Holacracy is a way to run an organization, but it may be much different than you think it is. In June 2015, InfoQ published “Holacracy Approach for an Agile Organization”, in which Brian Robertson, partner at HolacracyOne, explained that holacracy offers a complete system for achieving agility in all aspects of an organization.
The term holacracy is derived from the Greek word holon, which means a whole that’s part of a greater whole. Instead of a top-down hierarchy, there’s a flatter “holarchy” that distributes power more evenly.
Holacracy removes power from a management hierarchy and distributes it across teams that have clear sets of roles, responsibilities, and expectations. Instead of being assigned to a particular job position or description, employees are defined by the work they do. These roles are constantly updated and employees fill several roles.
This new organizational system with no managers or titles is often misunderstood. To clarify how it works, here is a look at Voys, a Dutch telecom company that implemented this new way of running organizations.
The Dutch telecom market has one of the most progressive broadband sectors in the world, with effective cross-platform competition further stimulated by numerous fiber deployments. The telecom market is a traditional world but telephony in the 21st century has to be more flexible, more scalable, and cheaper than traditional telecom solutions.
In 2005, four young men were playing around with technology at TNO (a leading Dutch research institute) while working on their final project. To become more reachable, they unknowingly developed one of the first online PBXs in 2005. In 2006, one of these men, Mark Vletter, began to develop this project into a business. The resulting company, Voys, was born in Groningen, in the north of the Netherlands, with the dream of revolutionizing the telecom market for businesses.
The company currently employs about 70 people (and growing). Mark Vletter’s roles include activator (coaching others in setting thoughts into measurable actions), product owner, and preacher (spreading the word about the Voys Model: a stack of tools and methods for working in a self-organizational way, including holacracy).
In December 2015, Mark Vletter renounced his role as lead link and passed it to Jorg Vletter. Lead link is the most important role in the organization. This step makes Voys the first company in the world where the owner and founder is not the lead link of a holacracy-driven organization.
Voys used a no-management paradigm for several years before Voys introduced holacracy. The team was clear about the path to follow: believing in each person on the team, allowing freedom within roles, and letting employees fuel the development of the best telecom provider in the market.
Holacracy allows Voys and its business processes to develop and validate much faster. According to Voys, you have the build, measure, learn cycle for developers in lean — holacracy enables the same process for the whole company. There is always an opportunity to learn and improve.
There are other proven scaling models at the moment but the holacracy model seems to work for Voys. It brings the company accountability, entrepreneurship, and faster evolution. Every company is seeking that sort of work environment. InfoQ interviewed Jorg Vletter about it.
InfoQ: What was the previous organizational model at Voys and why did Voys choose holacracy?
Jorg Vletter: Before implementing holacracy, we used our own organizational model, which we named the Voys Model. The Voys Model is an organizational model without managers and without functions (or job descriptions). Instead of management, every colleague has a lot of freedom and accountability. We believe this is the only way to ensure that people progress and develop themselves. As a result, they will perform optimally and contribute to the goals of the organization. This makes them happy and happy employees lead to happy customers.
In 2015, we added holacracy to the Voys Model because we were looking to improve our organizational model (after holding a survey amongst colleagues) on the following topics:
- Be clearer about who is accountable for what.
- We wanted to work more purposefully driven.
- We had an urge to give each other more feedback. After all, there is no manager doing it for you.
- Holacracy seemed like a natural addition to solve these issues whilst keeping our own Voys Model. It also made the overall organizational model scalable and future-proof.
InfoQ: How are the original principles of Voys reflected in the current organizational model?
Vletter: First of all, there is a difference between holacracy and our Voys Model. Holacracy organizes the “work” within our organization. It is the manual for the game that we play. Holacracy ensures that accountabilities and purposes are clear to everyone. The Voys Model is the way we act, work, and roll. Our original principles of “no management” and “no job descriptions” are still reflected in our holacracy model. We want to change the world and change telecommunications. “Freedom is calling” is the credo and to make this possible we have the following values that haven't changed since implementing holacracy:
We are open and transparent. Contact is personal and based on equality. We provide excellent support. Change is part of the company. Personal growth is the goal.
