2007-today: Holacracy

admin · September 3, 2025, 5:46pm

Holacracy, a system that replaces managers with strict processes and roles, promised autonomy but often created new bureaucracies. Its mixed results at companies like Zappos and Medium show that while it can boost transparency and speed, its impersonal nature and complexity are not for everyone.

This article was written by Claude based on a deep research report from Gemini and then lightly edited by the administrator. Inaccuracies may exist.

The Holacracy Experiment: What Happens When You Try to Kill the Boss

A thorough analysis into the Most Ambitious Attempt to Reinvent How Organizations Work

Picture this: You walk into your office tomorrow and discover that your boss has been fired. Not just your boss, but every boss in the company. The org chart has been tossed in the shredder, job descriptions have vanished, and instead of reporting to a manager, you now report to… a process. Welcome to Holacracy, the most radical experiment in organizational design since someone first decided that having a CEO might be a good idea.

If this sounds either thrilling or terrifying, you’re not alone. Companies like Zappos and Medium bet millions of dollars and years of their lives on this vision of a “bossless” future. The results? Well, let’s just say it’s complicated.

The Problem with Having a Boss (And Why Someone Decided to Fix It)

Traditional corporate hierarchies are basically feudalism with better coffee. They made perfect sense during the Industrial Revolution, when workers were expected to show up, follow orders, and not think too hard about whether there might be a better way to make widgets. The pyramid structure—with a few powerful people at the top issuing commands down through layers of middle management—was designed for predictability and control.

But something funny happened on the way to the 21st century: the world got complicated. Markets started changing faster than quarterly planning cycles. Innovation became more valuable than obedience. Knowledge workers started doing jobs that required creativity and independent thinking—exactly the kinds of things that rigid hierarchies tend to crush under layers of approval processes and bureaucratic bottlenecks.

This is where Brian Robertson enters our story. A computer programmer with no formal training in organizational psychology, Robertson was running a software company called Ternary Software in the early 2000s when he became obsessed with what he called the “co-dependent, parent-child dynamic” of traditional workplaces. He wasn’t content to just complain about it over lunch—he wanted to engineer a solution.

Enter Holacracy: Anarchy with Rules

The name “Holacracy” comes from Arthur Koestler’s concept of a “holarchy”—a system where each part is simultaneously a complete whole and a component of something larger. Think Russian nesting dolls, but for organizational structure. Robertson took this philosophical concept and turned it into something much more concrete: a codified “operating system” for running companies.

The central paradox of Holacracy is captured in Robertson’s favorite phrase: “no rulers, but not without rules.” Instead of getting rid of structure entirely (which would be actual anarchy), Holacracy replaces human authority with process authority. Your boss can’t tell you what to do anymore, but the Holacracy Constitution—a legal-style document that reads like a cross between corporate bylaws and a Dungeons & Dragons rulebook—certainly can.

This isn’t some touchy-feely management philosophy about “empowerment” and “synergy.” Holacracy is more like installing a new operating system on your company’s computer. It comes with specific meeting formats, decision-making processes, and governance structures that are meant to be followed with the precision of a software program.

How It Actually Works (Or Is Supposed To)

The basic building blocks of Holacracy are “roles” and “circles.” Instead of having a job description, you have one or more roles—fluid, purpose-driven entities that can be created, modified, or eliminated as needs change. These roles are organized into circles, which are self-managing teams with their own specific purposes.

Here’s where it gets interesting: circles are nested inside other circles, creating that holarchy structure. Each circle connects to its broader circle through two specific roles—a “Lead Link” (assigned from above to set strategy) and a “Rep Link” (elected from below to represent the circle’s interests). It’s like a constitutional democracy, if constitutional democracies had to hold structured meetings every week to function.

Speaking of meetings, Holacracy has very specific ideas about how they should work. There are two main types:

Tactical Meetings are for addressing immediate operational issues, or what Holacracy calls “tensions.” These follow a rigid format designed to move quickly from problem identification to “minimally sufficient next steps.” The goal is speed and action, not consensus or lengthy discussion. If you’re the type of person who enjoys exploring every possible angle of a problem in a meeting, Holacracy was not designed for you.

Governance Meetings are for structural changes—creating new roles, modifying existing ones, or updating policies. These use a process called Integrative Decision-Making (IDM), which explicitly rejects consensus in favor of something more surgical. Someone presents a proposal, the group asks clarifying questions, shares reactions, and then looks for objections. If no one can raise a valid objection (defined as a reason the proposal would cause harm), it passes. Your personal preference doesn’t count as an objection—only actual, role-based concerns.

