Holacracy: how it works and what it costs

Most management models live in a book you have to buy. Holacracy lives in a versioned text file. The Holacracy Constitution sits on GitHub under a Creative Commons BY-SA 4.0 license, with its full commit history, its issue tracker and its list of contributors. Version 5.0, published in June 2021, runs to roughly 8,400 words. You can read the whole thing over a lunch break and judge it on its own terms.

So this article goes through what the rules actually say, what the adopters actually got, and what the whole thing costs.

Where holacracy comes from

Brian Robertson founded Ternary Software in March 2001, a software company in Exton, Pennsylvania. Looking for a better way to make decisions with a group, he found sociocracy, the Dutch method formalized by Gerard Endenburg. The framework fit, though the label bothered him. In early 2006 his team settled on "holacracy", after Arthur Koestler's holon, a whole that is at the same time part of a larger whole, an idea Koestler introduced in The Ghost in the Machine in 1967.

Robertson and Tom Thomison founded HolacracyOne in early 2007 to package the method for other organizations. Version 1.0 of the constitution followed in May 2009. Then came v4.0 in January 2014, v4.1 in June 2015, rewritten in plain language and cut from roughly 15,000 to 10,000 words, and v5.0 in June 2021 at about 8,400 words.

The document keeps getting shorter as the rules get clearer. Holacracy is a registered trademark of HolacracyOne, so derivative works carry a different name, and the rules themselves stay open to read, fork and amend.

Roles replace job titles

The constitution defines a role by a name plus three things. A purpose states the potential it pursues. Domains list what it controls on its own. Accountabilities spell out the ongoing activities it carries out for others. Whoever fills a role becomes its Role Lead, and one person usually leads several.

Each Role Lead carries one specific duty: compare what the role currently produces with what it could produce, and name the gap. That gap is a tension. The Role Lead turns it into projects and next-actions, tracked in written lists. The vocabulary comes straight from Getting Things Done, since Robertson borrowed David Allen's method for the operational half of the system.

A circle holds roles gathered around a shared purpose. The rule that surprises newcomers appears in one line of the text: the inside of every role is a circle. A role that grows breaks down into sub-roles without changing nature. At the top, the anchor circle carries the purpose of the whole organization.

Four constitutional roles hold the structure together

The Circle Lead, called Lead Link until version 5.0, assigns people to the circle's roles and sets priorities and strategy. Since v5.0 a circle may have several Circle Leads, and the role lost the specific accountabilities it used to carry.

The Circle Rep, formerly Rep Link, is elected by the circle to carry its tensions into the circle above. The constitution states its purpose in one line: "Tensions relevant to process in a broader Circle channeled out and resolved."

The facilitator runs the meetings and holds the process. The secretary schedules meetings, records governance outputs and rules on how the constitution should be read.

Those last three roles arrive through an integrative election. Everyone nominates one candidate in writing, with no comment on anyone else. Nominations are then shared out loud with the reason behind each, anyone may switch, and the facilitator proposes whoever collected the most nominations and asks for objections.

Two meetings that never blend

The tactical meeting coordinates the work. The constitution fixes its seven steps: check-in round, checklist review, metrics review, progress updates, agenda building, triage one item at a time, closing round. Each item ends in a request made to a role rather than in an open discussion.

The governance meeting changes the structure. It runs the Integrative Decision-Making Process in six moves: present the proposal, clarifying questions, reaction round, amendment by the proposer, objection round, integration.

The heart of the system sits in the objection criteria. A concern counts as an objection only when the person raising it argues four points at once. The proposal would reduce the circle's capacity. It would limit a role that person represents. The problem would appear specifically because of the proposal. And the damage would land before the circle could adapt. The facilitator checks that the argument is reasoned, never that it is correct. That single rule removes the veto on principle and the boss's casting vote in one stroke.

Version 5.0 added a welcome shortcut. A proposal can circulate in writing and take effect once everyone confirms they have no objection, and any circle member keeps the right to pull it back into a live meeting.

What the model delivers when it holds

The most interesting run happened in the Netherlands. Bol.com started in 2015 with two volunteer logistics teams, then compressed holacracy into a one-page framework called Spark. Corporate Rebels now describes around 1,300 people working across more than 170 circles. The contrast with Zappos says more about method than about the model, with a gradual opt-in rollout on one side and a company-wide switch on the other.

On the research side, Simone Weirauch, Sibylle Galliker and Achim Elfering compared 95 employees of holacratic organizations with 52 employees of conventional ones in Frontiers in Psychology. The holacracy group reported fewer illegitimate tasks (2.49 against 2.78 on the scale used) and markedly higher appreciation (5.33 against 4.14). The sample is small and self-selected, of course, which rules out any general law. The signal still points where you would expect: once every activity hangs off an explicit role, the work nobody is accountable for shrinks.

