Holacracy: How Self-Management Works, With Examples

By Victor Hoang · Updated Oct 11, 2026

Holacracy is a self-management system that distributes decision-making authority through circles and roles instead of managers and job titles. Work is organized into overlapping teams (circles), each role has written purposes and accountabilities, and a fixed meeting process lets anyone propose a change to those rules. Authority comes from the role you hold, not the rank you have.

That's the short version. The longer one matters for executives, because holacracy is less a culture slogan than a rulebook. It comes with a written constitution, specific meeting formats, and a vocabulary that feels odd for the first few months. The pitch is that you get clarity and speed. The criticism is that you also get process overhead. Both are true, and the evidence on each is worth looking at before you rewrite anyone's org chart.

What Holacracy Actually Is

Harvard Business Review describes holacracy as a form of self-management that gives decision power to fluid teams, called circles, and to roles rather than individuals. That's a fair summary, and the key word is "roles." In a traditional company, a person has a job, a boss, and a title. In holacracy, a person fills several roles at once, each one defined on paper, and each role has the authority to act within its own scope without asking permission.

The rules live in a document called the Holacracy Constitution, which is published openly. Its preamble describes the people who adopt it as ceding their power to govern and run the organization to the rules in the document. In practice, that means a role's authority comes from what the rules say, not from who is senior. Changing the rules means using the governance process.

Holacracy isn't the only way to run a flat organization. It's the most codified one, and that's both its appeal and its biggest source of friction.

The Building Blocks: Roles, Circles, Domains, and Accountabilities

The constitution's definitions are short enough to quote almost whole, and they're the best way to see how different this is from an org chart.

Two features make this unusual. First, roles are not people. One person can hold five roles, and one role can be filled by several people. When someone leaves, the roles stay and get reassigned. Second, a domain means a role has exclusive control over something. If the "Pricing" role owns the price list, nobody else changes it without that role's consent, not even a vice president.

Circles nest. The top circle (the Anchor Circle) holds the organization's overall purpose. Each role can have its own sub-circle when its work grows large enough to need several people.

Lead Links, Rep Links, and Other Circle Roles

Version 4.1 of the constitution builds every circle around a few standard roles. The 4.1 text names these:

• Lead Link: Holds the circle's purpose, can set relative priorities and strategies for it, and can assign people to defined roles. This is the closest thing to a manager, but the authority is bounded by the roles and policies the circle has adopted.
• Rep Link: Elected by the circle to represent it in the circle above, and able to bring tensions from the sub-circle upward. This role keeps information moving both ways.
• Facilitator: Runs the meetings and keeps the rules in play.
• Secretary: Schedules meetings, records outputs, and keeps governance records.

Version 5.0 renamed some of this. The current constitution uses Circle Lead and Circle Rep rather than Lead Link and Rep Link, and keeps the Facilitator and Secretary roles. If you read older articles or hire a consultant who trained on 4.x, expect the old names. The ideas are the same.

Governance Meetings vs. Tactical Meetings

Holacracy splits meetings into two types, and keeping them apart is probably its most useful idea.

Governance meetings change the structure. They're where you create, edit, or delete roles and policies. The constitution's default format has three parts: check-in, agenda building and processing, and closing. Within each agenda item, a proposal moves through clarifying questions, reactions, an amend step, and then objections. Objections are raised one at a time, after reactions, so the process stays orderly rather than turning into open debate.

Tactical meetings handle the work. The default process includes check-in, a checklist and metrics review, progress updates, agenda building, triage of items, and closing. Tactical meetings don't change roles. If a tactical discussion exposes a structural problem, you note it and take it to governance.

Most teams recognize the pain this fixes. A weekly staff meeting that drifts between "who owns this?" and "what's blocking us today?" wastes everyone's time. Splitting the two forces a cleaner conversation. It also forces discipline, and that's where some companies bristle.

Tensions: The Engine of the System

In holacracy, a tension is a gap between how a role is working today and how its holder believes it could work. The constitution says role holders are responsible for trying to resolve their tensions. It's a neutral word on purpose. A tension isn't a complaint or a conflict. It's a signal that a role's definition, a policy, or a process might need to change.

Here's how it plays out. A support lead notices that refund approvals stall because three people think they own the decision. That's a tension. She can fix it herself if it's inside her role. If the fix needs a change to someone else's domain, she brings it to governance as a proposal. Everyone on the circle gets a chance to react, and the change is adopted unless someone can show a real objection.

The system's claim is that this turns constant small frustrations into small structural edits, so the organization keeps adjusting without a reorg every two years. Whether it delivers that depends heavily on how well people use the process, which is where reality gets messier.

Holacracy vs. Other Ways of Organizing

People often use "self-management," "flat," and "teal" loosely. They overlap, but they aren't the same thing.

The main trade-off is explicitness. Holacracy writes everything down, which removes the hidden power of informal hierarchies but adds process. A flat structure with no written rules often drifts toward the loudest voice or the founder. If you're working through how decisions get made in your own company, consensus vs. top-down decision cultures is a useful companion, and hierarchical vs. egalitarian cultures covers the wider spectrum.

Real Adopters: What Zappos and Medium Found

Two companies shaped how most executives think about holacracy.

Zappos

Zappos announced in January 2014 that it was dropping job titles and moving toward holacracy, replacing its traditional structure with a network of about 400 circles. At the time, the company had roughly 1,500 employees. Fortune's reporting says the first group to adopt it was human resources in early 2013, with John Bunch leading the company-wide transition. Harvard Business Review later called Zappos the largest company so far to implement holacracy, and Bunch coauthored that HBR piece.

