Arthur Koestler, author of the 1967 Book “The Ghost in the Machine,” coined the term holarchy as the organizational connections between holons (from the Greek word for “whole”), which describes units that act independently but would not exist without the organization they operate within.
Holacracy is a new way of structuring and running your organization that replaces the conventional management hierarchy. Instead of operating top-down, power is distributed throughout the organization – giving individuals and teams freedom while staying aligned to the organization’s purpose.
How it works
In a holacracy, instead of hiring a person to fill a pre-defined role (such as that outlined in a job description), people opt to take on 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.
>Brian Robertson then 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 holacracy in some form include Zappos.com.
>Video game software company Valve Corporation, maker of the Steam video games platform. At Valve, employees are allowed to work on whatever interests them, but also requires that they take ownership of their product and any mistakes they may make along the way.
A word of caution
Critics have pointed out that holacracy as a corporate management doctrine does not mean the end of the 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.