The Benefits of Holacracy – Morgan Legge – Convert
What is Holacracy
Holacracy is a method of decentralized management and organizational governance, in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy. Holacracy has been adopted by for-profit and non-profit organizations in several countries as a modern-day solution for business teams and remote teams alike. “...It’s very structured and within the structure, you have incredible amounts of freedom to do great things or to make big mistakes. As we know with great freedom comes a great amount of responsibilities. So if you know what your parameters are, and you are aware that if you mess up something, there's the expectation for you to take responsibility for that, own it and be transparent about it; then you're free to do whatever you need to do and make decisions you need to make for the end goal. And no one's going to tell you otherwise.” - explains Morgan.
She then delves deep into its relation with remote teams, which is a pivotal point in the discussion “...If you want to build or grow a remote team, this is a fantastic way to do it, because it gives you so much freedom as a founder.” Each member of the team has a role or multiple roles within the company; they are of course different in nature and effort type. Each role has a purpose and it must respond to different responsibilities and tasks, "...for example, one of the roles I hold is of holacracy boots-trapper. It's laid out anywhere how I have to do that and I can decide the best way that I think to do that. In my domains, there are several pieces of software that I own, which means that people cannot get involved in those without my consent to do that" - Says Morgan.
It's a mindset shift that needs to happen a lot of the time because as described by Morgan, this is an opposite structure to the standard organizational structures inside the companies. Having that micro-management approach, realizing and then, you know, going the complete opposite way. Holacracy empowers a lot of people, there's a huge degree of trust and transparency then involved; it requires a certainly different mindset.
Morgan shares with us how the CEO of Convert.com decided to implement holacracy in the equation "Dennis is a reformed micro-manager, he tells a story of how he was contacted on a Friday night at like 9 or 10 pm by someone asking for approval to buy a piece of software that costs like 30 bucks or something... He kind of got hit right in the face. Like, I'm the CEO of the company, why are people asking me for this kind of permission? This is so wrong... He had become the boss that he never wanted to work for. And he couldn't believe that all these kinds of blockers and impediments were there and I guess this level of micromanagement that he kind of put in place and then facilitated was kind of turning against him."
It's not something that requires a radical change of perspective, both for managers and employees. It does take work for sure, but according to Morgan it’s been an excellent tradeoff - “...And you know, it's been very successful for us in terms of allowing us to grow and scale the business and attract talent too, I think it's a win all around.”
Trust Within a Holacratic Model
Holacracy, however, critically requires a disciplined and truthful mindset among employees and teams to work properly, for Morgan this is why some companies fail to implement this model, “...the reality is, is that if you're lousy at time management and self-discipline to begin with, you're going to be an even worse remote working, it's just gonna bring out the worst traits that you have in terms of your professional or even your personal capabilities. It's not a band-aid to making work great or easier.”She then adds, “...you have to have a certain mindset, you have to hire the right way. You have to have processes and processes in place and things like that. It's not something that you just wake up one day and decide, oh, I'm going to do this and I don't need to do any work to make it happen. It does take work for sure. But I think that’s the nature of remote working, I see these tools and I'm sure that you have consulted with organizations who do this to you know, they have like a screen recording and they have timesheets and all this kind of things. And it's like, Where's the trust?”.
“We still need to have good bosses and companies that treat workers with respect and I will say that one of the things that we do is to still hire freelancers on a project basis. And so one of the platforms that we use is Upwork. And when we have any Freelancer we hire, we have them turn the time tracking off the screen share time tracking on their computer off. And it takes trust from them because there are some ramifications on their end in terms of, you know, payment and things like this. But for us, it's like, I don't need to see what you're doing. And secondly, it's a privacy concern, right? That's being captured. And that could be customer information. It could be any number of things. And we'd actually don't want that being stored somewhere that we don't have control over. So it's twofold. And you know, people freelancers are generally not used to working like that. They're like, what, wait, you trust me to do this? Yeah. You have a five-star rating. You've earned $50,000 like yes, I trust you’ll come and do the work.”
Managing Holacracy Through Different Time Zones
Excellency knows no international boundaries, and so it’s very common to find incredible people that suit an available position and align well with your company’s culture and ethic. For Morgan this is especially interesting - “...one thing that I realized really early on is that your best talent and your best people can be anywhere. If it doesn't matter when the job gets done, it then doesn't matter where your people are located. Because we work asynchronously. So actually, what's really cool is when I'm sleeping, there are people getting things done. Right. And because we work on this holacracy framework, there's a lot of freedom to make decisions. So we don't make decisions by consensus. And there's no need to wait eight or 10 hours for someone to get up to get online.”
Holacracy plants a deep understanding of self-discipline from employees and trust from managers, but in the end, reaping its benefits can turn a traditional business into an extremely efficient enterprise no matter how complex its structure or how many teams are working on-site or abroad.