I’holocracy paved the way for constituent power in business. And its limits have led to a new subject that goes far beyond that and that is called constitutional management.
Far be it from us to create the latter to invent a new word, for the pleasure of appropriating things. On the contrary, constitutional management was born because certain observed limits were not addressed by the holocracy. It is, in fact, a superset that brings together all the limits found, the learning and the contents that result from it. With the motivation to make it something more powerful, adapted to any request for a deep and systemic transformation of a company. The ambition is thus to create a new work environment, new contexts that empower people. And that make companies able to change as quickly as they change.
An ambition that involves changing the nature and exercise of power, distributing authorities to officials through functions, and clarifying authorizations, protections, rules of cooperation, etc. ; explain the DNA code of the organization that will evolve with the observed realities, in particular the tensions observed within the company. A reality made possible by observation, “test and learn”, creating, in addition to holocracy, a space to define constitutional management.
Holocracy: a liberating structure
In less than fifteen years, holocracy has become a popular tool. However, it conveys a number of misunderstandings about what it is or is not. Misunderstandings that lead to many hasty judgments such as: “holocracy is not human”, “it is rigid”, to name just a few examples. Yes, holocracy is sometimes rigid, complex and inhumane. It’s not the miracle tool that some seem to expect. She can’t and doesn’t want to deal with everything. As such, holocracy can be described as a meta-constitution. In reality, it’s just a common denominator for all organizations, all companies, regardless of their size and fields of activity, and that on a global scale. So don’t cover everything. The example of HR functions is a perfect illustration of this. They differ from one company to another and therefore do not fall within the scope of holocracy.
To this first reality is added another. One that makes any form of framing like holocracy systematically suffer from a negative a priori. The framework incorporated in part by governance is frowned upon because, most of the time, it is a source of bad experience: penalizing, castrating, infantilizing, etc., all linked to a hierarchical model that many companies are still familiar with. Any notion of frame is therefore subject to a negative bias. Holocracy is no exception. However, it is thanks to this framework that everyone can hope to free themselves. Structure is essential, especially if it is, like a holocracy, virtuous and liberating through clear governance.
Systems that encompass the Holocracy system
There are three main subassemblies in this system. At the heart is first of all the holocracy and its constitution. This is surrounded by the codification of governance, which will, in particular, make it possible to explain the different roles of all employees that make up the organization’s activities, information essentially absent from the constitution, but essential. Then comes a layer of putting in motion and, finally, the global envelope that is the systemic transformation for the six territories.
The intrinsic limits of holocracy
But let’s first look at this first layer, which is holocracy and which, in fact, involves a number of boundaries. Since 2007, every time this tool is confronted with reality, problems, obstacles, things that don’t work; limits for the system in short. As a result, holocracy evolved, it was augmented by what was observed, learned in the field. Step by step, the constitution was changed. In fifteen years, we gradually moved from version 1.0 to version 5.0 that we know today. So the circle leader concept evolved a lot between versions 4.1 and 5.0 to correct a situation that caused the first link function to not work well. Same thing for some points in the governance process. And we could name many more.
The extrinsic limits of holocracy
Then there are limits extrinsic to the holocracy and which ultimately correspond to the things that, in essence, are absent and absent from the constitution. To address these shortcomings, role coding is key to filling these gaps and capturing reality: coding of operational activities, HR functions, social needs – tailored to the specific needs of the company in question – the notion of management, hierarchy and relationship of subordination linked to the employment contract, the financial processes, to name just a few.
Then comes the movement. This implies, in advance, taking into account the need to involve everyone, managers and employees, bearing in mind this Tuareg proverb according to which: “to do for people without people is to do against people”. Establish constituent power without involving employees? The result is certain: resistance and probably failure. However, this is not written in either the constitution or the codification. However, it is a necessity to get managers and employees moving. It’s the only way to change mental models, habits, build nudges, a more business-oriented culture, value creation. Otherwise, bureaucracy sets in. Instead of asking yourself some essential questions: who are my customers? Who am I working for? What value proposition am I creating? What is the purpose of my role? This is how a culture centered on the creation of values can emerge, a living ecosystem that finds its justification in the creation of values. Not a power on a playground or a team, but an authority tied to a role to create value. Everyone has the authority to do things in the service of their role. It’s the empowerment that everyone finally taps into.
Likewise, holocracy does not define management, but requires it to be explicit. While in the traditional system it is undefined and, consequently, implicit, here the managerial role will be defined precisely and explicitly. What is expected of a manager, the value proposition he must deliver, is clarified here.
The six territories for deep transformation
In order to succeed in profoundly transforming a company that embraces holocracy, it is necessary, beforehand, to present a systemic representation of the organization.
It is thus structured around three major areas: the individual level, the collective level and the business level. For each, we distinguish what is visible – behaviors, relationships or organization structure – from what is invisible – feelings, beliefs or value creation potential. In this systemic representation of the organization, composed of three systems and six territories, the holocracy is located at the company level, in the visible part. As such, it should be seen as a piece of the puzzle. Adopting it without being interested in the entire systemic representation of the organization, therefore, means nothing. To succeed in profoundly transforming a company, it is critical to consider all three systems and six territories.
Beyond the intrinsic and extrinsic limits of holocracy
Because beyond, outside of holocracy, to succeed in its transformation, it is inevitably necessary to deal with a certain number of issues, often overlooked, of blind spots that, unrelated to holocracy, can become powerful obstacles to transformation.
First important blind spot: the triple reason for change
Although absent from holocracy, it is necessary to discover it in order to update this source of energy that allows transformation over time. It is, in a way, this constituent energy of the company, the expression of a deep, intense and intimate need, most of the time carried by the manager. It is that initial, powerful and persistent impulse without which nothing changes.
The same happens with the principles of origin dear by Peter Koenig
Also absent from the holocracy, they nevertheless challenge the company’s vision of its organization. Everyone in the company can be a source of creative energy that needs someone to come true. Everyone in the company is co-entrepreneurs, co-creators. Without it, there is no commitment, no value creation, no transformation.
Ditto with this other blind spot which is theresponsibility energy
Process of empowering people – which is also absent from the constitution of the holocracy but which, for all that, must be entrusted to people capable of understanding it. They carry the meaning, they understand what it is about, and they want to move towards that goal for which they are fully aware they are expected. In this, the energy of responsibility allows moving towards self-management and transforming the organization.
And, in this way, another brake must be lifted. The one of negative feelings
For this, it is essential to allow everyone to free themselves from it, to take possession of that energy of responsibility that they want to embody. Thus, expressing feelings and taking risks should be valued; failure accepted and blocking nodes removed.
VThe desire to successfully transform the organization can only be done by doing the trust bet
To endorse the idea that, in essence, “man is good”. Nothing out of this world to think that, but, on the contrary, the conviction that trust is the only path that leads us to self-management. Without that trust, the company cannot intend to transform itself in depth.
Finally, it is important to reveal the implicit collective beliefs what would be limiting
“If you’ve ever swam against the tide, you know that we advance much slower and that we may even go backwards. The same is true in business with all the limiting beliefs that can cross it.
We can see, therefore, that beyond the practice of holocracy, beyond even its constitution, there are many other things to consider in the systemic map of transformation for the six territories. Realities that live, evolve, encompass, involve holocracy: the codification of the structure, the activation of management,… the systemic transformation in the six territories. It is the construction of all this that we decided to baptize constitutional management, a whole, ultimately, much broader than the holocracy, and in perpetual evolution.