I was fascinated to see a Tweet from Clay Parker Jones talking about how they had implemented Holacracy at Undercurrent. Holacracy intrigues me since it is such a disruptive idea that plays well to many of the things I bang on about here, and the guys at Undercurrent have been publishing some smart thinking around organisational structures and culture of late, some of which echoes a few themes I've talked about before. And as as I've also said, organisational culture, structures and processes is the stuff that makes for real change. So I really wanted to know more and asked Clay (whom I've followed and known via his blog and Twitter for a number of years) to answer some questions about their experience of it. He kindly agreed:
NP: Why did Undercurrent adopt Holacracy?
CPJ: We began thinking about Holacracy in about May of last year. We read about Obvious Corp. (builders of Medium) implementing it and were mostly curious from an academic point of view; as our work became more about creating cultures than creating strategies, we thought it'd be an interesting reference point or tool to have in our kit. We were all impressed by the comprehensiveness of the documentation – the constitution in particular – and scheduled a taster session with HolacracyOne, the company that manages the evolution of the practice.
After the session we weren't certain what to do. The practice tracked with ideals that we knew to be right, but it felt dogmatic and unnecessarily complicated, as if we were aiming to distribute authority by creating a ton of bureaucracy. It aligned with our existing way of operating, so it'd be easy to implement, but the learning curve for the operational details was steep. And it would fix some of our ongoing issues (some voices dominating decision-making, setting guidelines for who's actually in charge of what), but it felt like it would also stifle some and turn off others.
In the end, it was so close to the way that we actually run things that we decided to give it a go. The upside was so obvious after a couple weeks of practice that we kept with it. It's good shit.
Short answer: we were curious about it, we tried it out, and we couldn't help but adopt it after trying it.
NP: How does is it work in the agency? Tell us more about how you apply the key principles (distributed power, circle structure, removing tensions, governance and so on).
CPJ: A few key things to sort out: roles are basically "jobs" that get done, and where I used to have one "Job Title", now I also have about 15 different roles that I play; circles are basically like departments, and are developed mostly by differentiating work and "domains" that circles control autocratically; you start with zero "structure" and build only the amount of organization required to do the work of the company.
- Board – filled by Founding Partners, each of whom bring different contexts to the job of setting Undercurrent's Purpose
- Core – the central "managing" circle of Undercurrent, filled by Lead Links to the various sub-circles that focus on the work of Undercurrent, and a handful of other roles (i.e. finance) that do work that impacts all the circles inside of Core (the next six in this list)
- Offering – in charge of coming up with new ideas that will put us out of business, and refining our standard offering (consulting work)
- Client – in charge of delivering the standard offering
- Growth – in charge of selling the standard offering
- Reputation – in charge of making Undercurrent famous
- Culture – in charge of ensuring that we have an amazing, well-supplied group of people that can achieve our purpose
- LA – in charge of everything that happens in LA, as we get that office set up
Each of those circles is wholly in charge of a particular domain, and is filled with roles that are constantly changing, evolving to fit our actual practice, the actual experience of being at Undercurrent. This evolution is driven by tensions, which are defined as something that stands in the way of our organization achieving its purpose. In monthly Governance Meetings we propose new Roles, Accountabilities, and/or Policies that take a safe-to-try step toward eliminating whatever tensions are being sensed by anybody in the company.
Sense a tension? Show up to governance, propose a change to how we do business, and get that change integrated into how we move forward. Meeting structures are set up in a way that prevents anyone from shooting down anybody else's idea – your only option, if you have an issue with a recommended change, is to help create a version of the proposal that is safe for the group to try. And if it doesn't work…fine, we'll fix it in a month.
Aside from that, all the work proceeds as normal, but with better, clearer structure. Weekly status meetings for each circle run according to a Tactical Meeting agenda, with clear rules of engagement. They're the best status meetings anyone has ever seen – we have clients and friends join, from time-to-time, to observe.
NP: So what have been the biggest challenges, or things you've learned from adopting it?
CPJ: It's super weird at first: the language takes a while to pick up; there are lots of rules; when you're making important decisions, there's no room for discussion, which seems scary; even for a cult-like organization like Undercurrent, it feels like it's on the edge of too much dogma. And while it's great for introverts – the meetings are designed to make it easy for everyone to voice their opinion in a safe space and at a safe pace – it's tough at first for extroverts that process things by talking.
For us, the transition was relatively easy. We're a small company, with a pretty rigorous approach to talent density. We are fairly flat, very transparent, and power has been implicitly distributed for some time. We don't report into another, larger organization. If you don't have those ingredients, I can see it being a bit more difficult.
The biggest learning for me so far is that our meetings and decision-making process (both of which I thought were good!) were such shit before. We were so slow. We were driven by perfection. We sat around and talked instead of taking action. Those things die quickly after implementing Holacracy. We still have a long way to go with the system. I don't think we're even hearing some of the tensions that live at the edges of our organization, and our muscle-memory from our pre-Holacracy org is strong. But we're getting there.
NP: And what's been the biggest or most surprising upside in the new approach?
CMJ: Biggest upside: more smart people being involved in more important decisions, but without the typical cost of management-by-consensus.
NP: Should more agencies adopt Holacracy?
I can't speak specifically to agencies, as it's been a while since I've worked with the dynamic between creative, accounts, and planning. I can certainly see it having a powerfully positive impact, at the cost of destabilizing traditional boundaries; our coach from HolacracyOne said this to us as we were training: "Holacracy shines a bright light on inefficiency." That said, it's well-suited to professional service firms and software dev companies, and as a consultancy the work naturally divides up.
Fascinating. My thanks again to Clay for answering my questions.