance records so it’s easy to find the information you need when you want to get something done.

Organizations using Holacracy update their Governance records regularly, so that new on-the-ground realities are captured in a place where everyone can find and refer to this information. The process for how to evolve your company’s structure to keep up with reality is part of Holacracy’s secret sauce, and is captured in, you guessed it, the Constitution.

The Holacracy Constitution? You expect me to read that whole thing?

No, we don’t expect you to read that whole thing. Or go ahead and read it, but please don’t plan to learn Holacracy by reading the Constitution.

You learn tennis by playing it, and you learn Holacracy by practicing it, preferably with the support of an experienced Holacracy Coach. But you can always refer to the rule book (Constitution) when you get stuck. That’s the beauty of a transparent process.

Whether or not you ever read the Constitution cover to cover on a rainy Tuesday night, with practice, you’ll learn the rules of Holacracy and improve your play.

So . . . Holacracy is like flat management, right?

Well, it depends on what you mean by “flat.”

Many people use the term “flat” to mean either: a) there is no formal structure or b) there’s a CEO hovering over a collection of mostly unstructured teams.

On the contrary, Holacracy actually has a LOT of structure. In many ways, there is actually a lot more structure in Holacracy than you might find in a hierarchical organization. And we think this is healthy.

We’ve found that the right set of minimal set of rules can function like the property rights in a modern city, allowing each individual to function productively without micromanagement. Some of this structure is highly flexible (like the different job responsibilities, which can be easily updated) and some is fairly permanent (like the rules of Constitution, which tell you how to update job responsibilities.)

This kind of structure means that every employee in a company, no matter their rank or pay-grade, can feel comfortable to lean in and make important decisions in their roles without worrying about getting consensus or playing politics. It also means organizations can respond more quickly to their environments without decision bottlenecks slowing their progress.

So, is Holacracy flat management? Kind of, but actually not at all.

How do you deal with hiring, firing, and other stuff that managers normally do?

Every traditional hierarchical company has its own approach to age-old questions like how to hire, fire, and compensate employees. Whether it involves a 360-degree peer evaluation or a quarterly performance review, your organization has likely found some unique solution based on its individual needs. Each of these solutions will be built on top of the management hierarchy, meaning there’s likely a manager involved somewhere in those processes.

When you update your operating system to Holacracy, you might find that you want to evolve the way that you handle these tasks . . . or not.

A number of experienced Holacracy-powered companies have begun experimenting with new approaches that fit their company’s evolving culture and needs. Some have even begun to exchange ideas with other Holacracy-powered organizations, further developing and adapting the prototypes of others. You can learn about a few of these novel approaches here.

And while we think all of this trailblazing is awesome, it’s not at all required.

Many companies find they can adopt their old approaches to their new organizational “operating system” by switching out responsibilities that used to belong to managers to new roles with some minor tweaks. In fact, that’s a great place to start, while you’re building your Holacracy skills.