The Value of Distributing Power and Authority Throughout an Organization | Brian Robertson

I was learning to fly an airplane right when I started my first company and I nearly crashed the airplane. I ended up, I was flying along with no instructor for the first time cross-country. So first time I'm in the plane with no one in the cockpit with me alone, flying hundreds of miles away. And on that journey, the low voltage light came on on my instrument panel. Early in my career, I realized these things are, the architecture is just broken. And that's just insane. Like, this isn't an elegant, beautiful system. So for me, uh, it came from like taking my passion for building elegant, beautiful, real-time software systems and saying, how can we make the human system of an organization just as beautiful? I've seen like 100 different solutions for how to deal with mentoring, but what they have in common is it's disconnected from the command authority. So if create a mentor role, it doesn't have the authority to tell you what to do. It's there as a mentor.

Brian, welcome, and I'm so, so glad to have you here.

Likewise, thanks for having me.

Yeah, and so just by way of introduction, do you wanna give people about 30 to 60 seconds about what you do in Holacracy? Because so that, so they have context.

Yeah, totally. So Holacracy is a really different way to run an organization or a company of any sort. It's a framework that replaces the management hierarchy. So it's an alternative that doesn't use typical CEO and managers and top-down management hierarchy is just not there. And there's thousands of businesses now all over the world that use this, organizations of all sorts, not just business, that organize in a very different way.

Thank you for that. And it was almost like fortuitous when I were in the middle of this project that we're, I'm sure we're going to get into, or that we started about a month ago. And I was literally scrolling on Facebook and I was trying to figure out like, how do we organize this? Because it's just growing. And I saw a post from you that you wanted to do a podcast, and I was like, this is perfect. So before we get into what it is, this is actually a question from one of your partners, Matt, that came up when we were doing research. And he brings up a really interesting point. Why Holacracy instead of building something that specifically fits a company's context? Isn't one-size-fits-all a bad thing?

Yes, I think it is. But Holacracy's actually not one-size-fits-all. It's a framework, right? So think of management hierarchy is also a framework, right? There's lots of different ways to hire people, fire people, compensate people, even in a management hierarchy. And, and there's different companies pioneer different processes around that, but they're using a framework of management hierarchy, centralized power in the CEO at the top and break it down a hierarchy of people. So holacracy is kind of like that. It's a framework level intervention. It's not telling you how to hire people, fire people. Pay budget. It's it's not telling you how to organize your business. It's a different meta process, right? So you customize within it. Or to use another metaphor, I don't know if you use a Mac. I do. If you do, we're both using macOS. We have the same operating system or framework for our computer, but I bet yours looks totally different than mine. We have different apps. We have different settings. We have different customizations. Holacracy is more like the operating system for your business. It's it's not telling you exactly how it should look or anything like that. It's not a one-size-fits-all, it's just the platform.

I know it was developed when you were working at a software company back in the day. Yeah, I'm curious, like, what led to this? Because one thing I found interesting is most people, when they enter a system, right, they just work in the system. Very few people look at a system and go, oh wait, maybe the framework can be changed. So I'm curious, what was the genesis of Holacracy and kind of like how it started?