InfoQ: What demonstrates that the holacracy model delivers what is expected? The hypothesis is that holacracy delivers something to Voys. Experiments require a critical approach that tests the model. How does Voys tackle this and what are the results or insights?
Vletter: We chose to implement holacracy to solve issues within our own model. But choosing holacracy was not a choice made for life. It felt like a next step and we haven’t seen a better proven organizational operational system that would do the trick. But like in everything we do, we stay critical. It’s not an easy system to implement because of the many rules. However, we decided to take it as a whole. We didn’t want to create a new system. We chose to adopt a proven one.
And the results are there. We mainly notice that holacracy has brought us more clarity. It gives a better sense of equality, because everybody can process his or her tensions through different pathways. So everyone can work in the organization (the operations) and on the organization (governance), which is a distinguishing principle of holacracy.
Learning to play the game is something we try to tackle by bringing our colleagues on board as much as we can. We try to show everyone the importance of being part of our holacracy system and the advantages of sticking to the process. We think it is very important that everyone is aware of the purpose of the organization and we encourage everyone to be entrepreneurial in their roles to optimally contribute to that purpose.
When we sit down with our colleagues to evaluate, we notice that everybody sees the advantages of this organizational model. Sometimes people are a bit thrown off by all the rules of holacracy and the sometimes almost bureaucratic way of writing everything down. But when people point out the great advantages to each other, everybody knows why we work this way.
InfoQ: Agile scaling frameworks LeSS and SAFe have a history in Nokia. Voys is also part of the telecommunications sector but chose holacracy. What problems do you solve? What alternatives dis you consider?
Vletter: When we chose holacracy, there were no better options so we did not consider any alternatives. During just a quick scan, we learned that holacracy solved the issues we were facing the most; mainly, the always-arising question “who or which role is accountable for what” was solved by implementing holacracy. This is now clarified and has been made explicit by the use of software (GlassFrog, but holaSpirit is also an option) that gives us an overview of the organizational circle and role structure.
Because holacracy seemed to be the answer to our questions, we did not actively consider any other systems or alternatives. Many of us already used Getting Things Done (GTD) in their work. Holacracy is based on GTD, especially made for teams. That is why we all read the book Getting Teams Done.
InfoQ: Do you think your organization model could work for established, large companies?
Vletter: Absolutely. Saying it can’t be done because of company size is a bad excuse. I believe no matter the size of your company, the type of work, or the age of your colleagues, it could work. It just brings different challenges then we have experienced.
From the start, we have been organized differently. For large companies, it would be easiest to start over from scratch, which isn't a realistic option. So start small. Create a bubble within your organization and start learning the use of holacracy within this bubble. Then “build, measure, and learn” and extend it step by step, team by team throughout the rest of the organization.
InfoQ: Companies want teams to focus on the same company goals and not work against each other. Who ultimately determines the priority and the company goals? Is this the lead link?
Vletter: First off, traditional teams do not exist within holacracy. The organizational structure within holacracy is formed by a series of circles, which have real and full autonomy and authority — much like cells within organs within organisms. Every circle has its lead link. One of the accountabilities of a lead link is “establishing priorities and strategies for the circle”. So a lead link may define for the circle a more general strategy or multiple strategies, which are guidelines that guide the circle’s roles in self-identifying priorities on an ongoing basis. At Voys, we have a more democratic approach; we just started to explore the use of strategic sessions to set goals and strategies for each circle and in the end for the company.
Our present circle structure is:
InfoQ: How often is a lead link replaced? Who determines that the lead link no longer functions properly? Who makes the tough choices in tough times? How does holacracy make decisions without managers and use the employees’ power within Voys?
Vletter: When implementing holacracy, the CEO of the company is the one who signs the Holacracy Constitution and is most likely to become the lead link of the main circle. We did it this way at Voys, so my colleague Mark Vletter signed the constitution.
The lead-link role is still a role within the total system so when we looked at the role fit, we concluded that Mark wasn’t the best fit for this role based on his strengths and the phase of the company (from pioneer to growth phase). So he handed over his role of lead link to me at the end of last year.