The meetings are deliberately “impersonal.” Facilitators are trained to “ruthlessly crush” off-topic discussions and focus solely on the organizational tensions, not the personal feelings of the people in the room. It’s governance by algorithm, with humans as the input devices.

The Promise: Freedom, Speed, and Transparency

When it works, Holacracy’s advocates say it’s transformative. Employees report higher levels of autonomy and engagement. Decision-making becomes faster because people don’t need to climb the management hierarchy for approval. The system’s transparency means everyone knows what everyone else is supposed to be doing, eliminating the political maneuvering and hidden power dynamics that plague traditional organizations.

Some studies suggest impressive results: 20% faster time-to-market for new products, 30% increases in employee engagement, and significant reductions in what researchers call “illegitimate tasks”—the busywork that has nothing to do with your actual job but gets dumped on you anyway because, well, hierarchy.

The system seems particularly appealing for knowledge workers who are comfortable with high levels of autonomy and responsibility. For people who’ve always chafed under micromanagement or felt frustrated by bureaucratic red tape, Holacracy can feel like liberation.

The Reality: When Theory Meets Human Nature

But then there’s the other side of the story, and it’s not pretty.

Medium’s Retreat: In 2016, after three years of experimentation, the digital publishing platform Medium abandoned Holacracy. The official reason? The system was “problematic for larger initiatives, which require coordination across functions.” Translation: when you need different parts of the organization to work together on complex projects, having everyone focused on their individual roles within their specific circles can actually make collaboration harder, not easier.

Zappos’s Painful Journey: The poster child for Holacracy’s challenges is Zappos, the online shoe retailer that became the largest company to attempt a full implementation. CEO Tony Hsieh was so committed to the transformation that he offered generous severance packages to any employee who didn’t want to make the transition. The result? Eighteen percent of the workforce—over 250 people—took the money and left. The company also fell off Fortune’s “Best Places to Work” list, where it had been a regular fixture.

The human cost of these transitions reveals something important about Holacracy’s design assumptions. The system works beautifully if you’re the kind of person who thrives with high autonomy, enjoys following detailed processes, and can separate your emotional needs from your work roles. But many people, it turns out, actually want the security and guidance that comes with having a traditional manager. They find the absence of clear authority figures disorienting rather than liberating.

The Psychological Price of Process-Based Authority

Perhaps the most underestimated challenge of Holacracy is psychological. The system asks people to think of themselves not as whole humans with complex motivations and feelings, but as role-holders with specific accountabilities. Your personal preferences, your need for validation, your desire to be liked—none of these matter in a Governance Meeting. Only the needs of your role matter.

For some people, this is incredibly freeing. They can focus on the work without worrying about office politics or managing up. For others, it’s alienating and exhausting. The “impersonal” nature of Holacratic processes can leave people feeling like cogs in a very different kind of machine—one that’s supposedly more humane but can feel just as dehumanizing as the traditional hierarchy it replaced.

Research suggests that personality traits play a significant role in how well people adapt to Holacratic environments. People high in neuroticism, for example, may struggle with the reduced structure and unclear social hierarchies. The system assumes that everyone wants maximum autonomy, but autonomy is actually quite stressful for people who prefer clear guidance and social support from managers.

The Complexity Paradox: More Rules, Not Fewer

One of Holacracy’s most ironic features is that a system designed to increase organizational agility can actually create new forms of bureaucracy. The Holacracy Constitution is dozens of pages long and defines everything from meeting formats to role assignment processes with legal-style precision. Learning to operate within this system requires extensive training and constant vigilance to follow the correct procedures.

Critics argue that organizations can become so focused on “doing Holacracy correctly” that they lose sight of their actual business objectives. Instead of spending time on innovation, strategy, or customer service, teams find themselves absorbed in an endless series of tactical and governance meetings, constantly reorganizing their role structures and updating their circle purposes.

The system that was supposed to eliminate bureaucracy can become bureaucratic in new and unexpected ways. Instead of asking your manager for permission, you might find yourself spending hours in meetings trying to create the right role structure to accomplish the same thing.

What Holacracy Gets Right (And Why It Matters)

Despite these challenges, dismissing Holacracy entirely would be a mistake. The experiment has revealed some powerful insights about how organizations can evolve beyond traditional hierarchies.

The Power of Explicit Rules: Traditional organizations are full of unwritten rules and hidden power structures. Who really makes decisions? How do you get things done? What are the actual priorities? Holacracy’s obsession with making everything explicit eliminates this ambiguity. Even when the rules are complex, at least everyone knows what they are.

Distributed Decision-Making: The principle that people should be able to make decisions within their domain of expertise, without seeking approval from a manager, is profoundly valuable. Many organizations could benefit from pushing decision-making authority down to the people who actually do the work, even if they don’t adopt Holacracy’s specific mechanisms for doing so.