Totally. Yeah. So I had been in other companies before, worked in, in typical management hierarchies. And they were soul crushing. Like, I just, I felt like they constantly resisted change. It was so hard to drive any kind of progress in any major way. It was like the whole system was set up to resist anyone changing the status quo. And that just left me feeling like there's got to be a better way, right? And so when I started my own company for the first time, my first like real software company, 20 years ago now, it was, it was to create a laboratory. I just wanted to experiment. It was for me, that was like the thing I wanted to build. It wasn't what my company did. A lot of entrepreneurs, you know, start a company because they're excited about the product or the service. And for me, I was excited about how do we build a company tinkering and experimenting in that. And we just experimented for years. And there's actually a story too that kind of became a foundational question for me. And it's a true story. I'm a private pilot. So I was learning to fly an airplane right when I started my first company. And I nearly crashed the airplane. I ended up, I was flying along with no instructor for the first time cross-country. So first time I'm in the plane with no one in the cockpit with me alone, flying hundreds of miles away. And on that journey, the low voltage light came on on my instrument panel. And They don't teach you much about the airplane hardware at this point. And 20-some hours of flight experience. So I was, I was a total novice. I didn't know what that meant. My instinct was check my other instruments. And one by one, I start looking at every other instrument on my dashboard. And every one of them says everything's fine, right? My altimeter says I'm not losing altitude. My navigation says I'm on course, plenty of fuel. Every other indicator says there's no problem. Except for the low voltage light. So what I ended up doing was deciding this probably wasn't that big of a deal, right? Only one instrument is reporting anything wrong. So I'm just going to ignore it and keep flying. Turns out that's a really bad decision. Turns out the low voltage light was tuned into information that none of the other instruments had. And I nearly crashed the plane. I ended up completely lost in a store, almost out of gas. No lights, no radios, no electronics, and violating international airspace. And when I got down, I did make it down barely. When I got down, I reflected and I realized this is exactly what's happening in all of the companies I've worked in. It's we humans that become the sensors, right? We're the instruments. We sense reality on behalf of our organizations. And often it's one lone person who tunes into information that no one else has, and they see something differently, and they have a different unique perspective, and they get outvoted because the majority doesn't see it, or the boss doesn't see it, or whatever. And that became, for me, one of the founding questions. How do I build a company where anything sensed by anyone anywhere in the organization could drive meaningful change to the flight path, if you will, to the path of our organization, to whatever it's trying to achieve? And that led me to experiment. I didn't have the answer, but I had the question and I experimented for years and years and years.

And I'm curious, like for you, like personally, where does that experimentation come from? Is that, is that something you always did as a kid too? Or where does that go back to?

So I, I had, I started architecting software when I was really young. I actually first started coding when I was, I was about 7 years old. I learned to read on software development. And I always loved the building of it, like the creation. It was, for me, it was like an art. It wasn't, people, I think, tend to think of coding often as a science, but to me, it's much more of like a creative expression, right? And I loved this, like architecting these complex systems and watching the flows of information and work and processes through them. And then when I went into organizations and eventually went into organization management in a software company early in my career, I realized these things are, the architecture is just broken and it's just insane. Like this isn't an elegant, beautiful system. So for me, it came from like taking my passion for building elegant, beautiful, real-time software systems and saying, how can we make the human system of an organization just as beautiful? You know, and that was for me, like, just extending the architecture I had done in software into the human domain and wanting a system that was just exquisite. The bureaucracies I'd been in were anything but.

I love that because I think I can sort of like see how you always look at things creatively and want to improve them. And my hypothesis is it probably extends beyond just companies. It goes to everything that you do because that's just how you think, right?

Totally.

Yeah, I had that same thing when I started doing this podcast. Like every part of it, I'm like, how do we make this better? How do we make the interviews better? All these different things. So let's actually go into Holacracy now. And I'll set the context with, we started this project, which I messaged you about before, called Love Spreads less than a month ago. And we're now, I think, up to somewhere between 10 and 15 people. spread around the world. And someone's making a documentary, someone, I just talked to someone about creating a podcast. One person's doing trailers, music, all these things. And we're dealing with what you're describing. We're like, how do we manage all of this, right? And our first instinct was, okay, who's the CEO? Who's the creative director? Who's this? So it's sort of like that's the first instinct. Where should we even start with that?

Yeah, so the instinct there is really one of getting clarity, right? That's where that's coming from, right? You need to know who's gonna do what, you know, who's gonna make which decisions. And I think the instinct often comes because as you scale, you start realizing getting everyone in the room to discuss everything is insanely inefficient. You know, you can't scale that way.

Especially when you're remote, which all the companies are doing right now.

