4 Holacracy Misses

For the past eight months, we’ve been implementing Holacracy. I think it’s great, and we’re going to continue using it at UC. Last week, I posted four great things about Holacracy. Today, I offer four things I could do without.

1. Confusing Word Choices

Having a shared pattern language for describing the organization is crucially important. But the language provided by Holacracy is hard to use. A sample:

  • “Tension” is a word that, in business contexts, leads people to think about issues instead of opportunities. Why not “Data”, “Opportunity”, or “Issue”?
  • “Circle” has some nice meaning and history, but it’s a head-scratcher for most: why not just say, “Team”?
  • Calling a “Governance” meeting guides people to think in legal, anti-human terms; we end up proposing changes to our organization like shitty lawyers with no experience writing policy, tossing “shall” and “whereas” around like we own the joint.
  • And for what it’s worth, “Lead Link” and “Rep Link” are almost always accompanied by air quotes. Why not “Leader” and “Representative”?

Word choice is important. To play the game, you have to understand the terminology. And many of the words included in the system reinforce bad behavior.

What to do: Re-think every defined term in the system with a user-focused lens.

2. The Constitution

It’s too long, mostly because it’s written in a dense, unapproachable style that comes from its intended use: to be adopted as an addition to the operating agreement of a company. The length and density of the content effectively makes Holacracy a product for org-design masters, and limits its applicability at the edge of an organization. If you can’t commit the rules of the game to memory, it’s going to be hard for the game to spread.

For example, here’s a core concept of the system, as expressed in the constitution:

4.2.2 Requests for Processing. Each Circle Member of a Circle shall engage in any processing required under Section 1.2 promptly upon a request made by a fellow Circle Member to so process a specified Accountability or Project. To the extent the Circle Member receiving such a request has no Next-Actions tracked with respect to the specific Accountability or Project so requested for processing, such Circle Member shall continue processing until such a Next-Action is identified and captured, unless such Circle Member can instead reference (a) a specific Next-Action or Project explicitly captured and tracked by another Role that must be completed before any further Next-Actions are reasonably appropriate to enact the Accountability or advance the Project so requested for processing, or (b) a specific event or trigger condition beyond the reasonable influence of such Circle Member that must happen before any further Next-Actions will be reasonably able to enact the Accountability or advance the Project so requested for processing. In any case, a Circle Member so processing upon request shall inform such requester of the results of such processing.

Here’s a minimally lossy version of that: “When a teammate asks you to process an Accountability that you hold, we expect you to consider writing down an action associated with that Accountability.”

I’ll grant you that many games have long, extensive rulesets – the NBA’s rules are hella long, for example – and I’ll also allow that rules are crucial to the functioning of the system. I’d just say that the constitution as written impedes the adoption of Holacracy.

What to do: Radically simplify the constitution. Write it for people, not for wonks.

3. Dogma

Just to take the first bit from Dogma from Wikipedia: “Dogma is a principle or set of principles laid down by an authority as incontrovertibly true. It serves as part of the primary basis of an ideology, nationalism or belief system, and it cannot be changed or discarded without affecting the very system’s paradigm, or the ideology itself.”

I think of dogma inside the Holacracy system in a couple of ways.

First: it’s an all-or-nothing proposition. As we were getting trained up on the system, it’s clear that there is a “right way” and a wrong way. A pretty good portion of the final day of the training was devoted to a discussion on the incontrovertibility of the system; to practice a bit of Holacracy was to fail at it.

Second: there’s a single, central source of knowledge. Local derivations of the practice (“house rules”) can be built into local constitutions, but there’s no clear process for incorporating those adaptations into the broader system. True, there’s a community of practice, but it’s a paid forum – hardly the type of open, branch-edit-commit communication norms that one would expect at the leading edge of a movement. And yes, all companies using the system could open up their Glassfrog accounts (make them public), but the secret sauce isn’t the record of governance, it’s what worked and didn’t. It’s the flexing of the constitution. It’s the house rules. Because the structure can change so quickly, the stuff that doesn’t work is as important as the stuff that does.

What to do: Accept that there is a massive amount of variation possible in the system, and that this has historically been a good thing. Encourage users to try new ways of operating, and see what emerges.

Which brings me to the next point.

4. Closed Source

This is the big one for me.

For better or worse, I expect the systems around me to be tended by an open-source community. The blog you’re reading this on started in 2006, originally hosted on version 2.0 of WordPress. WordPress has seen 17 major releases since then. The open-source community behind WordPress has made it an undeniably powerful tool that will be around long after Squarespace, Tumblr and Typepad are dead (much love).

Holacracy, by contrast, is closed-source: its constitution is released under the Attribution, Non-Commercial, No Derivatives Creative Commons license, which effectively prevents me from publishing my own updates to it – even if I don’t sell those updates. This is a major, always-in-the-back-of-my-head disincentive against using the system, but broadly means that the system isn’t able to be moved forward by the community. Instead, we rely on HolacracyOne’s founder, Brian Robertson to “[Draft] successive versions of the Holacracy Constitution to concretize and formalize effective patterns and core best-practices that have emerged in the practice and application of Holacracy.”

