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Much ado about Holacracy: the elusive diagonal in organisational decision making.

August 28, 2014

I’m fascinated by how people make decisions when we come together, especially when there is no explicit process on how to decide. Our attention tends to become fixated on the content of what to include, what should happen, what evidence to consider for or against a course of action. Seldom do we pay attention to the patterns of the social interactions, the first steps that become group habits. Who suggests a course of action? Who shoots down the idea? Who asks questions of the group that frames the problem or bounds discussion? What governs who should say what and when? 

Holacracy is an organisational operating system and approach to decision making that has recently received much attention, both high profile support at Zappos and mildly condescending reviews like this one from the Economist. Some commentators conflate it with being a flat structure, which displays a clear ignorance of the ideas and aspirations at the core of the system. I believe the cause of this interpretation is that the experiences many have with power and decision making in groups is confined to two types – what I’ll call vertical and horizontal.

Here I want to introduce a third way, a diagonal* in decision-making. It’s this diagonal that is absent from common organisational imagination. This is understandable as very few institutions value and embrace such processes.

Vertical

VerticalThis is where the authority for the decision (final say) clearly rests with an individual. This is the standard experience of traditional institutions. The military chain of command and later machine metaphors that have persisted into a democratic era.

It certainly has its advantages. It can be efficient and appropriate if the accountability for that decision, and consequences of failure rest unduly with the individual in question. I see this with entrepreneurs and small business owners whose livelihoods (and often mortgages) are tied to the consequences of such decisions. Of course they have the ‘final say’- employees and others can just walk away.

However while decisions can happen quickly, they can be brittle. Dominated by the perspective and worldview of one individual and often leave out important information that others hold. Overburdening  individuals with increasingly complex decisions can create process bottlenecks. Whilst one person can decide quickly, the creative and cognitive juice required is taxing and deferring creative decisions to an individual creates burnout and overwhelm.

It often doesn’t feel good to be part of these systems. Imposed answers tend to get subtle (or overt) forms of resistance. Most people tend to want a share in creating something together, this stimulates engagement and ownership of a decision, invites us to become shareholders in rather than spectators of the venture. When we sense our own perspectives and ideas have little impact we tend to retreat from offering them over the long term.

Horizontal

So what’s an alternative? Unfortunately the most familiar experience of group process is unstructured discussion loosely aiming at ‘consensus’.

Horizontal1

An advantage is that it can tease out previously unconsidered aspects of a topic, look at a problem from multiple angles and include diverse perspectives.

It can also ‘feel’ good. The latin root of consensus, consentio, means ‘feel together’, and there is a distinct harmonious quality to the ‘we all agree’ moment. Perhaps this is why many indigenous tribes and communities like the Quakers had similar practices. Many still argue that this form of group decision-making and distributing power is preferable to vertical approaches.

But knowing how to finally decide, when to stop discussing differences, integrate perspectives and converge around a conclusion is often unclear. Sometimes the impasse is broken by a reversal back to the vertical, as confident or socially dominant individuals reassert power and make the final call. Other times meetings drag on (in some cases literally for hours) as people are worn down by the discursive process. As proposals bounce around in loose discussion, attempts to shape outcomes that everyone is happy sometimes end in a decision with which literally no one is happy or feels a sense of ownership. In response politics begin outside the formal decision making process – people test out proposals and garner allies – so the actual formal discussion becomes more of a theatrical performance than a genuinely creative occasion.

Another horizontal alternative different to group consensus is the distributed ‘anyone can make decisions’ approach I sometimes see under the banner ‘it’s better to ask for forgiveness than permission’. While this may work in small teams in regular communication, scaling without clear process will result in incoherence, lack of coordination and duplicate activity. Sometimes even energy being directed in opposing directions.

Essentially horizontal processes tend to be too slow and unwieldy or incoherent for organisations aspiring to be lean, responsive and strategically focussed.

Diagonal

How could decision making processes maximise the efficiency and accountability of vertical systems and the openness and ability of horizontal systems to include diverse perspectives and relevant information?Diagonal1

Balance the tensions of the centralised iron cage of bureaucracy and disparate chaos of adhocracy?

In his recent book Reinventing Organisations Frederic Laloux offered twelve examples of organisations that are doing things differently, have created their own (I would argue diagonal) processes. Holacracy One – the organisation behind Holacracy – is just one of the 12 featured (in fact before the name Holacracy, an earlier form of their process was simply called Ternary’s Way, in reference to founder Brian Robertson’s software company).  

The key is holding a living (eco)system metaphor, integrating appropriate aspects of vertical hierarchy and horizontal networks to develop a sharper awareness of information (and tensions) across all aspects of an organisation, and, perhaps most importantly, the ability to respond with a fast next step.

This is what I see great teams dong instinctively – finding a third way through the traps of the vertical and horizontal.

This is what I see emerging formalised systems like Holacracy attempting to scale.

What do you see?

*I first remember discussing this term with fellow futures friend Jose Ramos

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2 Comments leave one →
  1. neil permalink
    August 30, 2014 4:21 am

    Very interesting Julian. I ‘see’ a tension between that which is illusive (considered neither true nor real), elusive (that which hides or withdraws) and allusive (that which is vicarious or indirect). These three moments of each diagonal express the ternary that you mentioned. I ‘see’ the ternary as a chord where (at least) three notes are ‘coming together’ – this is what I ‘see’ in the third sketch of your post. Neil.

    • September 2, 2014 3:43 am

      Thanks Neil. You’ve got me pondering further as always 🙂

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