Now it's the norm, right? And I think any problems you have with lack of clarity get like amplified by remote work, right? It's at least in an office, you can kind of just crash into each other and figure shit out. But when you're remote, good luck. So, I mean, and that's a fundamental need in organization, clarity of who's doing what, how does work get done around here? And one answer to that is, well, ideally, theoretically, we'll centralize all power in a person at the top of the hierarchy. And break it down. And that person will clarify, right? Who does what underneath them and so on. And ideally in a management hierarchy, you don't have micromanagement, right? You don't have a manager just telling others what to do. You have managers that create clarity, right? Like, which boss do you want? The one that just barks orders or the one that says, all right, here's your responsibilities, here's your goal. Within these bounds, you don't need to talk to me. You can just go do your job and get stuff done. And if you need to go outside the bounds, then talk to this person or whatever. Most of us want the empowering boss, right, that creates clarity over the one that just tells us what to do.

And I think the thing I would add too is like, like, frankly, as a creator or, or more of that archetype, we don't want to be the micromanagers or the managers because we'd rather focus on, on the creative aspect of things.

Yeah, who wants to be— I mean, that's to me the difference between like an entrepreneur or a creator and a manager. I don't know many people who aspire to just being a coordinator that tells other people what to do, that, you know, that's not very fun, especially not for those of us that do come from the creative, you know, background. So, um, so you need clarity in that. And that's the instinct to start getting titles, but titles don't do a great job of generating clarity. They're, they're rough instruments. And so this is, uh, one of the, the things people misunderstand about Holacrisis. When I first introduced it, I said it's a framework for organizing a company without a hierarchy of managers. Often people think that means there's no clarity, but it's actually the opposite. There's more clarity and more structure than a management hierarchy. In fact, that's how you obsolete managers. You get really clear on who does what, so you don't need somebody top-down micromanaging. So holacracy is a role-based system, and it focuses on clarifying in a lot more depth who's doing what, who makes which decisions, what decisions can you make without calling it. What decisions do you need to check in with someone else for and why and within what bounds? So the whole focus there is creating clarity. Um, and that's something I think any business needs, any organization of any sort, even if you're just, you know, creating something with a few friends or whatever, there's some need for clarity.

Mm-hmm.

And in smaller groups with really close people, you can default to just, we're all gonna talk about everything, but that's really inefficient. It doesn't scale and it gets really frustrating really fast. You need to get more clarity on what you can do without talking to people, right? And you have a choice. You can centralize that power and break it down the hierarchy and hopefully create clarity, or you can use a framework that invites everyone to get involved in the clarity creation process, which is what Holacracy is. Everyone on the team gets involved in creating the clarity of how does that team function, who makes which decisions, and what are the bounds on authority.

And is that— that's interesting, sort of like you've abstracted away to what is actually the purpose of creating structure, right? Which is like, right, clarity and moving things forward. That's what a company exists to do. Where, I'm curious, like, I'm sure you've researched this, like, where did we come up with this concept of having a centralized structure as the answer to that question?

It works great when complexity is lower, right? So the modern management hierarchy and kind of the modern form, obviously hierarchy goes way, way, way back, but In, in like a company management context, it really showed up when we had the telegraph actually invented. So, so just to pause on that point, the way we manage companies today was an exciting new innovation when the telegraph was created and it hasn't changed much since then. But parking that. Yeah, the top-down management hierarchy, it came with the telegraph because suddenly we could scale efforts on a much wider geography, right? Right? Which enabled and required more coordination, more alignment, which is another function aside from clarity is coordination and alignment. And so we started using this more of what we now currently think of as the norm management hierarchy, but it was newer back then in that form to coordinate, align, and clarify at scale these bigger enterprises. And it worked great when you have low complexity and the pace of change in your environment is relatively low. It works. It's simple and it works. Ironically, I'm a fan and my work is all about removing and moving past the management hierarchy, but it's not coming from a, it's fundamentally broken. It worked beautifully for the world we had, but the world we have today is radically different. And one of the simple thought experiments I often invite people to do is imagine you were an executive running a company 100 years ago. Right? In 1920, you're, you're running a company. How much do you have to deal with in a day? How many messages inbound to you do you have to use your attention on and process and deal with? And compare that to today, right? How many messages do we all get bombarded with? How many things demand our attention? The complexity in our environment and the demands on us has skyrocketed. The pace of change is faster by orders of magnitude than it was back then.

