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Holacracy and SelfOrganization
Zappos has been officially using Holacracy since January of 2014, but our
experiences with it have been largely shrouded in mystery to the outside world.
What better way to know about what is happening in Zappos with regards to
Holacracy and self-management than for us to share that with you ourselves?
We will be providing you with insight into our own successes and struggles, as
well as what we have learned over the years. We’ll share how you can benefit
from self-management, whether you are looking to change your entire
organizational structure or just slightly improve how you do things.
What Is Self-Management / SelfOrganization?
At it’s core, “self-management” means knowing exactly what you are responsible for, and having
the freedom to meet those expectations however you think is best. “Self-organization” is being
able to make changes to improve things – beyond what is required of you. Simple in theory, but
everyone has to truly commit for it to work!
Then, What Is Holacracy?
There are countless different methods for a company to become more self-managed and selforganized. Holacracy, which was created by HolacracyOne, is one of them. Holacracy is like an
operating system for your organization. It is a predefined set of rules and processes, checks and
balances, and guidelines that an organization can use to help them become self-managed and
self-organized by giving every employee (instead of just management) the power to innovate,
make changes, and have a voice.
Okay, So Why Did Zappos Want To
Be Self-Managed/Self-Organized?
Zappos has always been focused on delivering exceptional customer service – we call it WOW
service. To provide WOW service, it’s important that every employee understands our
customers’ needs, and has the ability to improve the customer experience whenever possible. As
our company grew, we became slower to sense and respond to customer feedback, because of the
layers employees needed to go through to get things done. Holacracy is a tool that allows every
employee to quickly surface and act on customer feedback, so we can continuously provide
WOW service, regardless of the size of our company.
But Why Use Holacracy
Specifically?
There are a lot of companies self-managing in a lot of different ways, but most of them created
and developed their own unique method and honed it over several years. So, why did we go with
Holacracy? Aside from it arguably being the most publicly well-known, it is one of the only prebuilt, out-of-the-box options that any organization can implement, regardless of size, sector, or
industry. Holacracy immediately provided us with a set of rules and processes that everyone
could see, with a lot of the nuances and checks-and-balances already figured out for us.
Are You Still Using Holacracy?
Zappos is still using Holacracy and we currently have no plans to change that. However,
Holacracy is built to focus on the work, rather than the people, while Zappos is *all* about the
people. So, we’ve evolved how we use Holacracy to find ways to layer our culture, core values,
and focus of people into the system in a way that works best for us. One example of how we’ve
kept culture and people top of mind while using Holacracy was by integrating our Oath of
Employment into our Holacracy practice.
“Attention Zappos! With all this exciting talk about Holacracy and its implementation across
Zappos, you might be wondering… Where and how do the Zappos Core Values fit in all this?
Hold that thought.
If you haven’t yet, you will soon be learning all about Holacracy. One sentiment you will hear
frequently is that in Holacracy, we make the implicit, EXPLICIT! 🙂 Or in other words, we use
Holacracy to clearly state our work, our accountabilities, and our purposes. No more unspoken
or “understood” expectations. All of it goes into Holacracy and GlassFrog now yo!
We all know that our culture and our core values are THE secret sauce behind not only our
success, but our love for this company and for being a part of it.
That said, we want to clearly place our Core Values, the backbone of our Culture, into
Holacracy and GlassFrog so there is no question that even in this awesome movement towards
self-organization, our Core Values come first.”
Interested in Holacracy and SelfOrganization?
If you want to understand Holacracy itself, you can visit this link to find a variety of resources to
give you insight into the core concepts of the tool. While we may share some of our personal
thoughts on Holacracy, most of the content you’ll see from us will be our take on how to selfmanage in a simple, yet effective way that integrates with your company culture.
Articles and FAQ on Holacracy and
Self-Organization
What are the benefits of self-management and self-organization?
High level, you have less layers between your employees and your customers. So you get faster
and more creative decisions that improve customer satisfaction.
Was it easy to implement self-management?
Definitely not. It was a new venture for us and we had to overcome a lot of hurdles to get to
where we are. However, the hindsight of our challenges has also taught us a lot, which will
