While the word may conjur images of a new-age cult, Holacracy is an alternative organizational structure that has been adopted by companies around the world—including Medium, and the David Allen Company, the productivity consultants. It sheds traditional hierarchies for self-governing teams that get work done through tactical meetings. Zappos is the largest company to have adopted the system, and the transition hasn't been entirely smooth.

The system has its own set of rules and lingo, and is complicated to implement. The Holacracy parent company, HolacracyOne, helps companies transition by offering consulting services that run from $50,000 to $500,000, depending on how long it takes to achieve self-sufficiency. Even for much smaller companies, like Medium, which implemented Holacracy when it was just a couple dozen people in 2012, the journey takes multiple years and has a steep learning curve.

Governance: A regimented meeting where the structure of the organization—circles, roles—is decided. These can happen as often as an organization thinks is necessary.

Tactical Meeting: A replacement for weekly team meetings, during which circle members "process tensions" until they're resolved.

Tension: "Dissonance between what is (current reality) and what could be (the purpose)." In other words: the problem someone has with the work.

Tension Processing: Each person talks out his problem with the group until he who raised the tension is satisfied with a next step.

In his disdain for top-down order. Holacracy comes out of and operates within a milieu of unconventional ways to work that have become more popular in the last decade as younger and more visionary CEOs eschew tradition and seek out a new way of working. Among the options are sociocracy, Freedom at Work, the Morning Star Self Management System, and the Results Only Work Environment (ROWE). Each of those systems, including Holacracy, has a distinct approach to the same general problem. "The industrial age operating system is no longer compatible," said Traci Fenton, the founder and CEO of WorldBlu, which preaches the Freedom at Work method used by hundreds of companies worldwide, including Zappos before it adopted Holacracy. "You have to move into the new age to realize we've outgrown the clothes." The hierarchical organization dates back to the industrial revolution, when companies wanted to preserve accountability while employing large numbers of people. "It was a way of organizing labor such that the division of labor would be more productive and would be able to do tasks better repeatedly in a predictable way," says Ethan Bernstein, who studies organizational behavior at Harvard Business School. The industrial age operating system is no longer compatible.

As the American workforce moved away from the assembly line and into the cubicle, work no longer required people to repeatedly complete specific tasks. The information economy prizes ideas, creativity, and collaboration—all of which gets stifled by hierarchy. 

Unlike some of its contemporaries, Holacracy doesn't advocate for a flat organization. Holacracy organizes people around circles within circles within circles. People within those circles have "roles" that give certain team members complete control over their domains. Someone at Medium, for example, is in charge of fonts and makes all font-related decisions. Medium still has managers, because each circle has a leader. But unlike a traditional manager, not all decisions have to go through that one person, and that person can change—the structure of a Holacracy is very fluid. That's why people don't have titles, they have roles that often do change. The main objective is to distribute authority throughout an organization. Fewer decisions bottleneck through a boss, meaning faster decision making and in theory faster innovation. All of that makes Holacracy particularly appealing to companies that want to retain the benefits of fast-moving startups as they grow.

"Holacracy is not going to take a bad business idea and make it succeed. It’s not going to take a team that doesn’t have the skills and make it brilliant," Robertson said. "It's more of an accelerant," he said. He likens Holacracy to getting a new computer. Generally, self-management systems promise happier employees, healthier workforces, and as a result a more successful company.

Completely restructuring a company from the standard org chart tree to circles is one of the reasons the transition to Holacracy tends to be rocky. To create circles and roles requires a very regimented process, called a governance meeting. Then, there's a separate, also very systematic meeting for assigning particular people to particular jobs. Holacracy doesn't have any rules for firing or compensation. Some companies, like Medium, create special circles that handle HR. Another approach is to give people roles that empower them to fire and promote. Companies can spend a lot of time thinking about their structure, rather than doing actual work, especially in the beginning.