For those listening, by the way, I'm smiling as you're saying that because literally right before this, I was on my phone Slack and like there's WhatsApp messages and all of that. Yeah, so true. Oh, I know.

I have more inboxes today than I think they had messages 100 years ago, right? I have inboxes today that are flooded. And it's not just that, the complexity is inside as well. It's that our organizations today are so much more complex. It's like we've shifted from a simple, more machine-age paradigm where the business could be more like a simple mechanical invention to now an organization, even a tiny one, is more like a living system. It's massively complex. There's so many flows and processes in it. The environment's more complex. And for that, I think it's just demanding a new way. So where the management hierarchy came from, it came from a more mechanical paradigm era in which that was sufficient to manage a business.

And I said, go into that thing, like, um, part of it is also because really like what we were doing was almost like creating like cogs to work in factories. Like that's all we needed. And now it's so much more creative and informational work.

And that's a generational change too. Look at grandparents' generation. They were happy just to have a job that paid money to put bread on the table. But when was the last time you talked to like a millennial who said, I just want a stable job to, you know, pay the bills? No, they want meaning and purpose and creativity. freedom, and our organizations need them to have those things, right? We need that. We need people unleashed to use their creativity. And so we need to find a way to harness this, and those people demand autonomy, and we need more clarity so that we can give them autonomy. And we need new, new, new ways, I guess, as well.

I love that. So, so let's say someone, because we could spend a lot of time on like why Holacracy makes sense, and I think, I just think it does, and we might come back to that. Let's say someone's listening, they're like, yes, we want to do this, right? And Kind of like what I was describing, they have the organization structure already, or they're trying to. So what's the first step? Yeah.

So, and this is one of the challenges. Holacracy is a big shift from what we're used to. It's a really different way of getting to clarity and organizing a company. So first step is just learn more about it. There's a lot of free resources on our website, holacracy.org. There's my book, which goes into more depth. None of that is to like learn it in depth. I mean, any more than like, I like to think holacracy is like a sport or a practice, like music. You're not going to learn to play the piano by reading a book about it or learn soccer by, you know, watching videos on a website, but at least you'll have some idea of what it is.

One of my favorite things actually that I was up last night, I think like 1 or 2 AM reading was the Constitution. And I just love the way you've sort of like framed that and described that. Yeah.

So what you're pointing to, holacracy is a constitutional power structure. So once you've gotten some sense of what it is, you know, you've dug in a little bit, um, then when you're ready to actually adopt it, it involves whoever holds power in the company. Could be a CEO or in a case like a small founder group, a few people, whatever. Whoever holds power signs the Holacracy Constitution. They effectively cede their power like a king ceding power into a constitution that says, instead of me being at the top of the hierarchy and all that that entails, I'm going to use this process that invites everyone to participate in the power of this organization. And so we have a constitution with Holacracy. You don't need to write your own. There's a generic document that's used by thousands of companies now. So you adopt it, you adopt that constitution, and that constitution defines a governance process. And that's the process that every team will use to figure out what are the roles on the team? Who's going to do what? Who makes which decisions? The policies of the team, any governance of the team comes through that governance process. So the constitution doesn't tell you how to run your specific company. It doesn't tell you that you should have a marketing role or a sales role or whatever. It just says, here's your governance process to figure through all that. And it's a defined process and everyone can get involved. So when you've got the constitution adopted, you then have some initial structure, you have some initial roles, and it's actually not that important what they are. You don't need to clarify your roles and make them perfect up front. Because the goal is to learn over time and clarify as a team over time how you work. So rather than try to get an upfront design, Holacracy gives you a mechanism to evolve your organization. It's more of an evolutionary system. So the key then is learning how to do it. It puts in place this governance process, and that's what you do to then start evolving. So most of it then is a learning curve of how do you, how do you engage in this governance process? How do you use it to clarify your roles? to clarify the boundaries between who does what.

So 2 questions that come up, and by the way, my brain's literally like on fire right now hearing you talk about this 'cause I wanna experiment with this. One is when you're thinking, you mentioned sort of like ceding power, right? I know there's funded companies that have also adopted Holacracy. I'm curious like how does that play with ownership, especially if you have like investors involved?