Process Innovation: The Integrative Decision-Making process, despite its formal structure, offers a genuine alternative to both autocratic decision-making and endless consensus-seeking. The focus on integrating valid objections rather than reaching agreement is a significant innovation in group decision-making.

Role-Based Thinking: The concept of fluid, purpose-driven roles rather than static job descriptions provides a framework for organizational agility that many companies desperately need. Even if you don’t implement Holacracy, thinking about work in terms of evolving roles rather than fixed positions can help organizations adapt more quickly to changing circumstances.

The “Managerless” Myth

Perhaps Holacracy’s most important lesson is that truly “managerless” organizations don’t actually exist. Holacracy doesn’t eliminate management functions—it distributes them across roles and processes. Someone still needs to set strategy (the Lead Link), facilitate meetings (the Facilitator), and ensure accountability (various circle roles). The work of management gets done; it just gets done differently.

This insight is crucial for any organization thinking about flattening hierarchies or eliminating middle management. You can’t simply remove managers and expect their functions to disappear. You need to deliberately design systems and processes to handle coordination, decision-making, and accountability. Otherwise, you don’t get empowerment—you get chaos.

Lessons for the Rest of Us

Most organizations will never implement full Holacracy, nor should they. But the experiment offers valuable lessons for anyone thinking about how to make organizations more agile, transparent, and human.

Start with Principles, Not Systems: Rather than adopting Holacracy wholesale, organizations might benefit from implementing specific principles: clearer role definitions, more distributed decision-making authority, more explicit governance processes, or better meeting structures.

Understand Your Culture: Holacracy works best in organizations with strong existing cultures and high levels of trust. If your organization struggles with basic collaboration or communication, adding process complexity is unlikely to help.

Consider the Human Element: Any organizational change needs to account for the psychological and social needs of actual humans. Some people thrive with high autonomy; others prefer more structure and guidance. The best systems accommodate both types rather than assuming one approach fits everyone.

Invest in the Transition: Organizations that successfully implement major structural changes invest heavily in training, communication, and support systems. The transition to any new organizational model is inherently disruptive and requires sustained commitment from leadership.

The Future of Organizational Design

Holacracy represents one extreme point in the ongoing evolution of organizational design—a pure experiment in replacing human authority with algorithmic governance. While most organizations won’t go this far, the experiment has pushed the conversation beyond simple questions of hierarchy versus chaos.

The real future probably lies in hybrid approaches that combine the best insights from Holacracy with more traditional human-centered management practices. Organizations need better decision-making processes, clearer role definitions, and more distributed authority. But they also need to maintain the human connections, cultural coherence, and adaptive leadership that traditional management, at its best, provides.

The companies that will thrive in the coming decades are those that can maintain human judgment and wisdom while eliminating the bureaucratic bottlenecks and hidden politics that make traditional hierarchies so frustrating. They’ll need to be more systematic than traditional organizations, but more human than Holacracy.

Conclusion: The Experiment Continues

Holacracy may not have solved the problem of organizational design, but it has advanced the conversation in important ways. By creating a complete alternative to traditional hierarchy and testing it in real organizations with real consequences, Robertson and his followers have gathered invaluable data about what works, what doesn’t, and why.

The high-profile failures at Medium and the painful transitions at Zappos are not signs that the experiment was worthless—they’re evidence that organizational change is harder than anyone imagines. They remind us that there are no silver bullets in management, no perfect systems that solve all problems without creating new ones.

But the successes are equally instructive. Organizations that have found ways to distribute authority, clarify roles, and speed up decision-making have gained significant competitive advantages. The specific mechanisms of Holacracy may not be right for every organization, but the underlying challenges it addresses are universal.

The future of work will likely be more distributed, more transparent, and more process-driven than the past. Holacracy has shown us both the promise and the perils of that future. The organizations that thrive will be those that learn from both the successes and the failures, creating systems that harness the power of distributed authority while remaining fundamentally human places to work.

The boss may not be dead yet, but Holacracy has certainly given us a compelling vision of what might replace them. Whether that future looks appealing or terrifying probably depends on what kind of person you are—and that, perhaps, is the most human lesson of all.

Topic	Replies	Views
1967: Holarchy (Arthur Koestler) Digital Dossiers subj-model , type:intel	16	September 9, 2025
1970: The Tyranny of Structurelessness (Jo Freeman) Digital Dossiers type:intel , subj-book	5	June 25, 2025
1851-today: Sociocracy Digital Dossiers type:intel , subj-movement	6	June 21, 2025
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2014: Teal Organizations Digital Dossiers type:intel , subj-movement	9	September 8, 2025