All of the confusing rules and terminology tend to scare people, but that's intentional. Obscurity, Robertson says, is part of a strategy to hook the right converts. "My sales approach is to try to talk people out of it," he says. The Holacracy website doesn't make it easy to understand what a company might be getting into. The "in plain English" version of the Holacracy Constitution is multiple mouse scrolls long. Robertson likens his method to that of Nigerian email scammers. "They are filtering out all the people that are not ridiculously gullible, only the ones that are really good targets are left. For us, it's the positive version of that." Robertson wants to attract people that get it, like Medium CEO Ev Williams. Of course, just because bosses can overlook the eccentricities of Holacracy for its potential, employees aren't always as open. The name alone is off-putting. When Williams first introduced Holacracy to Medium, multiple employees thought it sounded cultish. "I think it used to be Holawhat? That sounds like a cult," Jean Hsu, an engineer at Medium told me. Accepting Holacracy is like learning a complicated strategy game, like Settlers of Catan, says Robertson. "If you've ever learned to play a complex board game, all you see are a bunch of rules," he says. "That said, if you play the game with people who have played it before they walk you through it, eventually the rules totally fade to the background." Similarly, the best way to learn Holacracy is by playing. For new converts, Holacracy runs a taster week, during which a consultant simulates tactical and governance meetings.

Medium, which implemented Holacracy about three years ago, had a rough adjustment phase, too. Governance meetings can take hours. People got stressed about understanding the system, and began neglecting their jobs as a result. "Being bad at something is frustrating," Williams told me. "To do that something else that we're good at actually, we have to do this thing we’re bad at. As a group, we’re going to do this awkward dance. It’s hard and messy and it causes stress, and you’re like, 'why are we doing this?'"

Die taktischen Besprechungen, ein Ersatz für Ihre normalerweise sehr schmerzhafte wöchentliche Teamversammlung, haben die Mitarbeiter von Medium überzeugt - und es ist leicht einzusehen, warum sie schnell und effizient sind. Das Herzstück des taktischen Treffens ist ein Prozess namens Spannungsverarbeitung, bei dem die Teammitglieder nacheinander ihre "Spannungen" aussprechen, was in Holacracy Land jedes Problem bedeutet, das jemand haben könnte. Im Fall von Medium reichten die Spannungen vom Design der Website bis zum Namen des Kreises. Aufgrund von Koop blieb die Gruppe auf Kurs und überholte 20 Ausgaben in etwa 25 Minuten. Das Treffen bewegt sich auch schnell, denn "eine Spannung zu verarbeiten" bedeutet nur, sich für einen nächsten Schritt zu entscheiden und nicht zu einer Lösung zu kommen. Über ein halbes Dutzend gegenwärtiger und ehemaliger Mitarbeiter, mit denen ich gesprochen habe - selbst diejenigen, die Holacracy überhaupt nicht leiden konnten - erwähnten die Vorteile von taktischen Treffen. Nachdem ich bei Medium gestanden habe, kann ich bestätigen, dass sie viel besser sind als Standard-Team-Meetings. Zeug wird gemacht, schnell.

An diesem Punkt ist es noch zu früh, um zu sagen, ob Holacracy für Zappos oder Medium arbeitet, sagt Robertson. Holacracy verwendet jedoch die David Allen Company als Fallstudie. Obwohl sogar CEO Mike Williams es als "work in progress" betrachtet. Anders als Zappos hat Medium eine weniger dramatische Beziehung mit Holacracy. Die meisten Leute, mit denen ich in der Firma gesprochen habe, mögen es. "Wir könnten einen anderen Weg einschlagen, aber ich kann mir das angesichts dessen, was wir versuchen, irgendwie nicht vorstellen", sagte Kate Lee, eine leitende Redakteurin bei Medium. Andererseits ist das Unternehmen viel kleiner (ca. 80 Personen), hat Holacracy schon früh eingeführt und noch einige Jahre Praxis. Auch Medium ist nicht mit den meisten Standard-Metriken erfolgreich: Es macht kein Geld. "Es ist [Holacracy] kein komplettes System. Es ist nicht die Antwort", an und für sich, fügte Bernstein hinzu.

Zappos hasn't reached its potential yet. The journey takes about five years and chaos at the beginning is expected, says Robertson. "When I see everything that's going on at Zappos, it's all part of the shift."