Yeah, so your investors don't actually need to know. I'm not saying you shouldn't tell them, but they don't need to know. If your investors are trusting you the CEO or founder or whatever to run the company, that's perfectly compatible. You can just say, I'm running the company by adopting this constitution because I think it's going to get better results. And frankly, if holacracy doesn't give you better results, you should throw it out and go back to management hierarchy because it's not for you. So an investor shouldn't care. And we've seen this many times now. The investor really doesn't care about the details of how the CEO runs things, as long as they run things pretty competently and get results. Holacracy is just one strategy, one framework for how you can break down work and run things.

And in terms of like power and ownership, so like the ownership still stays with the founder. It's just that power has been ceded.

Right. It's independent. So you, you, you can adopt holacracy in a company that's owned entirely by one person, or you can adopt holacracy in a cooperative model where everyone literally has an equal stake in this thing, right? Or anything in between. So holacracy is, is really agnostic, which To me gives an interesting piece of the puzzle because I've seen plenty of companies that are either either a small group of founders that you know split the the equity or that are actual like more full either cooperatives or employee-owned businesses or whatever. And the irony is in any of those structures, if they've adopted the traditional management hierarchy, then their ownership structure has you know more people involved. But the actual power structure is incredibly traditional and conventional, and that creates problems in founder groups. We have a few founders that. don't have that clear leader among them, or it's more like no one wants to be like the CEO. You have a, you have a group of people here that are kind of all business partners, right? Or in the case of cooperatives or employee-owned businesses or whatever, you just have misaligned the entire operating structure with the ethic of the ownership structure. So Holacracy gives you an alternative that really focuses on, on inviting everyone to be part of a power structure and distributing power so that everyone has real clear leadership power of their piece of the business. And then a collaborative governance process to work together. And Halocus is both. It's clear power to everyone for their piece of the business, but also a collaborative process for how we align and work together.

And the thing I love in that is, and again, this is what I'm seeing is like, there's all these assumptions that we make when starting a company that you've questioned, right? Because most people, when they start a company, ownership and power is the same thing. I own 60% of the company, so I have 60% of the power. Yep.

And in practice, even that's just not true. Like even a 60% founder rarely just says, well, I'm going to use my 60%, you know, vote to dictate everything, you know, that you wouldn't be in a business with somebody else owning 40% if that's what you wanted, right? And likewise, like how many times does anything get decided at the board by an actual ownership vote? That doesn't happen. It's just a terrible way to run things, right?

So you need a different power structure regardless of what your ownership So we're going to take a quick tangent and come back to this because this brought up something that was, again, brought up by your partner, Matt. He talked about, he asked me to ask you about a vision for distributing power even when not everyone is ready for it.

Yeah, I get this a lot actually. And I have a few things like sometimes people say, hey, most of the people in my company or whatever, or the people I know don't seem like they're really ready to step up and lead their part of the business. You know, they're used to getting told what to do or whatever. And I think sometimes the assumption is that that's something about the people. You know, they're either, they're too lazy or not mature enough or not whatever. And I, I always, that seems so strange to me. I think it has more to do with the environment that people are in most often, not always. Some people really aren't ready for that. But our environments today in a management hierarchy, we treat people like children. Right? Like the whole incentive structure is set up so that you get ahead by kind of doing what you're told, being a good soldier, not taking on too much leadership, looking good to the boss. We are training people not to find and use real power, and we're punishing them when they do actually go beyond that. And that environment, when you treat people like children that need to be told what to do and managed, you get people that kind of act like children sometimes. And maybe that's more a function of the environment they're within. And I see this all the time when organizations do adopt holacracy. There's so many people that many people didn't think were ready for this that just step up, right? When you give them real power and real responsibility in an environment that supports it, and they take it on. It's like I had an old college buddy that he was kind of the most irresponsible person I hung out with in college. And one day he told me he, his wife was pregnant, and they were gonna have their first kid. And I thought, Oh no, this is a guy that should never have that responsibility. Right. And, you know, he turned into an amazing father. And, and I asked him like, what happened? It was such a dramatic shift. And he said, I had real responsibility for the first time in my life and I rose to it, you know, and I see that in environments and companies all the time, not from everyone, but from a lot of people. And that's not to say that there isn't support needed, right? That's a hell of a transition. And yeah, sometimes people struggle with taking on real leadership and real power, and the holacracy kind of gives it to them. So they're going to have to figure that out. And there's lots of ways you can support people with that. Mentoring, you know, we have a role in my company that's just there, not, they don't have any authority to tell anyone what to do, but they're there as a mentor for new people so that they can get into the system and figure out how to really lead.

