The holarchy offers a better system for governing and operating, one that authentically distributes authority and embeds flexibility and self-organization into the rules and processes through which the community structures itself.
The holarchy distributes authority throughout the community and enables self-organization. A holarchy looks like a series of nested circles: each circle (i.e. team/group of people) is made up of a set of roles, grouped together around a specific function. Some circles will contain sub-circles and all are contained within the larger super-circle of the whole organization. Each circle is a holon – both a self-organizing entity in its own right and a part of a larger circle. As such, it has autonomy and authority to manage itself, but must also coordinate with other circles in the system. A holarchy aims to organize a community around the function that needs to be done instead of around the people who do it. This shift – from a hierarchy of people directing people to a holarchy of organizational functions – is critical.
Therefore, the “cells” of this organism are not people, but roles, which people then fill. Most individuals will fill multiple roles and therefore be members of several circles. Nobody is a level up than others. Each role has not only responsibilities in order to fulfill its work, but all the liberty and authority it needs. When the responsibilities attached to a role become too much for one individual to carry, that role may further need to break itself down into multiple sub-roles, becoming a circle of its own.
In holarchy, distributing authority is not just a matter of taking power out of the hands of a leader and giving it to someone else or even to a group. Rather, the seat of power shifts from the person to a process, which is defined in detail and agreed by the whole community. A holarchy builds autonomy at every level of integration. Governance becomes an ongoing process that happens in each circle, throughout the organization, with everyone’s participation (see P2P relations).
Holarchic approach to governance is tension-driven, meaning that issues are added to the agenda when any team member senses “a gap between how things are and how they could be”. Tension could be a problem – something that’s not working – or an opportunity that is not being harnessed. So, the holarchic social system always improves itself and evolves under the challenging of its inner and exterior environment. Everybody who sees a “tension” could come with a proposal. This proposal is “processed” using a very specific “integrative” meeting format (a specific method able to gather and consider each circle member’s input and to improve the proposal, without relying on a single leader to arbitrate or needing to come to a consensus). (text adapted from “Holacracy introductory whitepaper”)