1500 days of holacracy - an interview with Piotr Majchrzak

Before holacracy

Zuzanna Talik: Where did the idea to implement holacracy come from? Who came up with the idea to introduce such a system? Under what circumstances did this happen?

Piotr Majchrzak: Since the inception of the company (in 2004) we were guided by principles which, looking at them now, were the foundations of what is needed to implement self-organization. With an agile, transparent, open culture we were pretty good with the teams at an operational level, especially the ones that develop digital products, but we lacked a cohesive way of working on a whole-company level.

Most of the time, we learnt things by trial and error, so we have become kind of a new-way-of-working lab, but at a certain moment we felt like we needed something that would function more consistently - a system. This is when we found out about holacracy and decided to give it a try. I think it was me who brought it up, but there was a team that supported the decision.

The circumstances were not so different from now: our business is very highly competitive, things change rapidly, and we do not sit on a pile of cash. But we had money not only to hire the best European consultants, but also to set aside a reserve in case of trouble during such a demanding transformation. It was kind of like jumping off a cliff with no parachute though, I must admit.

Z.T.: Why was it decided to introduce holacracy in the company and not another management system?

P.M.: What was appealing about holacracy was its completeness. We also liked the idea that in order to give people freedom you have to bring clarity, strict rules, and structure which everybody in the organization can adapt to. A holacratic organization is like a city which has rules and regulations, but everybody can live, work, and invent without surveillance.

Z.T.: Which companies were an example for you and why?

P.M.: We researched many companies developing self-management paradigms, not just holacracy. But when it comes to holacracy as such, we followed the example of Zappos (US), Springest (The Netherlands), and Liip (Switzerland). In broader terms, we were inspired by Patagonia, Valve, Spotify, and RedHat. There are also other companies, less globally known but doing great things, such as Buurtzorg (a self-managing Dutch health care organization) or Morning Star (the largest tomato processing and packing company in the US). Currently, we are talking a lot with Polish organizations that have decided to adopt self-management, e.g. Sente, Tooploox, and Sylius.

Z.T.: What didn’t work in the previous, classic approach to company management?

P.M.: Our earlier approach to company management was far from ‘classic’. Thus, when we introduced holacracy it was not a mindset revolution, but more of development of what we’d already been building. What didn’t work previously? We felt we could achieve much more if only our team could get the proper tools to co-manage the company. We lacked a suitable toolkit to allow each of us to solve larger problems, and an environment where everyone would have an impact on carrying out the vision of their own role.

Holacracy influences people and human resources

Z.T.: How was the intention to implement holacracy communicated to workers? What were their reactions?

P.M.: Paradoxically, the decision to implement holacracy was taken by a small group of people and it was driven by the company founders. Obviously, it was preceded by a number of talks outside and within the company. All the employees were eventually informed about the decision. We made sure to let people understand why we were doing it, to let them know that they could share their doubts, and to inform them about the scenarios that we had at hand in case the change turned out to be fatal for the company.

Z.T.: How many people were involved in introducing holacracy? What resources were needed to implement holacracy? Are there any methods or tools that can facilitate the transition?

P.M.: We began by organizing training for more than 30 people (around one-third of the whole company at the time) and we decided to introduce the system in the departments which could benefit most from it, that is, non-product teams: from marketing and sales, to administration, finances, employee care, and delivery. We had clear change choreography and adequate people who were responsible for the process. All those people had three to six months to learn a lot of new things, so the workload exceeded their regular duties, increasing by 30 to 50% at that time.

Z.T.: Does it happen (or has it happened) that employees leave the company because they find that the holacratic model doesn’t work for them?

P.M.: Yes, we experienced a consequence of our transformation in increased employee turnover. I won’t give you any detailed data because turnover in our industry is generally high, but I think you need to expect a 20–30% turnover rate within 6–12 months of introducing such a change. It all depends on what you expect from the change and how quickly you want to transform the organization. I think that the optimum speed of implementing change (the speed that enables you to see benefits relatively quickly) inevitably bears the cost of saying goodbye to people who are not ready for the change.

Z.T.: Are there any employees who have left managerial positions in other companies, in favor of working in holacracy at Boldare?