The rollout was bumpy. In March 2015, CEO Tony Hsieh sent a memo offering employees at least three months of severance if they decided by the end of April that the new model wasn't for them. Fortune reported that about 210 workers, roughly 14% of 1,500 employees, accepted. Fortune's later account says that 18% of employees took buyouts and 29% of staff turned over in the prior year, partly because of the offer, and that employees described feeling confused and whipsawed by the pace of change.

That's one company's experience, and it involved a large, customer-service-heavy business making the shift in a very short period, with a buyout offer attached. It doesn't prove holacracy fails. It does show that the transition itself, not just the structure, can be the expensive part.

Medium

Medium announced on March 4, 2016 that it was moving off holacracy, having started the experiment in 2012. Head of Operations Andy Doyle said it wasn't because the system "didn't work" and that the company had changed. He wrote that holacracy had begun to impose a small but persistent cost on effectiveness and on connection among employees, and that it was "getting in the way of the work."

Medium's story is a useful counterweight to the Zappos one. Its stated reason wasn't that the system failed. It was that the company had changed and the tool no longer fit.

Honest Criticisms and What the Evidence Says

The honest summary is that holacracy has strong advocates and strong critics, and very little rigorous evidence for either side. HBR's authors, including a Zappos insider and academics, framed their piece as a corrective to writers who take extreme positions on self-management, either celebrating bossless workplaces or dismissing them.

The most common criticisms, and what's solid behind each:

• Process overhead. Medium's explanation points to a persistent cost on effectiveness. That's one company's testimony, not a measured average.
• Transition risk. Zappos's buyout and turnover figures show what a rushed, high-pressure rollout can cost. They don't show what a gradual pilot would cost.
• Hidden hierarchy. Critics argue that informal power survives under any formal system. This is a plausible concern, but none of the sources cited here measures it.
• Vocabulary and training load. The language of tensions, domains, and policies takes time to learn. That's a practical cost, though not one anyone has quantified well.

Anyone claiming holacracy raises productivity by a specific percentage should be asked for the study. There's no widely accepted one.

Key Facts

• Holacracy distributes authority through roles and circles rather than individual managers, per HBR's 2016 article by Bernstein, Bunch, Canner, and Lee.
• The constitution's current version is 5.0, which uses "Circle Lead" and "Circle Rep" where version 4.1 used "Lead Link" and "Rep Link" (constitution 5.0, constitution 4.1).
• Zappos announced its move in January 2014, planning roughly 400 circles for about 1,500 employees (Retail Dive).
• About 210 Zappos employees, roughly 14%, took the 2015 severance offer (Fortune).
• Medium started its holacracy experiment in 2012 and announced it was moving away on March 4, 2016 (Fortune).

How to Pilot Holacracy in One Circle

Don't roll it out company-wide. The Zappos experience is the best argument for a small test. Here's a practical way to run one.

1. Pick one team with real autonomy. A product squad, a customer success pod, or a marketing team of six to twelve people works. Avoid a team that depends on constant approvals from other departments.
2. Get an explicit yes from the leader. The team's current manager must agree to hold a Lead Link or Circle Lead role and give up some day-to-day control. Without that, the pilot is theater.
3. Read the constitution together. It's free and not long. Skim the articles on roles, circles, and the governance process before training anyone.
4. Draft roles from the work, not the people. List the recurring activities, group them, and write a name, purpose, and two to five accountabilities for each. Don't map them to job titles.
5. Assign roles, then name a Facilitator and Secretary. Rotate these so the skill spreads.
6. Run a governance meeting every two weeks and a tactical meeting weekly. Keep the two formats separate even when it feels slow.
7. Collect tensions in a shared list. Anyone can add one at any time. Bring structural ones to governance.
8. Review at 90 days. Ask whether decisions got faster, whether roles are clearer, and whether people want to keep going. Decide whether to expand, adjust, or stop. Ending is a valid outcome.

Pair this with the habits in building a culture of accountability. Clear roles only help if people also follow through on them.

Template: Role Definition

Copy this table for each role your pilot circle creates. Fill it in during a governance meeting so the whole circle can react to it.

Illustrative Role Examples by Function

These are illustrative examples, not drawn from any specific company.

Notice how narrow each role is. That's the point. Narrow roles with clear domains make it obvious who decides what.

Dos and Don'ts

Do

• Start with a single circle and a time-boxed pilot.
• Write roles from the work that actually happens.
• Keep governance and tactical meetings separate.
• Treat objections as information about harm, not preference.
• Rotate Facilitator and Secretary duties.

Don't

• Don't announce a company-wide switch in one memo.
• Don't use it to dodge hard conversations about performance. Roles can be reassigned, but someone still has to say a role isn't working.
• Don't let the CEO override circle decisions informally. That breaks the system faster than anything.
• Don't copy someone else's role list. Yours should come from your own work.
• Don't assume it fits every function. Highly regulated or repetitive work may need tighter control. That's what the competing values framework is for: weighing flexibility against stability.

When Holacracy Fits, and When It Doesn't

It tends to suit knowledge-work teams with clear sub-missions, leaders who are comfortable giving up authority, and people who like explicit rules. It's a poor fit when decisions truly need a single accountable executive, when turnover is high enough that nobody learns the process, or when leaders want the look of empowerment without the substance.

If your issue is spreading leadership rather than rewriting governance, distributed leadership may get you most of the benefit with far less machinery. And if you're growing fast, scaling culture in hypergrowth covers what tends to break first. Changing structure is one part of how to change organizational culture, and rarely the hardest part.

Holacracy is best understood as a trade. You give up the convenience of a boss deciding and get explicit authority, written rules, and a standing way to fix structure. Some teams find that liberating, and others find it heavy. The only way to know which you are is to try it small, watch how decisions actually move, and be ready to stop if the system starts getting in the way of the work.