I can’t handle the idea that the core system that undergirds Undercurrent’s business will be updated when its editor has the time. To wit: at the training, the projection that I got for the next release was in the next two years. That’s too slow, in a world where Oculus Rift can go from Kickstarter campaign to functional hardware to $2bn exit in the same amount of time.

What to do: Put the constitution on Github. Let it free. Kill the licensing program and get really good at making software to support the practice.

Accountants & Retail Employees, Look Out


There will still be jobs. Even Mr Frey and Mr Osborne, whose research speaks of 47% of job categories being open to automation within two decades, accept that some jobs—especially those currently associated with high levels of education and high wages—will survive (see table). Tyler Cowen, an economist at George Mason University and a much-read blogger, writes in his most recent book, “Average is Over”, that rich economies seem to be bifurcating into a small group of workers with skills highly complementary with machine intelligence, for whom he has high hopes, and the rest, for whom not so much.

I refer to this a lot. Worth keeping handy.

Also, here’s the original research. Start on page 57 for a full breakdown of every job you can think of and its “likelihood of computerization.” The researchers used three computerization bottlenecks, each of which is broken down into constituent parts:

Perception and Manipulation

  1. Finger Dexterity: The ability to make precisely coordinated movements of the fingers of one or both hands to grasp, manipulate, or assemble very small objects.
  2. Manual Dexterity: The ability to quickly move your hand, your hand together with your arm, or your two hands to grasp, manipulate, or assemble objects.
  3. Cramped Work Space, Awkward Positions: How often does this job require working in cramped work spaces that requires getting into awkward positions?

Creative Intelligence

  1. Originality: The ability to come up with unusual or clever ideas about a given topic or situation, or to develop creative ways to solve a problem.
  2. Fine Arts: Knowledge of theory and techniques required to compose, produce, and perform works of music, dance, visual arts, drama, and sculpture.

Social Intelligence

  1. Social Perceptiveness: Being aware of others’ reactions and understanding why they react as they do.
  2. Negotiation: Bringing others together and trying to reconcile differences.
  3. Persuasion: Persuading others to change their minds or behavior.
  4. Assisting and Caring for Others: Providing personal assistance, medical attention, emotional support, or other personal care to others such as coworkers, customers, or patients.

Generally, if you have more checkmarks in each of the three bottlenecks, your job is less likely to be computerized.

What Is To Be Done

This series of posts by John Hagel is important. If you don’t have time to read it:

We need to understand what we’re passionate about, and design ways to connect our purpose with our profession.

John uses the word passion, which is nice…but I think just a bit incorrect. Passion and purpose being intimately connected, but at least for me – not sure if this is true broadly – passion changes frequently. I’m passionate about aviation. Then I’m passionate about bread. Then cycling. And while my purpose can and does change with time, it moves more slowly. And when it changes, my profession should change, too.

Most large, public organizations exist to provide consistent shareholder value. Most small-to-midsize organizations exist to glorify the needs of one or more founders. This has to change, and “digital” will push us toward this future organically. (I believe the consumerization of advanced technologies make it easier for more companies to become more successful, which means that organizations can be smaller, more focused, and more true to purpose.)

We need to invent new institutional structures that foster, rather than crush, purpose and passion within their constituents.

From workspace design and tools, to incentives, to resource allocation, to attitudes around transparency, risk, contracts, and partnership, we need to build new corporate structures that allow workers to work toward the purpose of the individual and the organization.

Go to a corporate HQ in NYC. Ride the elevators. See the views get better and the per-capita work grow with each higher floor. Listen to people talk about their work. Folks aren’t working toward their true purpose; instead, they’re living as cogs in a machine. Talk to HR about job descriptions, and then wonder why the best and brightest young makers are bleeding out to startups with compelling purposes and flexible ways of working. And that’s just for corporate folks at the center of the organization. What about the lives of the people in the factories, the folks at the retail counters, the line cooks, the outside sales managers, the customer service reps? The people that hate their bosses but are working for a promotion, just so they can head off to the next thing?

When every business becomes a consumer (they’re using consumer tools), and every consumer becomes a business (they’re selling stuff), we’ll all be forced to confront the fact that the way we spend nearly 50% of our waking lives just doesn’t make sense anymore, because we can make a bigger purpose-driven impact all by our lonesome.

We change agents need to craft a global narrative that pulls the “Future of Work” mission forward.

This is a revolution. It’s not going to be easy. It’s probably going to get worse before it gets better. But it needs a name, it needs a face, it needs organization, it needs structure.

Join in.

How Spotify Ships

how spotify prototypes

Skateboards and Ferraris are both complete solutions to a transportation problem. They differ in their number of features, level of finish, and capability. But they’re complete solutions all the same.

Via The Internet.

iPhone Prototype

iphone prototype

The Wall Street Journal ran a great story yesterday about the early days of the iPhone. It’s worth a read, but if you’re crunched for time, just grab the picture above. It says so much. It’s from 2006, and shows the early prototype of the iPhone: a touch screen interface, tethered to a Mac, with an ACTUAL phone, speakers, and a rat’s nest of cables.

