In this article Kate Griffiths shows that the key ingredients for the governance of a 21st century business is having a structure that enables courageous conversations. The focus is on governance because that is part of decision-making and leadership processes and is often where power resides in an organisation. She redefines the meaning of governance and suggests ways forward having identified some potential major hurdles that need to be considered along the way
Traditionally governance has been about who held the power/ the governing body. A more modern definition refers to governance as a form of collective problem solving. In an increasingly complex environment with multiple sources of information this sounds like a way forward albeit a major departure from what we currently understand of as governance. And it does not come without its problems or challenges.
The surge of social media platforms like Google plus means that there are more and more ways to connect to others and new forms of collaboration become easier and connection is more prolific. If we take a quick look at human nature we will understand why that might not be enough.
Collective problem solving is not just a challenge to authority and those who hold power; its impact is felt at a more fundamental level. Margaret Thatcher recognised it as the following quotation shows:
there’s no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves. first
What Thatcher recognised was that most people look after themselves and at best consider the needs of their dependents. Wider concern for society is a step too far. If you add to this what was discovered by academics using experimental psychology to make government policy more effective then you can see a pattern emerging. In 2011 the Cabinet Office was puzzled at the lack of take up for loft insulation schemes when installation schemes were heavily subsidized and paid for themselves within months. Research showed that it was the hassle of clearing an attic that was deterring take up so in a pilot trial loft insulation firms offered to clear the lofts first & dispose of unwanted junk. Uptake increased threefold despite the extra cost to the consumer and when the service was subsidized to cost price, there was a fivefold increase. Laziness appears to be endemic and so if we want mass uptake of anything then it needs to be easy.
One interpretation of the Thatcher quotation is that the size of an initiative will determine its success and I have talked about the optimal size of an organisation in a previous post. Certainly as a business unit or business grows then the systems and processes that run it change. When I left a global consulting practice in 2012, it consisted of 1,700 people and had a completely different feel to the business unit I had joined over 10 years earlier that had consisted of 30 people. What kind of structure will work with both small organisations and large ones?
Holacracy offers the informality that is often the hallmark of a small organisation whilst providing a structure that allows for growth. Holacracy is all about providing clarity on the one hand whilst enshrining impermanence. Empowerment is baked into the heart of the organisation because people are both leaders and followers. One of its biggest virtues is that it gets away from consensus decision-making.
The small is beautiful principle is integrated into the design because members of the organisation form circles to look at a specific area of operation/ governance. If an area expands significantly then a sub-circle is formed to look at that and the original circle becomes a super circle. Within each circle there are very specific roles: lead link, rep link, secretary, facilitator and cross link. What this means is that accountabilities are clear but also that everyone is both a leader and a follower at any time.
The main focus within Holacracy is to process tensions. Tensions are all about sensing and then expressing the lack of harmony between what is and what could be. There is space to explore tensions when there are ways for the organisation to process them into meaningful change.
Taking this further we need to examine the integrative decision-making process – a key element of holacracy. The proposer puts forward a proposal that addresses a tension they have identified in their area of responsibility. There is no discussion whilst they articulate their case but once they have put forward the proposal then there is a round of clarifying questions which the proposer can choose to answer or not. Then there is a reaction round where circle members give their reaction to the proposal. After that round the proposer can tweak and/ or clarify their proposal if they so choose. Then the facilitator checks if there are any objections. The facilitator can test those and then when there is a list, they facilitate a group discussion to reach an amended proposal that takes into account the original tension and any objections. Then there is one final round to surface any further objections.
As you can see the role of the facilitator in the decision-making process is vital. They need to have excellent skills at leading conversations as it is their role to surface any assumptions, clarify any ambiguity and ultimately support the group in co-creating proposals that everyone agrees with. This is an art which requires a great amount of ability. The benefit is that consensus decision-making is avoided which is much more likely to cause disengagement and disempowerment.
In short I think that Holacracy provides a viable alternative for the way to run both the operations and the governance of an organization. Evan Williams, the founder of Obvious, who set up Twitter, spoke at Wisdom 2.0 this year and stated that he was creating a mindful company thanks to the tools provided by Holacracy and that running a start up this time round was a completely different experience to setting up Twitter. Holacracy encourages greater transparency and accountability in organisations as well as empowerment whilst recognising change as a constant – for those reasons I am an advocate. Finally the image of the tree with its roots has been used to symbolise holacracy. The conclusion that I draw from that is that it values and enables connection something rarely seen in other organisational structures.
Kate Griffiths is a qualified coach, speaker, community leader and writer, who is fascinated by the power of conversation. She teaches business owners, leaders and teams how to communicate effectively to build stronger relationships and thereby improve the possibilities for innovation and collaboration.
Kate is also the Community Relations Director of the 7 Graces Project, a thriving community and emerging social enterprise. The aim of the 7 Graces Project will be to provide an educational alternative and business incubator for a new generation of ethical, community-focused businesses.