Is it distributed or just a disorganised hierarchy?

Sometimes I think the Holacracy is just a really involved, long running practical joke played on the rest of us.

I was raised on the idea that decentralised and distributed organisations had untapped potential; it was one of my dad’s hobby horses. He used to specialise in organisational psychology, with an emphasis on non-hierarchical structures—breaking out of the org chart as he put it.

Of course, now he specialises in counselling for addicts, who he describes as being a much saner and less pathological group of patients than most large business organisations.

Basically I’ve been spoon-fed the idea that democratic and decentralised governance is a good thing from early childhood. And because I’ve always enjoyed reading, I’ve been reading texts and books on the topic for almost as long.

So, when I first heard about the Holacracy I was pretty excited—until I read about it. Whatever it is, it isn’t distributed or un-hierarchical.

The problem most businesses encounter with trying actual distributed decision making is that for that you need the organisation itself to be distributed and decentralised. If you want every employee to have agency and control over their part of the company, you can’t just reshuffle things internally. Shifting your formal hierarchies into ad hoc hierarchies that are coordinated with processes that are anything but agile and limber is pretty non-distributed and undemocratic.

Why is it undemocratic? Quick quiz:

What happens in a Holacracy when a group of employees decides that a top-down hierarchy is the most effective way of solving a problem?

Anybody seriously going to argue that the result wouldn’t look something like this?

210 Zappos employees respond to Holacracy ultimatum: we’re out.

Here are three simple, common sense, tests you can use to find out if decision-making and processes in your organisation are distributed or decentralised:

  1. If your headquarters or head office is bombed and everybody in it is killed would the organisation survive? The longer it takes the organisation to recover, if it does so at all, the more centralised it is and the less distributed the decision-making is. It doesn’t matter how many fluffy ‘lead links’ and circles you have, what you’re running is a disorganised hierarchy, not a distributed or decentralised organisation. A truly ‘un-hierarchical’ organisation can survive the destruction of many, if not most, of its individual units.

  2. Can people just walk in and get involved in making decisions and making things happen? Can they walk out just as easily with no obligations? The harder it is to join and the harder it is to leave, the more of a centralised hierarchy it is.

  3. Is it centrally funded or is each node completely independent from the rest in terms of revenue and costs? If it’s centrally funded—all the money comes from a single pot—and the purpose of the organisation is financial (i.e. it is a profit-seeking endeavour) then by definition it is centralised. Money in an organisation provides autonomy, power, and the ability to act. If every unit of the organisation is individually funded and could survive if cut off from the rest, congratulations!, you’ve got decentralisation.

It’s important to remember that democracy and hierarchy are orthogonal concepts. You can have a distributed organisation led by a tyrannical zealot (e.g. Al-Qaeda during the Bin Laden days)—the difference is that a distributed organisation tends to survive the death of the leader while many centralised ones don’t.

Similarly, you can have a democratically controlled hierarchy. In fact, that’s how most governments are run. If you want a fair and democratic organisation, you really don’t have to do away with hierarchies. It might even work better with them.

It should be obvious why it’s hard to run a traditional business as a distributed organisation with no hierarchy. Any organisation that is truly ‘un-hierarchical’ by definition doesn’t look like a business. They tend to look more like terrorist organisations, Alcoholics Anonymous, a local meeting of Quakers, or an Open Space Unconference. They certainly don’t look like Zappos.