Written Assignment

2

Experiential Exercise #3

Group 1

California Institute of Advanced Management 

MGT501-1: Management and Organizational Behavior

Dr. Richard Johnson

October 31, 2021

Summary

The purpose of the report is to discuss the agreement and disagreement of using detailed rules for governance in Holaracy as a substitute for “good leadership”. Furthermore, each member gives their assumptions and reasons for the challenge and breakdowns that iQmetrix might encounter during the first year of the Holacracy adoption.

Significance of Governing Rules

There are many opinions on “substituting rules for good leadership” or “taking the equivalent of the good leadership with “less complicated rules” in Holacracy. While the intention of Holacracy is to provide more autonomy to employees and allow them the freedom to determine their roles and level of contribution, it is difficult to replace good leadership with only the rules of Holacracy, especially within an organization that is trying to scale like iQmetrix. In addition, good leadership incorporates some nuanced skills and experience to manage a team effectively, and that isn’t something that can always be learned by following a set of rules. Some example rules that cannot substitute for “good leadership” or to be simplified are reflected in the following processes.

Governance Process

Governance Meetings

The set of attendance rules for a Governance Meeting cannot be substituted for “good leadership”. Depending on the situation at hand, only the members essential for communicating important points become Core Circle Members for the duration of the Governance Meeting (Holacracy Constitution, 2015). In addition, the rule limits the number of participants in the meeting, which can help keep the meeting concise and prevent loss of interest in people. At the same time, it also maintains a sense of consistency in how these meetings are held. “Good leadership” may not always provide this consistency and lead to lengthier discussions in some instances.

Operational Process

Duties of Circle Members

Good leadership is also not possible with less complicated rules. The rules of duties of circle members would align with good leadership skills or qualities.

To begin, under this rule, there are sub-rules, including duty of transparency, processing, prioritization, and conveying responsibilities, implicit expectations (Holacracy Constitution, 2015). For example, the duty of openness focuses on projects and following actions. We should track all the roles in the project circle, identify priorities of the tasks, provide precise projections, verify all the action items, and report them. Next, with the duty of processing, identify the requests for processing that you are accountable with, request for any other project, and subsequent actions, requests to impact any domains that indicate any objections to any submissions. Finally, we must prioritize processing the inbound messages received from the project circle when executing the subsequent actions. Plan for the requested meetings over execution, and circle the needs of individual goals by aligning with the prioritization of each circle’s lead link.

Tactical Meetings

In the rule of Facilitation and Process for a Tactical Meeting, the facilitator acts as a leader (Holacracy Constitution, 2015). The process involves check-in rounds, checklist review, metrics review, progress updates, triage issues, and closing round. In addition, it addresses issues like sharing thoughts/data, verification, tracking progress, and reflecting on thoughts collectively. Good leadership would also implement a similar process. Therefore, this set of rules would not necessarily be simplified as good leadership.

Challenges and Breakdowns

In this section, each team member states what they expect will happen throughout the deployment of Holacracy at iQmetrix.

Subashini Hariharan

iQmetrix had problems when changing its organizational structure, and this adaptation to the new system can be difficult for some employees (Holacracy Constitution, 2015). Holacacry is an organizational structure that mainly focuses on removing the power from the management hierarchy and distributing them across the roles within the employees. Considering myself as a manager for a team, one of the main challenges the team in iQmetrix was facing was allocating resources to deliver the projects at the right time. Without proper resources, the project execution timeline is affected as we miss highly prioritized tasks. Therefore, to have a clear insight into the overall team’s progress, track how much work has been done and left, monitor the project’s schedules, and allocate resources at the right time is important. If not, it will result in poor quality of work and manager would be responsible for such activities.

Vivian Han

Although iQmetrix had previously operated with similar ideals to Holacracy, I do anticipate them running into some challenges in the first year they start using Holacracy. By allowing too many employees the power to make and affect change, it can be counterproductive to getting policies and proposals finalized. For example, Section 3.2 Changing governance states that before a Proposal is adopted and implemented, all Core Circle Members have the opportunity to raise Tensions which can be escalated into Objections (Holacracy Constitution, 2015). When there are Objections in place, a consensus between the Objector and Proposer must happen to process the proposal for final approval. As a company becomes more extensive, with more employees involved in decision-making processes, it can cause a slowdown in the implementation of crucial policies in procedures if following governance rules like this. Along with this, Holacracy’s method of testing objections, while it may be thorough with its thought-out list of steps, look like something that can be confusing to follow. It’s also too difficult to disseminate clearly to a large body of people, which iQmetrix should consider as they continue to expand.

Urvi Deshmukh

Assuming myself as a lead link, the challenges that iQmetrix must have faced during the first year of implementation of Holacracy are, a) structuring the circle’s governance to enact its purpose and accountabilities, b) establishing priorities and strategies for the circle. According to the Holacracy Constitution (2015), structuring the Governance of the Circle would require the lead link to define or amend roles within the circle or policies governing the circle’s domain for maintaining both growth and the iQmetrix culture. Maintaining freedom, flexibility and transparency was crucial to iQmetrix’s culture. Since iQmetrix as a company was increasing in size, establishing priorities and strategies for the circle must have also been challenging at the initial stage of Holacracy to reduce the time required to make decisions. According to the Holacracy Constitution (2015), the Lead Link is required to precisely state the strategies which are heuristics for guiding the Circle’s Roles in self-identifying priorities on an ongoing basis.

Jingxin (Crystal) Guan

At iQmetrix, even if executives want the organizational structure and culture to remain the same as a five-person startup, the highly autonomous approach is no longer adaptable as the company grows to 500 employees (Street et al., 2018). As a result, the hierarchy management issue emerged. Therefore, finding a new way to lead for former managers is a challenge during the first year, as is turning lead links that still honor and direct the functions of the lead link without getting in the way of everyone else’s ability to lead (Holacracy, 2020). Because by Holacracy, where the manager’s or boss’s word is not necessarily the law, it is up to the employee to make the conscious decision.

Furthermore, the lead link might offer governance to limit the approach and establish work expectations in Holacracy. This is something that anyone in the system can accomplish, and it is no longer a power reserved for formal management. Therefore, there will be breakdowns of adopting the Holacracy due to failed governance (Holacracy Constitution, 2015). The members in the “circle” may not deliver or fail to fulfill a proposal after trying for a long time. This could be because of the existing culture at iQmetrix that employees were given too much autonomy. Thus, they were able to shut down procedures or ideas they didn’t like, allowing them to neglect and miss goals (Street et al., 2018).

Conclusion

Our team has agreed mostly that rules applied in Holacracy would not be substitutes for the “good leadership” merits and requirements and would not be a necessity in a more simplified manner. Moreover, as iQmetrix adopts Holacracy, allocating resources and fulfilling the proposal from the governance meeting time will become a problem as the existing culture of higher automation would lose efficiency and clarity for the coordination process. Other issues like proposal implementation will likely arise and get more opaque since iQmetrix was increasing in size. Setting goals and precise strategies is also expected to be a challenge as the company expands.

Reference

Constitution Version 4.1. (2015, June). Holacracy. https://www.holacracy.org/constitution

Holacracy. (2020, September 15). Leadership in Holacracy Webinar [Video]. YouTube.  https://www.youtube.com/watch?v=67RB15wgZ14&t=1916s  

Street, C., Frost, A., & Caswell, C. (2018). Organizational design at iQmetrix: The Holacracy decision. Ivey Publishing.