What happens or needs to happen when an organisation switches to Holacracy?
With this article, I intend to give some clarity for founders or owners of companies that consider using Holacracy. I will outline the steps that need to be taken to move from the existing structure to Holacracy.
I will use our own case – that of Structure & Process – to explain the steps as we go along.
Establishing the legal base for Holacracy: The Foundational Document
A company moves to Holacracy when the current power-holders adopt the Holacracy Constitution.
In Structure & Process’s case, this was done by myself, Martina Röll, the sole owner, establishing and signing a foundational document.
It reads pretty straightforwardly:
With this, Martina Röll (the founder) establishes the organisation “Structure & Process”.
The organisation shall be governed under the rules of the Holacracy Operating System (…)
The founder ceases all their power into the Holacracy constitution (…). The only power remaining is to revoke the decision to operate under Holacracy.
With this, the organisation comes into being. It is basically independent from its founder: I still own it, but do not control it anymore: Holacracy does. It shall lead its own life in its own way.
An initial place to start from: The Anchor Circle.
To be practical, the organisation now needs a place to start from, and a person to get the work started.
The starting point from which an organisation is built up is called the “Anchor Circle” in Holacracy. It is the place from which initial structure is built.
The person who got things started, in our case, was myself – there simply was no one else around at the time. :) I appointed myself as the Lead Link to the Anchor Circle to start working from there:
The founder appoints themselves as the Lead Link to the Anchor Circle.
This can also be done in other ways: the founder(s) can appoint someone else as Lead Link, or establish a Board with various roles that represent stakeholders. The Holacracy constitution has the details in section 5.2.2.
This is a basic, working structure. It can now evolve.
Integrating existing Roles into the structure
In our case, there was already an existing structure from a previous organisation out of which Structure & Process had grown. Our foundational document establishes the continuity of this structure:
The organisation will work based on the existing governance structure as documented in the organisation’s Glassfrog-System (https://glassfrog.holacracy.org/circles/892) that evolved from the previous organisation “Röll & Korvenmaa”
If your organisation already has an existing structure, Holacracy Coaches can help you convert these into Role to work with in Holacracy.
Existing small organisations with little or no previous formal structure – such as many startups – may use the help of trained Holacracy Coaches and facilitators to set up the initial roles for Holacracy. Larger organisations transitioning into Holacracy may also use external help to translate the existing organisational structure into an initial holacratic one.
(When “The Otava Consulting Group”, the organisation that would become Structure & Process, was set up initially, it only had 6 operative Roles.)
Now, with a structure in place, how do people besides the founder actually get to work in the organisation?
From a legal foundation to a living organism: Establishing the relationship of the organisation with its partners (employees, staff, members, people)
The organisation needs to establish a relationship with its “partners” – that is: with the people who will be working in it, for it, as it.
“Partner” is the word used in Holacracy for any member of the organisation. Depending on the type of organisation you are setting up, these could be employees, freelance workers, volunteers or other people belonging to the organisation in a defined way.
Most Holacracy-based companies adopt a “Partnership System” or “Partnership Policy”. It establishes how a person can become a partner of the organisation (and, usually, how to un-become a partner). Alternatively, the Anchor Circle can make decisions on partnerships on a case-by-case basis.
- what kinds of partners there are (3 types in our case – Core Partners, Associate Partners and Guest Partners)
- how to become a partner (in our case: a Core Partner makes you one)
- how to resign a partnership (in our case: tell a Core Partner)
- how the organisation can revoke partnership (in our case: the Core Partners can do it)
- basic duties of partners (in our case: follow Holacracy, which includes following the organisation’s governance structure and its policies)
- the legal status of partners (in our case: being a “partner” does not make you a “partner” (co-owner of the company) in the ordinary legal sense. Your exact relationship may be defined by a personal contract.)
Partnership systems differ widely across organisations. See the links below this article for some examples.
Now, there is a system in place for how people can join the organisation. Humans carry the energy which will make the organisation come alive.
Living Holacracy Operations
With the legal foundation that establishes the organisation, and a process of how to become a member of the organisation, things are now ready to move: partners can join the organisation and be appointed to Roles on Circles in the holacratic structure. They will energise the Roles and meet in Tactical Meetings to take on Projects and synchronise their work with other partners / role holders. They will meet in Governance Meetings to evolve the organisation’s structure.
The structure is self-governing: the previous power holders have no special authority over anything that goes on. The members of the organisation themselves control how it evolves.
A system to hold projects
The organisation will need a system to hold its governance records – most Holacracy-based organisations use Glassfrog software. The organisation will also need a system for its partners to share project information: Glassfrog can be used for this too, or any other software- or paper-based system. (Asana can work. Basecamp can work. We use Trello.)
Four elements and ready to go:
With this – legal foundations, initial structure, partnership system, and operations support – all is in place to get work done.
(Actually, this is not true. The most important element is missing: purpose. What is your organisation about? This will be the subject of a future post. You can receive further updates via email through our newsletter!)
- For a more complicated Foundational Document, see Holacracy One, LLC’s Operating Agreement (via HolacracyOne’s Structure & Governance)
- More information on how Holacracy One, LLC is set up: see A Holacracy-Powered Legal Structure (HolacracyOne Blog, August 5, 2011)
- A more detailed partnership system template can be found in A “Partnership App” For Holacracy®-Powered Companies (HolacracyOne Blog, October 30, 2013).
- Evolving Organisation‘s Partnership Structure is available on their public governance records
- The Holacracy Quick-Start guide has more detail on the steps to take to get Holacracy running
- For more information on Holacracy, see What is Holacracy? on our Blog
- For a wider perspective on how to set up organisations, see 5 Steps to building an Organisation on our Blog
- On our company purpose, read People thriving on our Blog.
- On the importance of the Operations Support / Project Overview tools: Why personal productivity matters in Holacracy on our Blog
We welcome your questions or comments on this article!