Holacracy vs sociocracy: the differences that matter

Brian Robertson met sociocracy before he invented holacracy. He was looking for a way to decide as a group at Ternary Software, the software company he founded in March 2001 in Exton, Pennsylvania. Gerard Endenburg's Dutch method gave him the mechanics, the name bothered him, and his team settled on "holacracy" in early 2006.

The two models look alike for a simple reason, one descends from the other. Nested circles, consent and the elected delegate carrying information upward all come from the same place. The differences sit in the detail of the rules, and that detail decides what each model costs to install.

One lineage, two branches

The word sociocracy is more than a hundred and seventy years old. Auguste Comte coined it in 1851, Kees Boeke applied it in his Dutch school from 1926, and Gerard Endenburg turned it into a business method in his Rotterdam factory from 1970. In March 2015, James Priest and Bernhard Bockelbrink, joined shortly after by Liliana David, launched Sociocracy 3.0 and recut the material into independent patterns. Our article on sociocracy walks through that lineage in detail.

Holacracy has twenty years behind it. Robertson founded HolacracyOne with Tom Thomison in early 2007, the constitution appeared as version 1.0 in May 2009, then v4.0 in January 2014, v4.1 in June 2015 and v5.0 in June 2021. That last version renamed the Lead Link to Circle Lead and brought the text down to roughly 8,400 words. Our article on holacracy goes through its content article by article.

The differences at a glance

Criterion	Holacracy	Sociocracy
Reference text	A single constitution, ratified by whoever holds authority, about 8,400 words in v5.0	No single text. Endenburg's method is taught by The Sociocracy Group and Sociocracy For All, Sociocracy 3.0 publishes dozens of patterns
Status of the name	Registered trademark of HolacracyOne, text licensed Creative Commons BY-SA 4.0 on GitHub	Free name, no owner. Sociocracy 3.0 patterns carry the same Creative Commons license
Objection test	Four conditions that must all hold, set out in article 5.3.2	The circle would risk missing its aim. Sociocracy 3.0 also accepts arguments that show a possible improvement
Downward link	The Circle Lead comes from the structure, whoever fills a role leads the circle contained in that role (article 1.4)	The operational leader is appointed by the parent circle
Upward link	The Circle Rep is elected by the circle and becomes a member of the circle that contains it	The delegate is elected by the circle and sits in the parent circle with consent rights
Choosing people	Integrative election for the facilitator, the secretary and the Circle Rep, with the Circle Lead outside the election	Consent for every elected role, leader included
Meetings	Two formats written into the text, the seven-step tactical meeting and governance	Open formats, one operational meeting and one policy meeting, run in rounds
How you adopt it	Ratification of the whole text	Piece by piece, a team takes consent and leaves the rest

Objection, four conditions against one

Article 5.3.2 of the Holacracy Constitution asks whoever objects to demonstrate four things at once. The proposal would reduce the circle's capacity to enact its purpose or its accountabilities. It would limit a role that the objector represents. The problem would appear specifically because of the proposal. And the damage would land before the circle had time to adapt. The facilitator checks that the argument is reasoned, never that it is right. One case passes without any demonstration, a proposal that would violate the constitution itself.

Classic sociocracy fits in a sentence. Sociocracy For All puts it this way: objecting means a circle member has reasons to think the circle will fail to reach its aim satisfactorily if the proposal goes through. One condition, and it bears on the circle's mission rather than on the role of the person speaking.

Sociocracy 3.0 opens the door wider still. An objection there is "an argument that reveals consequences or risks that are better avoided for the organization, or demonstrates worthwhile ways of improving it". An improvement argument therefore blocks a proposal, which the four holacratic conditions explicitly rule out.

In practice, holacracy pushes more proposals through and pushes them faster, and it leaves a share of the good ideas by the roadside. Sociocracy picks those ideas up and stretches the meetings. You are choosing between two errors, and the question is which one costs you more.

The link between circles

Both models connect a circle to the one containing it through two people rather than one, and for the same reason. A single downward link produces a transmission belt. Two links produce a feedback loop, the cybernetic vocabulary Endenburg started from.