HolacracyOne claims more than 1,000 organizations worldwide. Its public directory lists only the few dozen that asked to appear, which leaves the total impossible to verify from outside.

What it costs

The constitution's own introduction sets expectations: the text is a rulebook rather than an instruction manual, and "reading it will not teach you how to play the game." Expect a trained facilitator, several months of practice and a shared vocabulary before meetings start flowing.

Zappos, which had been rolling holacracy out since 2014, paid full price for that learning curve. In March 2015, Tony Hsieh sent a memo to 1,500 employees offering a straight choice between committing to the system and taking a severance package. Over the following weeks 210 people took the offer, 14% of the company. By January 2016, Fortune counted 260 departures, 18% of the workforce, spread across an organization that had grown to more than 400 circles. That same year Zappos fell off the Fortune 100 Best Companies to Work For list after eight consecutive appearances. The company later moved toward an internal market where each team runs its own P&L.

Medium quit earlier and explained why. On 4 March 2016, Andy Doyle wrote that the system "had begun to exert a small but persistent tax on both our effectiveness, and our sense of connection to each other", and that coordinating larger cross-functional efforts had become slow and divisive.

The sharpest critique came from Steve Denning in Forbes on 23 May 2015, where he called holacracy "hierarchy on steroids, albeit not a hierarchy of people with the title of 'bosses'". He lands one point squarely: the ratifiers keep the power to repeal the constitution, so the founder who adopts holacracy still owns the off switch.

One case gets pulled into this debate by mistake. GitHub ran without managers from 2008 to 2014, then rebuilt a management line, as Bloomberg reported in 2016. GitHub never practiced holacracy. Its story argues the opposite of what people usually claim: a flat organization with no written rules ends up producing informal power that nobody can challenge.

In 2016, Ethan Bernstein, John Bunch, Niko Canner and Michael Lee reviewed several of these experiments for Harvard Business Review. Their recommendation favors partial adoption, using self-management where adaptability matters most and conventional structure where reliability matters most.

So should you adopt it?

Three pieces are worth taking whatever else you decide. Write your roles with a purpose, a domain and accountabilities, since that is where most scope conflicts start. Keep the meetings that move work forward separate from the meetings that change the structure. Set an explicit rule for changing that structure, so "who decides this?" has a written answer.

Two pieces deserve a real decision. Ratification hands formal authority to the text, which belongs to a board or to the partners rather than to a team. And the meeting discipline depends on a trained facilitator, otherwise the rounds turn into an empty ritual.

Sequence matters as much as content. Starting with one volunteer team, the Bol.com route, buys time to learn. Flipping a whole company in a few weeks, the Zappos route, turns every process bug into an employee relations crisis.

Practicing holacracy with Rolebase

Rolebase gives you the mechanics without asking you to ratify anything. You map your roles in a living org chart, each with its purpose, domain, accountabilities, checklist and metrics. The model is unified, so a role that contains other roles acts as a circle, exactly as the constitution describes it.

The Strict governance mode locks the org chart so roles change only through a proposal. A proposal bundles the decision put to a vote with the structural changes prepared in advance, which apply once the circle agrees. In consent mode each voter consents or objects, the same move as an objection round. Free and Agile modes stay available while you are still experimenting.

Meetings are saved as reusable step templates: Tour, Checklist, Indicators, Tasks, Discussions. Replay the same tactical sequence every week, and keep a separate format for governance. Holacracy's recurring roles, Lead Link, Rep Link, facilitator and secretary, are created once as base roles and then instantiated in every circle that needs them.

Our implementation guide walks through the eight steps, from governance settings to proposals. See what Rolebase does, or start your organization free for up to five active members.

Frequently asked questions

What is the difference between holacracy and sociocracy?

Gerard Endenburg's sociocracy is the original framework, flexible, built on consent and on elections without candidates. Holacracy is Brian Robertson's codified version, with a constitution that fixes the roles, the objection criteria and the exact sequence of each meeting. Our holacracy versus sociocracy comparison goes through the differences one by one.

How long does it take to implement holacracy?

Expect several months before meetings run on their own. The constitution presents itself as a rulebook rather than a manual, and facilitation is learned in session. Bol.com started in 2015 with two volunteer teams and took years to extend its Spark model to around 1,300 people.

Does holacracy get rid of managers?

It removes the manager's job title and keeps the managerial work. Assigning people to roles, setting priorities and defining strategy remain accountabilities of the Circle Lead. Steve Denning called it "hierarchy on steroids" in 2015 for good reason: circles stay nested, and the ratifiers keep the right to repeal the constitution.

Which companies practice holacracy today?

HolacracyOne claims more than 1,000 organizations, a few dozen of which appear in its public directory. Bol.com in the Netherlands and Cognizant Netcentric in Switzerland are among the lasting adoptions. Zappos softened the model into an internal market, and Medium dropped it in 2016.