In case you’re wondering, ‘holacracy’ refers to a form of self-management that confers decision power on fluid teams that put focus on roles rather than the individuals. Teams become the structure, and within the teams roles are collectively defined and assigned. Teams govern themselves but remain nested within the larger structure. Leadership in roles can vary depending on context. It is believed that such a flat organizational structure will foster flexibility, engagement, and efficiency. In reality, firms intending to utilize this concept to organize themselves shouldn’t go overboard with it. A better way to use this concept is to consider in which parts of the organization would greatly benefit from having elements of self-management where adaptability is paramount; and turning to traditional structures where reliability is vital.
Source: Havard Business Review