The upward link looks much the same on either side. In sociocracy, the delegate is elected by the circle and sits in the parent circle with the same consent rights as everyone else there. In holacracy, the Circle Rep is elected by the circle and becomes a full member of the circle containing it. Its purpose fits in one line of the constitution: "Tensions relevant to process in a broader Circle channeled out and resolved."

The downward link is where things moved. Version 5.0 renamed the Lead Link to Circle Lead and changed how the position is filled. Nobody appoints it now, since article 1.4 states that serving as Role Lead means serving as Circle Lead of the circle contained in that role. The downward link therefore falls straight out of the role structure. In sociocracy, the operational leader is appointed by the parent circle, which agrees on that choice.

The gap looks technical and it weighs a lot. In sociocracy, the parent circle debates who will lead the child circle, and that debate runs by consent. In holacracy, the answer arrives on its own, whoever holds the role holds the circle.

A ratified text against a pick-and-choose corpus

The Holacracy Constitution lives on GitHub under a Creative Commons BY-SA 4.0 license, with its version history and its open discussions. It reads in an hour. Adopting it means ratification, where those who hold authority in the organization formally transfer their power to the text, and the organization applies the whole thing. The name Holacracy stays a registered trademark of HolacracyOne, so derivative works carry a different name.

Sociocracy belongs to everyone. Endenburg's method is taught by The Sociocracy Group in the Netherlands and by Sociocracy For All in the United States, each with its own phrasing. Sociocracy 3.0 cuts the material into independent patterns published under the same Creative Commons license, so a team takes three of them and leaves the rest.

That difference often decides everything else. Ratifying a text takes a board or partners' decision. Adopting a pattern takes a team meeting.

What neither model settles

The Holacracy Constitution says nothing about pay, hiring or firing. It governs the work and leaves the employment contract and the salary grid exactly as they were. The four sociocratic principles, consent, the circle, double linking and election without candidates, stop at the same place. An organization can go fully holacratic and keep its pay hierarchy intact, a detail the stories about the end of bosses tend to skip.

The constitution's preamble adds a reservation that tempers a lot of promises. The ratifiers or their successors keep the right to amend the text or repeal it, drawing on the same authority they used to adopt it. Steve Denning turned that into his most quoted line in Forbes on 23 May 2015, calling holacracy "hierarchy on steroids, albeit not a hierarchy of people with the title of 'bosses'". The founder who adopts holacracy still owns the off switch, and sociocracy rests on the same footing, holding for as long as the owners want it to hold.

The hierarchy of domains survives in both cases too. Circles stay nested, with a general circle holding team circles. What goes away is the hierarchy of orders.

What each one costs

Holacracy costs learning first. Its own text warns that it is a rulebook rather than an instruction manual, and that "reading it will not teach you how to play the game". Expect a trained facilitator and several months before meetings run on their own. Zappos paid full price for that: 1,500 people switched over, more than 400 circles, 18% of the workforce gone over the year by Fortune's January 2016 count, and a fall off the Fortune 100 Best Companies to Work For list after eight consecutive appearances. Medium quit on 4 March 2016, with Andy Doyle explaining that the system "had begun to exert a small but persistent tax on both our effectiveness, and our sense of connection to each other".

Sociocracy costs meeting time and nerve. Rounds, policy meetings and elections all take hours, and those hours spread unevenly, since people with caring responsibilities supply fewer of them and carry less weight in decisions as a result. Sociocracy For All writes it in plain words, the absence of an objection gets mistaken for consent, and the mistake turns harmful in a group where a few voices dominate. The model assumes everyone feels entitled to block the group, and that entitlement builds slowly.

Neither one comes cheaper than the other by nature. Holacracy concentrates the spend at the start, on training and ratification. Sociocracy spreads it across every meeting.

Which one to choose

For an organization under fifty or so people discovering shared governance, start with sociocracy, and specifically with the Sociocracy 3.0 patterns. You adopt consent and rounds without convening your board. You keep the option of stopping after a quarter. And the broader sociocratic objection test lets in the remarks of people who have yet to learn how to build a four-point argument.

Holacracy earns its cost in three situations, and they have to hold together. Scope conflicts between teams are poisoning your daily work, to the point where you want a written rule that settles them. Your board or your partners accept transferring their authority to a text formally. You have a trained facilitator, or the budget to train one. When a single one of those three is missing, you get holacracy's meetings without its authority.

