Loading the player...

DEFINITION of 'Holacracy'

A holacracy is a system of governance where members of a team or business form autonomous yet symbiotic teams to accomplish tasks and company goals. The concept of a corporate hierarchy is discarded in favor of one where all workers have an equal voice while simultaneously answering to the direction of shared authority.

In a holacracy, instead of hiring a person to have a pre-defined role (typically outlined in a job description), people opt to fill one or more roles at any given time and have flexibility to move between teams and roles if they have skills or insights that would prove beneficial to the organization.

BREAKING DOWN 'Holacracy'

Arthur Koestler, author of the 1967 Book The Ghost in the Machine, coined their term holarchy as the organizational connections between holons (from the Greek for "whole"), which describes units that act independently but would not exist without the organization of which they are a part. For example, if a farm were to adopt a holocratic structure, it may look something like this: one team may be responsible for land management. Within that team, there may be individual roles for soil composition, irrigation, land management, and so on. Another team may be assigned to tools and vehicles, with individual roles for operation machinery, selecting and purchasing new equipment, performing regular maintenance checks, and so on. Workers may play multiple roles (driving a tractor and testing soil samples) should they have expertise to sufficiently complete those tasks.

Brian Robertson developed the concept and dynamics of holacracy while running a software development company named Ternary Software in the early 2000s. In 2007, he and Tom Thomison founded HolacracyOne and published the Holacracy Constitution three years later. Companies that have publicly adopted holocracy in some form include Zappos.com (AMZN) and Medium.

Critics have pointed out that holacracy as a corporate management doctrine does not mean the end of corporate hierarchy. Hierarchy is still an integral part of holacracy; in fact, hierarchies and the rigidity it creates in different actors' roles may be more pronounced in holacracy.

RELATED TERMS
  1. Corporate Culture

    Corporate culture refers to the beliefs and behaviors that determine ...
  2. Organizational Chart

    An organizational chart is a diagram that outlines the internal ...
  3. Plunge Protection Team - PPT

    The plunge protection team is the Working Group on Financial ...
  4. Corporate Ladder

    The rise through a company's hierarchy to further advance one's ...
  5. Sales Meeting

    A sales meeting is a discussion to promote the purchase of a ...
  6. Assignment Method

    Assignment method is a way of allocating organizational resources ...
Related Articles
  1. Investing

    Understanding Corporate Structure

    All publicly traded companies share the same basic corporate structure. Find out how the management hierarchy works, what responsibilities belong to whom, and who’s looking out for shareholders. ...
  2. Personal Finance

    Using a Financial Team With a Leader

    Having a financial team with a leader provides a coordinated approach to reaching financial goals.
  3. Small Business

    Why Small Business Owners Need to Delegate

    Entrepreneurs face the risk of a business failing if they don't have a delegation process in place.
  4. Insights

    Top 10 Most Valuable Sports Teams in 2017

    Learn which teams are the most valuable sports franchises in 2017.
  5. Insights

    Heartbreaking Pro Sports Team Relocations

    A look at four sports teams that have gone through chaotic divorces with the cities that loved them.
  6. Insights

    Sports CEOs: For Better Or For Worse

    The owner of a sports team may be the single most important person in determining the team's success.
  7. Insights

    The 5 Most Valuable Major League Baseball Teams

    NY Yankees rule the roost despite declining attendance
  8. Investing

    Understand Your Role In The Investing Process

    Knowing what to expect when managing your assets will help you achieve your financial goals.
  9. Tech

    Due Diligence Steps for Crypto Investments

    Protect yourself against scams and poor investment choices by taking these steps.
  10. Managing Wealth

    Three Perks Business Should Give Their Employees

    Firms that treat their employees well have a competitive advantage over their rivals. Here are three important perks to give your employees.
RELATED FAQS
  1. What is the difference between a president and a CEO?

    In corporate governance and structure, the roles of both CEO and president often vary across firms. Read Answer >>
Hot Definitions
  1. Business Cycle

    The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles ...
  2. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  3. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  4. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  5. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  6. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
Trading Center