P.M.: I think that holacracy itself is not the only factor that attracts people who used to manage other companies. It’s a very interesting tool for them: novel, risky, often exciting. But what actually draws them to Boldare is our overall attitude to work, our innovativeness, the way we cooperate with other companies, and the value we create for clients.

Holacracy and Agile - the connection

Z.T.: What’s the link between Agile and holacracy? Do these ideas “work” together? How?

P.M.: These ideas are complementary. I once heard that holacracy is a kind of boosted Agile and I must admit there is truth to this. Agile is not something that simply accompanies holacracy; in fact, holacracy is an extension of Agile. We continue to use Agile in digital product development in our company: scrum, to be precise. Development teams use agile ideas in their day-to-day work. They focus on quick iterations, validation of their work, strong mutual cooperation, and bold pivoting.

Z.T.: Does the implementation of projects with the use of agile methodologies help in working in holacration?

P.M.: Yes, I think implementing an agile culture is the first step that is worth doing.

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Is holacracy for you?

Z.T.: In retrospect, which companies should think about introducing holacracy and which should not?

P.M.: I believe that holacracy is great for companies that deal with so-called knowledge work, companies that offer digital services and products. In simpler, less complicated, and less changeable work environments, holacracy may turn out to be a kind of overengineering for what is actually necessary.

Z.T.: Who can and who cannot work in a holacratic structure? Are there any features that are predisposed to working in this model?

P.M.: If you expect to do work allocated to you by someone else, if you want all decisions to be made by someone else – then holacracy is not for you. If you can’t stand open feedback from everyone and you’d rather receive it from your manager – then holacracy is not for you. But if you want to decide about the way your work looks, if you can deal with the consequences of your decisions, and if you treat feedback as a gift that helps you grow – then holacracy is a great system for you.

Benefits of implementing a holacratic system

Z.T.: What are the most impactful aspects of introducing holacracy to the company?

P.M.: Holacracy brings about other parallel changes. The level of innovativeness transforms to such an extent that sometimes, when you go back to work after a holiday, you might see a different company.

Z.T.: Is there any data confirming the effectiveness of introducing holacracy? Increase in revenue, level of customer satisfaction, higher job efficiency, etc.?

P.M.: All those metrics rose, apart from retention, but I cannot attribute them only to holacracy. They are a result of the overall company development, which, I hope, was supported by our organizational culture and the new mode of work: holacracy.

Z.T.: From the customer’s standpoint, what are the benefits of holacracy for Boldare?

P.M.: I’d say it’s the speed with which we adapt to the clients’ needs and consequently, the speed of decision-making.

Holacracy verification and outcomes

Z.T.: How is the fact that holacracy is working properly verified? Are there people in the team, circles that watch for the incorrect operation of this model?

P.M.: There are three factors.

1. People can see that this mode of work allows them to work better.
2. The value we bring to clients is at least the same as before, and there are prospects for its growth.
3. We don’t lack resources to deliver change.

Z.T.: When can it be said that holacracy is embedded in the company, that the process is done?

P.M.: Perhaps this moment comes when the whole organization works within holacratic mechanisms (meetings, roles, structures, principles), but for me this is a never-ending story of improvement. So, even today I can’t really say that the implementation of holacracy at Boldare is now complete.

Z.T.: How would you describe the company before moving into holacracy, and after?

P.M.: Before, we knew how to self-organize; now, we can self-manage. In other words, we used to work within a framework created by particular people, and now, we can all build the framework together.

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Z.T.: Which areas improved, and which didn’t?

P.M.: For us, the biggest problem is the HR department, in particular: employee care. We are great at recruiting and onboarding but we still find it difficult to establish the borders between independence and dependence: how much self-awareness we require from people and how much we should support them. I guess this is mostly because this area hasn’t been described by anyone yet, it’s totally unknown territory.

Z.T.: If you could describe holacracy in just one sentence, it would be…

P.M.: Holacracy is a system of working that lets us build an ‘antifragile’ organization and release human potential. However, you need to remember that this is just a tool – real work is work done with people, and by people.

Z.T.: Thank you, Piotr, for your time.