Team size counts for less than people say. Zappos switched 1,500 people over in a matter of weeks and came unstuck, while Bol.com started in 2015 with two volunteer logistics teams and now runs around 1,300 people across more than 170 circles, according to Corporate Rebels. Adoption pace explains the results far better than the number of people involved.

Four researchers, Ethan Bernstein, John Bunch, Niko Canner and Michael Lee, reached a close conclusion in Harvard Business Review in 2016. They recommend borrowing in pieces, with self-management where adaptability matters most and conventional structure where reliability matters most.

One practice holds whatever you choose. Write your roles with their purpose, their domain and their accountabilities. Most of the conflicts these two models claim to solve start with a scope that nobody ever wrote down.

The comparison on video

This video places holacracy and sociocracy next to the teal organizations described by Frédéric Laloux.

Practicing either model with Rolebase

Rolebase installs the mechanics of both models without asking you to ratify anything. When you create an organization, you start from a preset: holacracy v5, holacracy v4, sociocracy or classic organization. Each one installs its base roles and its meeting templates. The holacracy v5 preset creates a Leader, a Representative, a Secretary and a Facilitator, with a weekly tactical meeting and a monthly governance meeting. The sociocracy preset creates a Leader, a Delegate, a Secretary and a Facilitator, with an operational meeting and a policy meeting.

A role can be flagged as representing its parent role. Whoever fills it then appears as a leader of the parent role and takes part in its meetings, which makes the upward link concrete in the org chart.

The governance modes settle the question that separates the two models most, who changes the structure and how. In Free mode, any member edits the org chart. In Agile mode, the person responsible for a role edits that role. In Strict mode, the org chart changes only through a proposal.

A proposal bundles the decision put to a vote with the org chart changes prepared in advance, which apply once agreement is reached. The vote mode is set to consent, unanimity, simple majority or absolute majority. Consent reproduces the objection round of both models, with each person approving, objecting or abstaining.

Meetings are saved as reusable step templates, with a round, a checklist, indicators, tasks and discussions. Replay the same sequence every week, and keep a separate format for governance.

Our implementation guide walks through the steps one by one. See what Rolebase does, or create your organization free for up to five active members.

Frequently asked questions

Is holacracy a form of sociocracy?

It descends directly from it. Brian Robertson discovered sociocracy at Ternary Software in the early 2000s, and he kept its nested circles, its consent and its elected delegate carrying tensions upward. He then tightened the frame into a constitution, published as version 1.0 in May 2009 and reaching version 5.0 in June 2021. Wikipedia sums the relationship up in one line: sociocracy inspired related organizational forms, holacracy among them.

Which of the two decides faster?

Holacracy, because of its objection test. Four conditions have to hold together for an objection to block a proposal, which rules out personal preferences as well as improvement ideas. In sociocracy, one objection is enough as soon as the circle would risk missing its aim, and Sociocracy 3.0 also accepts arguments showing a way to improve the proposal. More proposals get through in holacracy, and a share of the good ideas stays outside.

Do you have to pay to use either one?

Both texts are free. The Holacracy Constitution is published on GitHub under a Creative Commons BY-SA 4.0 license, and the Sociocracy 3.0 patterns carry the same license. The name Holacracy stays a registered trademark of HolacracyOne, which forces derivative works to change name. The real cost sits in training facilitators and in meeting time.

Do these models remove the pay hierarchy?

Both leave it intact. The Holacracy Constitution says nothing about pay, hiring or firing, and the four sociocratic principles stop at the same place. An organization can go fully holacratic and keep its salary grid exactly as it is. The hierarchy of domains survives too, with nested circles, and only the hierarchy of orders disappears.

Can you combine the two?

Plenty of organizations already do. The four Harvard Business Review researchers recommended borrowing in pieces rather than adopting wholesale back in 2016, and Sociocracy 3.0 was designed for exactly that. One common setup writes roles the holacratic way, with a purpose, a domain and accountabilities, and decides with the broader sociocratic objection test. The one combination that creates a legal problem is using the name Holacracy on a modified framework.