Holacracy makes good: Behind the scenes of egalitarian-business success Propellerhead

A ‘flat’ organisational structure that eliminates bosses and employees and creates an organisation of equals? Sounds crazy/impossible, right? Well, mostly it is.

Companies that have adopted the egalitarian structure, such as high profile online shoe retailer Zappos, have struggled with everything from organisational problems to high staff turnover. Closer to home, we’ve covered HR Shop’s flirtation with, and recent retreat from, holacratic governance. 

But if you think it’s 'case closed' on the grand experiment, think again. There are still businesses that believe that there’s a better way to run a business than top-down governance, among them, Kiwi software development firm Propellerhead. For them, Holocracy has been, more or less, an unbridled success.

We wanted to find out the secret of their non-hierarchical success, but, in a holocratic environment it’s not as simple as interviewing ‘the boss’. After all, what boss?

So we talked with Propellerhead ‘leader’, founder and director, Andrew Weston; head of client relations Petra Škorić, and senior developer Raimana Lowgreen, about the nuances of making a bossless office work.  

Idealog: Next year is the 10th anniversary of Holacracy, and last year saw the release of Holacracy v5. It’s no longer a fad, but still relatively unknown. When and why did you make the switch?

Andrew Weston: We first came across the idea of Holacracy as a business operating model in mid-2014. We thought it was interesting, but opted not to adopt it at that time as we were already on our own path to building greater working autonomy. 

It wasn’t until late 2015 that we finally decided it would be more straightforward, and efficient, to build on the work of others.


Image: Propellerhead founder and director, Andrew Weston

How has the culture of your organisation changed as a consequence of embracing Holacracy? Good, bad or indifferent? You have 40 plus people. How would Holacracy work for a New Zealand company with 400, or even 4000 people?

Weston: I can’t say the culture has changed much. Holacracy has just given more structure to what we were already trying to do, and allowed us to make sure everybody has the chance to contribute to the improvement of their working environment.

From where I sit, the system would work for a company of 400 or 4000. With Holacracy, the organisational structure doesn’t need to change significantly – just the way people operate within it. It lets organisations replace the functions of managers with well-defined roles, each with a clear purpose and accountabilities.  

Petra, how does Holacracy impact your level of engagement inside the organisation, and is it something you’d recommend?

Petra Škorić: I don’t feel like Holacracy has had too much of an impact on me personally, because my role and personality require a high level of engagement no matter what organisational system I’m a part of.​ From my perspective, the way we worked before Holacracy isn't too dissimilar to how things are now. ​


Image: Propellerhead head of client relations, Petra Škorić

Raimana Lowgreen: It introduced a decentralised decision making process, to involve all employees – ensuring we’re more than our titles/labels, and are not working in an environment where decisions are forced onto us.

I would definitely recommend Holacracy, although I imagine it may be challenging to implement across larger enterprises.

It’s often perceived as a disruptive tool, so what are the biggest unforeseen changes you’ve had to make as a consequence of using it?

Weston: We haven’t had any unforeseen changes crop up as yet.

That said, the biggest change for me has been no longer simply stepping into any area I thought might need my help or input. I can certainly offer my opinion, but each area in the organisation now has much more clearly defined boundaries and ‘owners’. 

For you Andrew, in practical terms, what’s better inside Propellerhead as a result of Holacracy, and what have you had to let go of?

Weston: People now have greater permission to contribute to the governance of the organisation – how it works and how we do things.

All manner of great ideas are starting to emerge and, as a result, I no longer have to be everywhere ‘designing’ the organisation.

Does it mean that there isn’t really a boss anymore? Or is that a misconception?

Lowgreen: We still have a boss, as there’s still that need for someone to define/establish the foundation, vision, philosophy, and values the company stands for. 

In that sense we still have, and still very much need, a boss. I don't believe Holacracy’s goal is to eliminate that role.

Weston: Even prior to Holacracy, I never thought of Andrew as a typical boss-type figure. He acts a​s a​ mentor, a guide, a ‘wise elder’. There to support and advise when needed, and who otherwise tends not to get involved.  

Andrew, you’re the founder of Propellerhead and still work in/on the company. How has your role changed and is the notion of a ‘bossless organisation’ that Holacracy touted, fundamentally flawed? 

Weston: We may be ‘manager-less’ but we are certainly not leaderless. Holacracy provides a particularly good framework for each person in the organisation to be in charge of their domain, whatever that may be.

The traditional notion of a manager, providing your next task, giving permission to take an action, etcetera is superseded by a role- and policy-driven framework. We don’t lose the best things that come from good leadership, rather, everyone gains through significantly improved clarity of purpose and clear accountability.

So how does this video align with Holacratic principles? It looks so much like a leader/employee dynamic for all intents and purposes – is that part of the difficulty of Holacracy? That truly letting go is harder than it sounds? 

Weston: Actually, letting go has proved to be much easier than I thought it would be. While I do like to be involved in many different areas of the business, with the opportunity to solve all manner of interesting problems, being the ‘hero’ boss is quite taxing. I find I now have a lot more time to focus on areas which make the biggest difference to the business, while staying out of the way of others who are actually very competent at their jobs.

Having someone provide vision and direction is still very important for any organisation. Under Holacracy, we have codified this into a properly defined role – that I fill at present – with clear expectations and accountabilities. Now everyone within the organisation understands what to expect from this role and who currently fills it.     

How do employees stay engaged and empowered, without the traditional level of access to managers/leaders?

Škorić: Holacracy gives everyone the opportunity to be a leader, and encourages people to become more engaged. So if anything, it is far easier to get involved than in traditional hierarchies. 

Lowgreen: As far as I am concerned, traditional levels of access to managers/leaders doesn’t give employees much of an opportunity to be engaged or empowered. Instead, those roles tend to create a scenario where they’re expected to blindly submit to new decisions, policies etcetera, and follow instructions. 

Holacracy gives people the chance to shine by making, or being part of critical decisions themselves, and leading or proposing new ideas that don’t just end up in a ‘suggestion box’.

Proposing new ideas or making your own decisions doesn’t mean you are on your own. Everyone should seek advice from other team members, letting their ideas be challenged to make sure they’re solid, reasonable and add value.