The paradigm shift
We are observers and participants of a paradigm shift in management. More and more attention is focused on dynamic governance, which slowly, but inevitably replaces the so-called traditional management, hierarchical in the power-over meaning of the word. Different names are being used to describe organizations operating under the new model, e.g. Teal as proposed by Frederic Laloux, agile as surveyed and promoted by Steven Denning and many others, humanocracy as coined by Gary Hamel. These and other authors describe numerous companies representing different industries, locations, sizes, and maturity status managed in a completely new way. Very many of the companies have created, often over the decades, their own, unique ways of operating in an agile, humanocratic, or teal way. For all the organizations, which are attracted to the new model, but do not have the time and/or ability to invent their innovative operating models, there is good news: there are ready to implement, complete, tested and safe governance systems: sociocracy(*) and Holacracy.
(*) By ‘sociocracy’ I mean here the most general term, covering the classical system derived from the Sociocratic Circles Method by Gerard Endenburg and promoted by Sociocracy For All, and others, as well as Sociocracy 3.0 by James Priest and co-developers.
The two ready-to-go systems
On the face of it, Holacracy and sociocracy seem to be the same thing – a governance system for an organization seeking both effectiveness and inclusion. They share the key underlying principle of distributed authority and provide a set of group practices for effective organization of work and in particular decision making. That should not be a surprise, as Holacracy (2010, Brian Robertson) was to a great extent inspired by sociocracy (1980’, Gerard Endenburg).
There are however certain differences between the two systems, which make each of them appealing to different types of organizations and contexts.
Focus on roles
Holacracy stresses to a much greater extent the importance of semi-autonomous roles. This is visible when e.g.:
- anything that is said or done in an organization should be expressed in the form ‘From my role X I am doing/saying….’;
- objection to a proposal is only valid if raised from a perspective of a role (not just any circle member, regardless of his/her roles);
- roles have always clear domains, which defines their scope of authority;
- it is up to a person in a role to decide what, how and when he or she does to fulfill the purpose of a particular role.
Group vs individual perspective
Holacracy empowers mostly individuals in roles, while sociocracy refers more to a group (circle). In particular, what in sociocracy belongs to the whole circle to decide by consent, in Holacracy is by definition a responsibility of a Lead Link (operational leader), e.g.:
- assigning people to roles,
- setting strategy/tactics for a circle.
- management of a circle’s resources.
In my opinion, Holacracy fits well with organizations where people are by default very self-managed, e.g. highly skilled professionals like consultants, lawyers, etc. It may also be more attractive to businesses as opposed to communities or non-profit organizations. The Constitution of Holacracy resembles strict bureautic regulations of highly controlled corporations, which is not as bad as it may sound. Business is systematically biased towards stricter regulations and the Constitution provides a very clear and detailed frame of governance rules frame. Sociocracy feels more like a set of best practices and recommendations with more space for customization.
From the market perspective, Holacracy is a product of one company, nicely packaged, well promoted and highly-priced. Holacracy® is a registered trademark, hence should be written with a capital H.
Sociocracy on the other hand belongs to the sphere of commons as defined by Elinor Ostrom(**) It is promoted as a system for social-change, very inclusive and with low (no) entry barriers, in particular when offered by SoFA.
(**) “Commons can be also defined as a social practice of governing a resource not by state or market but by a community of users that self-governs the resource through institutions that it creates”
In my consulting practice, I use sociocracy as the core system and flavor it sometimes with some specific elements of Holacracy (e.g. more precisely defined roles, operational meeting format, etc.). This of course depends on the context of the organization, which I work with. I believe, and saw it confirmed several times, that a small group as the basic unit for working and deciding together, works better than individuals in roles (see David Sloan Wilson’s writing for scientific explanation).
More generally, the two systems seem to be on somewhat convergent courses. For example, Holacracy is not recommended to be introduced in a single all-or-nothing approach anymore but rather through a gradual process adjusted to organizational context and condition as it typically is with sociocracy. Holacracy is also increasingly supplemented by various practices aimed at addressing the interpersonal dynamics in organizations – an element which is by default part of sociocracy.
So which one is better: Sociocracy or Holacracy? My answer is:
Not either-or, but both, and more!
I believe, the greater the variety of dynamic governance systems available in the world, the better for everyone. Let every group, organization, company find its own, most suitable way of including every member, employee or partner in co-creation and co-deciding. Starting from any of the ready-to-go systems, be it sociocracy or Holacracy, is an equally good option as long as the specific character of each organization is respected. Each company or group will inevitably customize and further develop the system, responding to the constantly changing, complex world around them.