As the lead link of the main circle, I’m now, among other things, accountable for assigning roles within this circle. Every sub-circle has one role in the main circle — this is the lead-link role of this sub-circle. As the lead link of the main circle, I assign the lead-link roles for the sub-circles.
Everyone and every role make tough choices because everybody is a leader and entrepreneur within their role. Therefore, everybody has the autonomy and authority to make decisions.
Just to be clear and also to emphasize the difference between a manager and the role of a lead link: a lead link is not a decision maker, a people manager, a boss, or manager. He or she just creates conditions and removes any constraints to allow roles within the circle to be entrepreneurial and get the work done to achieve the purpose of the circle. In my opinion, this is also the difficult part of fulfilling a lead-link role. You have to be very conscious about your accountabilities and understand that this role does not do any operational work. However, the person that has the lead-link role can do operational work when he has multiple roles. I'm noticing that other colleagues sometimes misinterpret my lead-link role and come to me for decision making.
InfoQ: The lead link judges whether still fits the job. You are a lead link. On what basis do you determine that a role is not carried out properly? What then happens?
Vletter: As a lead link, I am accountable for “assigning partners to the circle’s roles, monitoring the fit, offering feedback to enhance fit, and re-assigning roles to other partners when useful for enhancing fit”.
As for monitoring role fit, it is not the question of whether or not somebody is carrying out his or her role properly. It's more a question of whether or not the person assigned to that role is working towards achieving the role’s purpose and is contributing to achieving the purpose of the circle. To enhance the role fit, colleagues (and the lead link) give feedback, process tensions, and have governance meetings.
If I think the purpose can be better achieved by someone one else, I can re-assign roles. At Voys, we also have a policy about inadequate performance and we have roles that have accountabilities in this process.
InfoQ: The Holacracy How It Works page states, “For example, in football you know to pass to the striker not because you’re friends with him, but because he’s in the best position to score. Even if you’re mad at the person playing the striker position, you’ll still pass the ball to that role because the strategy of the game suggests that you should.”
In a group, there are always people who play for their own safety, status, and whatever else. The company's well-being is not at all at the top of the list. How do you ensure that people continuously go for collaboration instead of going for personal gain?
Vletter: This is a cultural thing. Our organization is based on equality and fairness. Our values aren’t made up. It’s just in our DNA. Our organizational model is not a system or model based on ego, it’s rather an ecosystem (distributed, adaptive, open socio-technical).
InfoQ: The bigger the organization, the more diverse the people and personalities are. This often leads to an undercurrent that affects an organization. Some teams or individuals have more power (formal, expert, or informal) within an organization than others. This can cause issues as some employees might feel that they have no say, that they’re not heard, or even that they’re not valued. How does Voys deal with such a shadow power network?
Vletter: We try to keep an open culture where everybody can have a say and all are able to process their tensions. To facilitate this, we do a lot of things. Every month, we organize a pizza session where we talk about what we are working on, what’s occupying our minds, and great results. We use TINYpulse to improve retention, recognition, and employee engagement. This Web-based software actively asks our colleagues how happy they are, what struggles they are facing, and what opportunities they see for our company. It also asks us to give cheers (compliments) to colleagues that have performed very well.
We started with epic meets, where we get together on a Saturday and spend time brainstorming and hope to come up with a next step in some matters. We have built our own feedback tool, use Grid360, etc. There will always be some kind of shadow network, but you just have to turn on the light.
InfoQ: Teams are self-organized: they’re given a purpose but decide internally how to best reach it. Everyone should agree on the purpose and stick to it. How do you ensure that everyone has the right goals in mind? Who determines the purpose of a team at Voys?
Vletter: At Voys, we don’t give circles a purpose. When we started with holacracy, each circle set its own purpose. Within holacracy, the purpose of a sub-circle is set by its broader circle. But like everything else in holacracy, the purpose of a role or circle is subject to change and can evolve by processing tensions.