I dunno about you, but that gives me chills.

4 Holacracy Keepers

We’ve been implementing Holacracy for 8-ish months at Undercurrent, and I’m certain we’re not going back to our previous way of working. I still find it a bit over-engineered (complicated versus complex) but there are four things that stand out as core differences from traditional ways of working:

  1. Rule of Law
    Members of the organization agree to abide by a set of rational guidelines that supersede all others. This is a big one for most small or new organizations, most of which have no rules at all, instead relying on tradition, charisma, and culture to guide the work. For what it’s worth, I’m not necessarily referring to the Constitution here, but rather to the rules and roles that the group creates.
  2. Constant Participatory Reorganization
    Most companies are reorganized on some multi-annual rhythm, according to management diktat*. Monthly, local reorganization based on sensed data (data being the plural of anecdote) makes most changes safe and gives everyone a consensual say. Two sub-points here. Frequency makes things safe: if a structure sucks, it can be changed next month, after we know that it sucks from experience. Togetherness makes things stick: things we used to decide top-down weren’t adopted; things we decided to do as a group have stuck.
  3. Structured Decision-Making Process
    The Integrative Decision-Making technology inside of Holacracy is fantastic. It feels arduous, inhumane, and just plain slow at first, but it’s clear that when compared to previous approaches for decision-making, it makes huge issues easier to tackle as a team. Have some data? Propose a change. Consider the change thoughtfully, but without discussion (that’s key). Edit it with feedback. Before committing it to the record, ensure that the change won’t cause harm to the organization.
  4. Defined Output Format
    By providing a rudimentary pattern language – roles have XYZ properties, accountabilities are phrased in this way, etc. – more people are able to participate in the structuring of the work. Without this definition, I believe self-governing systems require representatives: it’s too hard for a random fellow off the street to learn how to participate in Congress, say, so we elect reps to learn the system for us. In Holacracy, everyone’s able to participate because the output is (relatively) constrained.

There’s a fifth one that I’ll leave off for now because it feels so different: bullshit-less project meetings. Most status meetings that we observe (and that we used to run inside UC) were vague blends of doing the work and dividing the work. In a traditional system, project updates lead to interminable discussion. Better meeting facilitation leads to swift updates, more clarity, and very little wasted time.

*Diktat! I finally used it in a sentence, 20-something years after having it in a spelling bee study book.

Leaders are Awesome

At Github, Tom described a setup where the power structure of the company is defined by the social structures of the employees. He showed a network hairball to illustrate his point, said that Github employees can work on what they feel like, subject to the strategic direction set for the company. There are no managers.

This bothered me a bit when I heard it last summer, and it’s gotten increasingly more uncomfortable since. I’ve been paraphrasing this part of the talk as “management is a form of workplace violence,” and the still-evolving story of Julie Ann Horvath suggests that the removal of one form of workplace violence has resulted in the reintroduction of another, much worse form.

The title of this article is “Managers are Awesome”. I’d argue that “Managers” are terrible, and “Leaders” are awesome. Managers are a relic of command-and-control structures, and if we play it right, we won’t need them anymore.

Read more: Managers are Awesome

The Excel Conundrum

Email and Excel are two of the most formidable software competitors ever: people use them to do just about everything. Yet we don’t often think about them as competitors because they don’t compete directly…they compete indirectly by being flexible tools you can use for almost anything.

Last night at the futureofwork.co event, Stowe brought up a good point: that “enterprise” is a really good way to sell software, but a really bad way to use software. Further, it’s clear that in our work, the Excel problem rings true even outside the software environment: existing behaviors and tools are the biggest enemies to change.

Read more: The Excel Conundrum


Edges can take many forms. Three primary edges are geographic (emerging economies and developing talent spikes), demographic (younger generations entering markets and the workforce) and technological (new waves of technological innovation). A hallmark of edges is the ability to scale innovations rapidly in ways that challenge and ultimately transform the core of our economies and societies. This process of edge-core transformation is accelerating. For this reason, edges are vitally important to understand even though it is easy in the early stages of edge emergence to dismiss them as marginal and uninteresting.

This exists, and I’m happier for it. Also the list of Edgerati is a good reading list if you want to want to get hired at Undercurrent.

Read more: Edgerati

Hot Hands

There’s a lot of good research that says that statistically speaking there is no such thing as a “hot hand”. Which is to say that when it comes to basketball, if you hit three shots in a row, you’re no more or less likely to hit the next shot than you are after any other randomly selected shot. I disagree almost completely with this research – if you’ve ever been “in the zone”, you know that the game actually changes – and I’m thrilled to hear that:

So the researchers controlled for [heat-related bad behavior]—and found what players and fans have long believed: The hot hand does exist. At least a little. According to the new research, players enjoying the hot hand are 1.2 to 2.4 percentage points more likely to make the next shot. Not exactly en fuego, but still.

Flow is real. And (using the basketball example) it’s not just shooting, it’s in every aspect of the game.

Read more: The ‘hot hand’ might be real after all