surely benefit us as we continue evolving and moving forward.
Do you really have no managers?
Yes and no. We still have leaders and a lot of people associate leadership with management. We
still need people to hold others accountable and terminate people when necessary. In traditional
structures only managers/execs have the authority to make changes/decisions. In our
organization everyone has the authority to make changes to the company and decisions in their
work.
Can people really do whatever they want?
It is a common misconception that in order to be self-managed people can do whatever they
want. When true self-management is happening, people understand exactly what is expected of
them and then have the ability to do what they think is best to get that done. The clearer the goals
and expectations, we found, the more effective it is to self-manage. There are still rules and
guidelines – job specific and Zappos culture specific – that people must adhere to. Everything we
do must also remain compliant and legal. The key is communicating to employees that we want
folks to find the intersection between what they are passionate about, good at, fulfills the purpose
of the company, and is in the best interest of Zappos.
Zappos Insights (2018). Holacracy and Self-Organization. Retrieved from
https://www.zapposinsights.com/about/holacracy
No more Policies, Processes and
Rules in self-management with
Holacracy?
Ruben Timmerman
Nov 28, 2017
W
hen your colleagues all self-manage, who makes sure
everybody adheres to certain rules? Is there some magic that does
not require optimal processes to be written down? Are policies an
archaic instrument not needed in self-management heaven?
Nope. Probably even the contrary: our self-managed organisation
is arguably more documented, more structured and more explicit
than your average corporate in a heavily regulated industry.
If it’s not written down, it doesn’t exist.
One of the base rules at Springest is that we write things down,
almost always in Asana with some exceptions at circle level (eg.
developers make comments on code in Github because that suits
the work better). If we talk about some work that has to be done,
the conversation will end with “I’ll make a task for you in Asana”.
Work itself is explicit in roles and the
consitution
One of the main and first benefits of Holacracy is that there is
a rule book, the constitution, that everybody adheres to. Why?
Because the formal and legal power holder (me, in this case, as
founder and majority shareholder) has signed a contract that it is
so.
Our publicly available governance records, exported from Asana and visible at
http://roles.springest.com.
Of course, in Holacracy, there is a process for keeping track of
what can be expected of whom. The governance process defines
circles and roles, consisting of a purpose, accountabilities, and
optionally domains and policies.
But if something is expected, it doesn’t mean that it will happen.
That depends on how the role holder chooses priorities. There is
always more to be done than can get done. But if work is done,
sometimes you want to make sure it’s done in a certain way…
An explicit role with expectations for
each employee
The Springeteer role in Asana, where our governance records are stored.
At Springest, this starts with your Springeteer role. It lives in our
Alignment circle, our renamed “General Company Circle”, and
everyone working at Springest holds it as non-core circle member.
You are not allowed to drop it because it’s in your employment
agreement. As you can see in our governance records (it
synchronizes with Asana every hour), it contains links to other
policies and rules that are updated by other specific roles and
communicated via Sputr or Asana.
Policies for circles and roles
Part of the governance record of our Alignment circle, including some policies.
In Holacracy there is a construct called Policy to basically limit
access to certain things (a Domain, or something the circle by
definition has authority over) unless you respect the policy. We
tend not to use them too much, because they’re harder to parse
than accountabilities, which are more direct.
However, we do have some policies on our Alignment circle that
govern how we work together. We sometimes doubt whether to
make a certain rule into an accountability of the Springeteer role
which we added only a year ago, after running on Holacracy for 4
years already. Or, to add the rule as a policy. We instinctively
choose accountabilities for something you actively do and that can
be expected (which policies are not for), and policies for the way
that you do it.
Rules of Engagement
A problem often encountered is that roles are filled by multiple
people. As a platform focused on helping people learn, we employ
about 15 people that hold the role “Learning Advisor” (and often a
few others as well). We want those people to work according to a
certain process, to ensure quality and consistency for our
customers. This is hard to express in accountabilities, might be
hard to enforce and and sometimes seems to contradict with selfmanagement.
Part of our Rules of Engagement for how we treat our customers.
To solve the tension of ensuring adherence to a process, we have
evolved the construction where:

Role 1 is accountable for creating and updating certain “Rules
of Engagement” (link points to our General Communication
Rules)

Role 2 is accountable for adhering to those roles, with a link to
the rules in the accountability.

In some cases, Role 1 lives in the super circle of Role 2.
Part of our Rules of Engagement for the many communication tools we use
This creates transparency around those rules and often reasons for
them, without falling back to old-school management where a
Lead Link might naturally set those rules.
ISO certification
To top it off, we recently received our ISO 27001 certification. For
a relatively small company, this might sound daunting. However,
we found it was quite easy to pass the audit. We already have all of
these constructs for documenting and guarding processes in place
and it was simply a matter of adding all the demands from the ISO
27001 certification in our governance records.
We protect the ISO certification with a domain on the governance
records itself that prohibits its change, unless the Security Officer
role agrees. We thereby comply with one of its most important
demands: that certain people (in our case, roles) can limit change
that might impact security.
The ISO auditor, and earlier the consultant who helped us
navigate the ISO process, literally said they were really impressed
with the level of explicitness in our organisation. On any of their
questions we were able to answer “oh, sure, you can find that
there, and a link to it goes here, and then that role is defined
there”, etc.
So, what’s the fun of all this?
To conclude… yeah it does sound pretty regulated huh?! Consider
this:

It makes me as founder very relaxed about things like security,
quality, durability of my business etc, knowing that we have
this covered. I can focus on our purpose.

All changes to these regulations are incremental and iterative
(except when they’re protected by a domain :)), because of
Holacracy’s evolutional governance process. It’s not daunting
at all!

Everybody can influence many of those rules. Again, unless
protected, but then it’s still clear how to change them if needed.
This makes it so much more motivating and not frustrating for
people in the organisation to follow the rules, and not abuse
them in case they don’t fit with reality.
Timmerman, R. (2017). No more Policies, Processes and Rules in self-management with Holacracy?
Retrieved from https://medium.com/@rubzie/no-more-policies-processes-and-rules-in-selfmanagement-with-holacracy-f5e76910a0fe
What is Holacracy
“Forces colliding in the workplace are putting stress on traditional ways of
managing and structuring work”
– Gallup, State of the Workplace Report
Holacracy® is a new way of structuring and running your organization that
replaces the conventional management hierarchy. Instead of operating topdown, power is distributed throughout the organization, giving individuals and
teams more freedom to self-manage, while staying aligned to the
organization’s purpose.
It involves:



A new and evolving organizational structure
Innovative meeting practices designed for rapid execution
A shift in mindset toward greater autonomy and taking action
And much more…
“Holacracy is the first fully formed alternative to Command & Control that real
companies are using successfully”
Adam Pisoni, Co-founder and Former CTO of Yammer, Founder of
Responsive.org
To better understand it, here are a few of Holacracy’s core
features:
Purpose-driven
Holacracy-powered organizations focus on purpose at every level of scale:
Organizational purpose, team purpose, and individual purpose are all explicit
and aligned.
The result: Every team member directs their energies in alignment with the
mission of your organization, unlocking the full potential of your organization.
“That’s what I really love about Holacracy. These are organizations were
everyone can become powerful, everyone can become entrepreneurial, in
service or some larger purpose.”
– Diederick Janse, Energized.org
Responsive
Every individual acts as a “sensor” for the organization and has direct
pathways for processing their challenges and opportunities into organizational
change.
Smaller, incremental decisions replace large-scale re-orgs so your
organization can respond quickly to a shifting environment and develop
business agility.
“”In Holacracy, you see groups making proposals to revise the design of their
group and of the broader organization. They’re making decision that a typical
organization—a hierarchical organization—only make at the management and
senior management level.”
– Mike Lee, Harvard Business School
Explicit “rules of the game”
Holacracy replaces the management hierarchy with an explicit and lightweight
ruleset that sets clear expectations and makes transparent the decisionmaking authority at every level in the organization.
Making the ruleset explicit eliminates the guesswork of how work gets done,
undercuts hidden power dynamics, and create cleaner working relationships.
“The structure allows you the freedom. Much like the structure in the roads…
If it’s an appropriate structure, it allows you to think about other things while
you drive.”
– David Allen, author of Getting Things Done
Transparent roles and responsibilities
Static job descriptions become dynamic roles and responsibilities that are
transparent and evolve as the organization changes. Each team is selforganized by monitoring and adjusting their own structure, nearly real-time, in
alignment with the organization’s purpose.
This clarity scales as the organization grows, streamlining work and
maintaining clear ownership.
“You know, you have an organization with 50 people, we have 300+ roles
now, and still people can just find the right person for something on their first
day. That’s magic.”
– Ruben Timmerman, Springest
Holacracy.org (n.d.). What is Holacracy? Retrieved from https://www.holacracy.org/what-is-holacracy
HOLACRACY AND THE LAW
MATTHEW T. BODIE*
ABSTRACT
No law requires companies to have CEOs, officers, supervisors,
chains of command, or even employees. But traditional managerial
structures are so ingrained in our political economy that legal doctrines
take them for granted. What if they were to disappear? Under holacracy,
a new version of participatory management adopted at companies like
Zappos and Medium, companies are replacing managers, organizational
charts, and subordinates with governance circles, roles, and lead links.
The promise of holacracy is a system of management that devolves
responsibilities to teams, empowers workers to act freely within specified
zones of authority, and energizes the entire organization around an
evolutionary purpose. This Article takes holacracy’s fully imagined
approach and asks how current law would respond. Looking at corporate
law, fiduciary law, labor and employment law, contract law, and criminal
law, the Article breaks down the legal and economic assumptions about
traditional firm hierarchies and then contemplates how we can reconceive
existing law and policy to match the purposes of holacracy and its kin.
Ultimately, holacracy teaches us not only about the possibilities of
participatory governance, but also the extent to which we assume that
hierarchy goes hand-in-hand with business entities.
*
Callis Family Professor, Saint Louis University School of Law. Many thanks to the
participants at the 2017 National Business Law Scholars Conference, the 2017 Fiduciary Law
workshop, and the Minnesota Law Faculty Works in Progress series, including Richard Brooks,
Lynne Dallas, Deborah DeMott, Stephen Galoob, Dan Greenwood, Kristin Hickman, Claire
Hill, Sung Hui Kim, Arthur Laby, Ethan Leib, Brett McDonnell, Brian Quinn, Teddy Rave, Dan
Schwarcz. Natalya Shnitser. and Julian Velasco. Thanks as well to Rebecca Hollander-Blumoff
for additional comments. I am also much obliged to Brian Robertson for taking time to discuss
the basics of holacracy.
619
620
DELAWARE JOURNAL OF CORPORATE LAW
VOL. 42
TABLE OF CONTENTS
INTRODUCTION……………………………….…………………………..……620
I. THE HOLACRACY SYSTEM………..………….………………………623
A. Holacracy as a System of Participatory
Governance………………………………………………..623
B. The Holacracy Approach………………………………….627
1. Constitutional Structure…..………..………………627
2. Governance Purpose……………………………….632
3. Organizational Purpose..…………………………..635
II. HOLACRACY AND ORGANIZATIONAL IDENTITY……………………638
A. The Entity/Aggregate Debate………………………………638
B. Organizational Purpose………..………………………….640
C. Choice of Organizational Form.…………………………..646
III. HOLACRACY AND FIRM MANAGEMENT…………………..………..648
A. The Board of Directors…………………………….………649
B. Officers…………………………………………………….652
IV. HOLACRACY AND WORKPLACE LAW……………………………..656
A. Workers as Employees…………………………………….656
B. Labor-Management Relations……………………………..662
C. Empl …
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