For example, the purpose of the Customer Happiness circle was something like “happy customers”. But at some point, a colleague proposed to change it through governance to the purpose as it is today: “a culture of happiness and independence for clients and colleagues”.
I notice that most of the time circles talk about what their purpose should be and will process this in the broader circle. This provides a sense of team spirit, but the key thing here is that not everyone has to agree with it. It has to be suitable. It’s then up to each role and person to try to reach the purpose. Metrics help a circle to measure its progress. For example, when our Sales circle discusses the weekly metrics in a tactical meeting, everyone sees what percentage of the offers has been signed and how many new customers we connected to our platform. This ensures that everyone has a good sense of our progress.
InfoQ: How does the organization deal with internal criticism or primary conflicts? What happens in a community without managers when someone isn’t doing his or her part?
Vletter: We are open to criticism. But we have a policy and roles that have accountabilities within this process to help us to resolve cases of conflict or inadequate performance.
In short, it starts with giving feedback as colleagues. Then you can hold someone accountable for his or her role. And you can create more clarity about expectations through governance. If all of this has no effect, there is a role to turn to help with this sort of value issue.
InfoQ: The purpose of a performance review is to help employees perform better but research shows that performance reviews do not lead to performance improvement and do not motivate employees. Why did you decide to have performance reviews and who is involved in this process? How does Voys do them and how does it work out for the company?
Vletter: At Voys, everybody does his own performance review at the end of the year. In your own performance-review document, you indicate whether you think you’ve functioned insufficiently, moderately, well, very well, or excellently on different topics like work (knowledge and skills), internal collaboration (colleagues, projects, and organization), and external collaboration (customers, profiling, etc.).
You discuss your performance review with two colleagues, who will help you not in a judgmental but in a truth-finding way. One colleague fulfills the “first reviewer” role, accountable for reflecting, and the other one has the role of second reviewer, accountable for facilitating and making sure it meets our idea of a fair and in-depth performance review.
We have been playing around with our method for almost 10 years, and last year (thanks to holacracy and other changes), we noticed that there are issues regarding the performance review we want solved. For example, the performance document does not match the holacracy role system. And we are a high-performance organization, and the performance reviews lead to a large salary increase, which is not healthy for the company and colleagues in the long run. We need to change the performance form, but we might need to change the salary system as well.
We wrote a mini blog about our 2015 performance reviews and the challenges we are facing at this point at: https://www.voys.nl/weblog/performance-reviews-2015-edition
InfoQ: You participated in the recent Certified Holacracy Practitioner training in Amsterdam in February 2016. Could you address some new challenges or some insights regarding to your training?
Vletter: Overall it was great to go through the basics again after playing the game for almost a year. There were a lot of subtleties that gave me a deeper look into the system. During the week, I experienced the potential of holacracy and it confirmed for me two things: we chose the right organizational operating system and we still have long road ahead, because it’s not an easy system to adopt.
Looking at Voys and my role as holacracy coach, I hope we can create more role awareness and shake off the fear that holacracy and its rigid process will damage our tribal space (the relationships between colleagues, our culture, etc.). And we will further develop our onboarding process concerning holacracy by setting up different in-house practices. The first one will be facilitator training because we can benefit a lot from great facilitator-ship. Besides this, there are a lot of ideas about evolving to the next level in holacracy maturity.
Want to know more? Check out the big Voys manual (2014 version, 2016 version is coming soon).
About the Interviewer
Yanto Hesseling (@YantoHesseling) is an agile quality consultant and coach for agile teams. He is the founder of AgileHubNoord, an agile community based in the north of the Netherlands, with the goal of changing this region for the better. Yanto is very interested in methods and practices inside and outside software development that make people happy. And like many Dutch, he says things as they are.
About the Interviewee
Jorg Vletter fulfills the roles of lead link and holacracy coach within Voys, a business-telephone service provider based in the north of the Netherlands. Voys believes telecoms can and should be different and offer maximum flexibility and control over the telephony solution: no contracts, no strings attached. Jorg loves adventure, challenges, and looking for ways to improve people and organizations. His personal why is “expand your playground.”
