PUTTIN' COLOGNE ON THE RICKSHAW

The saying “One for all and all for one” is associated with the heroes of the novel, The Three Musketeers, written by Alexandre Dumas in 1844. In the novel, it was the motto of a group of French musketeers named Athos, Porthos, Aramis and d’Artagnan who stayed loyal to each other through thick and thin. The philosophy is that each individual should act for the benefit of the group, and the group should act for the benefit of each individual.

A couple of weeks ago I talked about the frequent business practice of reorganizing to get out of trouble. As I noted in the post if you look at “all” the different organizational methods out there in the business world you can find examples of each that both work and don’t work. While organizational structures can be unique to different companies, there are several distinct and commonly used types of organizational structures.

The most common is the “functional” organizational structure. It provides segmentation of departments according to their specific function, or purpose, within the organization. In bigger corporations it can also mean decentralized divisions, each of which would have their own structure. One downside to this structure in large corporations is the fact that the divisions may have functions that are redundant to other divisions. An example might be Human Resources, or IT or Purchasing. That’s why many large corporations create these type functions at the corporate level which then provides their services to the individual divisions. Although all organizational structures can suffer this, the functional organization can easily fall prey to the fiefdom syndrome. This is a major downside as this syndrome, more than any other, contributes to dysfunction.

On the other side of the coin we have what’s called a “matrix” structure. It’s supposed to create the best of all possible worlds, so to speak, and take the functional structure one step further. In a nutshell, the matrix structure creates teams for organizational projects that need to be completed and, in creating teams, draws together the most qualified employees for the project from various areas of the organization. In contrast to the functional structure, the matrix structure focuses more on projects and as such utilizes “program, or project, managers” who oversee a diverse group of individuals from different parts of a company.

Whether functional or matrix, flat or deep, all have the same goal–making the particular project, or overall organization successful. While functional or matrix are the most commonly seen organizational structures, there’s another hybrid that’s starting to get traction in the business world. It’s called a “Holarchy.”

The term “Holarchy” was coined by Arthur Koestler in his 1967 book, The Ghost in the Machine. It is derived from the Greek “holos,” meaning whole and “on” meaning entity. Koestler referred to a special type of hierarchical organization made of individual “holons.” Holons are parts of a bigger system and individual “wholes” at the same time–sort of like the Three Musketeers–one for all and all for one. Observed from “lower” levels a Holon will look like a whole, while observed from “higher” levels it will look like a part.

Most functional or matrix organizations are organized by management for the benefit of management. However, unlike the standard functional or matrix hierarchy, holarchies are created through a “bottoms-up” process. Here, interactions between holons at a “low” level define the next “higher” level. This proceeds all the way up to the top of the organization. An example would be how atoms develop chemical bonds with one another to create molecules. Koestler also says holons are autonomous, self-reliant units that possess a degree of independence and handle day-to-day functions, as well as challenges, without having to ask higher authorities for instructions. That said they are still subject to control from one or more of these higher authorities.

As you can probably surmise, developing a holarchial organization would take a new breed of management. Instead of imposing roles and rules from above, the Holarctic organization suggests that organizations be allowed to “build” themselves from the bottom upwards. In this way a Holarchy is self-organizing. To do this management must empower the employees and give them increased responsibility and authority to allow them to define the ongoing formation of the organization through their constant feedback interactions with one another.

How does a holarchy work? Each circle (Holon) connects to each of its sub-circles via a double-link where a member of each circle is appointed to be part of the other circle. This creates a bidirectional flow of information and rapid feedback loops. Each circle is a self-organizing team governing itself by establishing the roles needed to reach the aim of the circle. More importantly, each circle has the authority to define and assign its own internal roles and accountabilities. Each circle has a functional scope it focuses on–some circles are focused on implementing specific projects, others on managing a department, and others on overall business operations. Whatever the circle’s level of scale, the same basic rules apply. Each circle is a Holon–a whole self-organizing entity in its own right, and a part of a larger circle; for example, a whole project team circle may also be a part of a department circle.

According to Koestler, a Holarchial structure is one where there is a connection between Holons–where a Holon is both a part and a whole, i.e., “one for all, all for one.” In strict functional, or even matrix structures, we have more of what could be termed “one for one,” or every man for himself.

For most people, and especially for management types, the scary part is that a Holarchy is a radical “self-governing” operating system where there are no job titles and no managers. Instead of a top-down hierarchy, there’s a flatter “holarchy” that distributes power more evenly. An organization is made up of different circles and employees can have any number of roles within those circles. This way, there’s no hiding behind job titles–no more “that’s not my job.” In many ways this is exactly how newly-formed start-up companies operate.

One of the core principles of a holarchy is that people take personal accountability for their work. Contrary to what you may think, it’s not leaderless–there are people who hold a bigger scope of purpose for the organization. What it does do however, is distribute leadership into each individual role. Everybody is expected to lead and be an entrepreneur in their own roles, and holacracy empowers them to do so.

A down side of a holacracy is that as individual position titles disappear, human dynamics don’t, i.e., there’s just as much potential for individual agendas to emerge and derail the best laid plans for a holocratic organization. In this way, holarchies can be just as dysfunctional as any other organizational structure–especially if an organization that’s already dysfunctional is trying to convert to a holarchy as part of their grand “reorganization” plan.

The Holarchial approach to organization is obviously not for the faint of heart. As I mentioned it takes a different breed of management types–those that can actually relinquish some control and empower everyone in the organization to step up and take control of their own job function. In that way every organization could in essence become a holarchy–wouldn’t that be a great place to work?