Holacracy, the Operating System for Antifragile Organizations & Society, Psychedelic Churches and the Path to Higher Order Consciousness
Holacracy, the Operating System for Antifragile Organizations & Society, Psychedelic Churches and the Path to Higher Order Consciousness
Ep. 49: Brian J. Robertson with some of my thoughts
This episode helped me wrap up thoughts around management & organization after experiencing Zuzalu, Vitalik Buterin’s pop-up city in Montenegro.
I talked to one of the leading thinkers in management theory & practice.
Brian J. Robertson is a serial entrepreneur and the creator of Holacracy, a comprehensive practice for governing and running our organizations.
Holacracy is an often misunderstood, massively influential social and management system. Yet it is more than that, Brian's goal with Holacracy is to give people a taste of self-governance, personal growth and empowerment to impact society.
Holacracy is a modular, open-source, constitution-based management system with clear rules and management responsibilities. It is not no managers (although it aims to reduce the need for managers), and not no structure.
Quite to the contrary, it is more structured. The analogy Brian uses is the emergent order market-based order vs. top-down planning. Markets come up with better, more adapted, and more fit-for-purpose rules, institutions, and regulations.
The Theory of the Firm Problem
Brian solves for me a tension I thought about for a long time: why is it that firms in a competitive market-based system are run to a large degree by central planners?
Governments are fragile because they’re too big to effectively plan resources. Coordination mechanisms in markets like price signals don’t work.
Why then are bigger firms run like governments?
A key answer of mine we discussed is Ronald Coase's "Theory of the Firm" which talks about the planning horizon versus scale efficiency of greater size.
But that still presumes that hierarchy and top-down management work, it’s just that market competition is supposed to reduce the efficient size of firms.
That is somewhat unsatisfactory. Can humans only work in top-down ways? There seem to be many examples of better governance.
Brian's answer is Holacracy.
Organizations can be run more like markets and adapt more to tensions as they arise instead of relying too much on top-down decision-making.
Decentralized Antifragile Systems
"Antifragility" is a term coined by Nassim Taleb - it describes how organisms aren’t just resilient under pressure (robust), instead they become better under pressure.
Marc Andreessen said negative things about Holacracy in interviews - for him, it’s right up there with pot-smoking in the office and free kombucha.
This is probably based on a misunderstanding. However, Andreessen’s own model provides a good contrast: managerial vs. entrepreneurial capitalism.
Managerial capitalism is centralized-fragile: those are formerly centralized-robust organizations that are not led by founders but by managers.
Founder-led companies are centralized-robust: as long as they have the guiding vision and don’t exceed optimal Coasian firm sizes, they’ll do well.
The version of Holacracy that Andreessen is criticizing is decentralized-fragile: truly a lack of structure and dispersed ownership without engagement.
The good version of Holacracy is decentralized-antifragile - it can be even better than centralized robust. It can be more than a firm, it can be a movement.
Brian agreed with the model in the interview.
The best examples of decentralized-antifragile in my mind are Bitcoin and Ethereum - the latter I experienced firsthand over 5 weeks in Zuzalu.
Holacracy and decentralized antifragile are by definition a continuous work in progress - they’re never truly “there” nor is there a perfect example for it.
Yet it seems the way to go to build powerful movements.
I don't see the usefulness of a 2-by-2 categorization where 1 of the axes is "successful vs. unsuccessful". No one intentionally puts themselves in the "Unsuccessful" half. That might still be worthwhile if you can show that one of the squares is much more rare or frequent than the others, but your examples seem to show the opposite. All your current classification gives to the reader is the impression that centralized-decentralized makes no difference to success (ideally you'd have a second axis that separates the successful ones from the unsuccessful ones but is actually actionable).
"Governments are fragile because they’re too big to effectively plan resources. Coordination mechanisms in markets like price signals don’t work." But, what about Indonesia, Rusia and Canada?