By Peter Krauß —

Holacracy - Whatˋs The Fuss About?
Part 1

5 minutes read

What is the right approach to being as happy, productive and as innovative as possible? Well, I guess this question pops up in many companies and there are many books out there trying to give an answer to this question. However, I deeply believe there is not one answer “to bind them all”.

However some principles are helpful to create a healthy environment - this means for us updudes:

  • you need independence to make your own decisions
  • you need to know what you are responsible for
  • you need to know what you can expect from others and what they are responsible/accountable for

If all these conditions are met, the probability you finish your task with the highest quality and efficiency is high - and you may even have some fun in the meantime.

One guide that everyone is talking about in the moment is Holacracy. So we decided to have a closer look. And what did we realize?

It is not the “Silver Bullet” to solve all our problems! (What a surprise!)

But Holacracy offers many tools we started using to come closer to our Garden of Eden. In the next sections I will describe some key aspects of Holacracy. Our experiences will be part of a follow-up post.

The CTO is Dead - Long Live The Constitution

The classical hierarchical system - one person is in charge and takes all the decisions - worked pretty well for a few hundred years. It assumes this person is able to take the best possible decisions because he or she foresees every requirement and fully understands the big picture. This might be true for assembly lines producing simple things. But it already becomes unlikely if you think about fully automated, robot-controlled assembly lines in car production. It is completely impossible in an agile and fast changing software development process.

What could be the alternative? Anarchy, grass-roots democracy based decisions or maybe hiring an almighty genius who knows everything? But this would be the omniscient leader again… And how would you know he/she knows everything?

The answer Holacracy provides is an accurate set of rules to shift the power to a constitution that is mandatory for every member of the organization. As in every other constitutional driven culture, you are allowed to take your own decisions as long as you stick to the given rules.

The provoking title of this section could suggest Holacracy is not a hierarchical system - far from it! There is still someone (or even a group of people) that takes decisions for the whole company. Like a government may decide to build an airport, but all the technical decisions are taken by someone who actually knows how to construct a runway or a hangar (maybe a bad example for a Berlin based company 😃).

The main purpose of the constitution is to provide Roles (who is accountable for what) and Governance Processes (fix or improve the roles).

Role vs. Soul vs. Circle

The definition of a Role consists of three elements:

  • a Purpose
  • a Domain it controls
  • a set of Accountabilities and corresponding Domains

Only the Purpose is mandatory, the Accountabilities and Domains can evolve over time.

As an example we have a look at the Developer Role from GlassFrog - which is a web based tool developed by HolacrcyOne.



Satisfy the customer, with Product Vision as proxy, through early and continuous delivery of truly valuable software.


Implementing GlassFrog user stories, bug fixes, and chores in alignment with:

  • development practices set by Scrum Master
  • implementation standards set by Quality Guardian
  • testing new functionality before each production deployment
  • providing input into estimation at the request of Scrum Master
  • sharing development challenges with Product Vision, API Product Designer, and Developer as challenges arise
  • demonstrating working software to Product Vision regularly and frequently, and integrating feedback surfaced by Product Vision

A definition like this makes it explicit what you can expect from a developer and on the other hand a dev knows what he/she is accountable for.

There is a big difference between the people that are working in an organization and the roles they hold. Decoupling these two elements allows for drastic improvements to an organization’s culture.

Conflicts in organizations are mostly based on disagreements between different roles involved. But often they are mistaken as clashes between the people holding these roles. This makes the conflicts personal and we try to resolve them by smoothing the personal dispute rather than resolving the underlying issues in the organizational structure.

For example, if I as a developer need time to unit test a feature, this may clash with a product owner, who wants that particluar feature out as soon as possible. It seems that he/she is not trusting your judgement.

But in fact the conflict is not personal at all. Both of your are just filling your role and there is a tension that can be used to improve the organization even further.

HolacrcyOne provides a nice video that explains what a Tension can be:

What is a Tension?

How do the Circles fit into the picture now? Well, actually a Circle is just an accumulation of some Roles for a broader Purpose. So basically you can say, when a Role becomes too much - it becomes a Circle. It also follows the same Rules - it needs a Purpose and a Domain it controls. In other words: A Circle has the autonomy and authority to self-organize all Roles within the Circle.

This self-organization follows strict rules, called Governance, which will be explained in the next post.


Holacracy offers a comprehensive set of Rules to move away from a top-down hierarchy to a constitutional based organization that consists of Roles and Circles. The objective of Holacracy is to identify so called Tensions and harvest their energy to improve the organization constantly.