Let's actually talk about that because I'm really curious. In a company, that's structured like this, what does support and mentoring for people look like? Because I've only worked in corporate America for a year, but it was usually like, you're in this role, so the person one or two levels higher, they kind of become your mentor, right? And yeah, I remember being like, but maybe there's someone else who could be a better mentor. So in a system like that or a framework like this, how does support and mentoring What does that look like?

So the first thing, I guess, to clarify is, uh, one of the things that Holacracy's governance process does is clarify the roles, right? What are the roles? Who's doing what? And what authority do the roles have? And what are the boundaries or the limits of authority of the role? And when, when you clarify that, then it gives everyone the freedom to lead their piece. So it's kind of like you have a team full of people, each of which is like a CEO of their own little business within the broader organization. They have a lot of autonomy and a lot of power in their part, but they also have clear limits and clear responsibilities to others. But holacracy doesn't tell you what those roles should be. It just gives you the framework for creating them and evolving them, right? And a language to describe them. And the same is true of things like mentoring roles, right? So holacracy doesn't answer that. It doesn't tell you, here's how you should do mentoring in this kind of company. What it does though is say, hey, do you feel any tension about mentoring? Tension is what drives change in Holacracy. So if you do, if you're feeling like, hey, I need a mentor for this, like I'm new to this kind of work or whatever, then you can show up in the governance meeting and you can propose a new role and propose to create a mentor role. And that's not the same as hiring someone. In Holacracy, we fill lots of roles. So I fill 20-some roles, right? So it's just saying there's a function that's needed here. You know, I need somebody to fill this role. And then there's another process to figure out who should fill it and all that. So Some companies create a mentor role. Others create like a process for that in some way. But there's no one-size-fits-all answer, right? What Holacracy gives you is a framework to take any tension you feel, whether it's we need better mentoring or we, our budgeting process is broken, or, you know, someone needs to sell things differently than we are now or whatever. It gives you a way of channeling that tension into clarity and evolving your organization structure and your roles. So I've seen like 100 different solutions for how to deal with mentoring, but what they have in common is it's disconnected from the command authority. So if you create a mentor role, it doesn't have the authority to tell you what to do. It's there as a mentor, just like in life, right? You might go get mentoring from someone, but they don't have command authority to tell you how to lead your life.

In some ways, I think this interview is going to turn into sort of like a, what a Holacracy system looks like with like us going on all these tangents instead of a linear thing. 2 questions came up there, which is one, you mentioned you've seen a lot of creative solutions. Can you share some of them? Let's start with that.

Yeah. So I'm going to answer a slightly different question because I think the example's more interesting. So mentoring's pretty simple, but what about the harder things like firing, right? Or compensation, where it's not just like, I give someone some advice and mentoring, but what happens when it's not just mentoring, but sometimes you have to fire people? How does that work? Right. Um, and so then the interesting thing, I, again, holacracy is no built-in answer. It just gives you the way to experiment and evolve. But I can tell you, my company has an answer that's been copied now by dozens of others because it's a pretty cool answer. And I could genuinely tell you, I love the way we fire people. And I don't know many organizations that can say I love the way we fire people. And as an entrepreneur, I love this too, because let me tell you, as a creative entrepreneur, I didn't ever want to be in management to have to make decisions like, how do I hire people? That sucks. Now I have this answer. So here's, here's our way. Again, different companies do it differently. Our way, um, when, uh, so anyone in the company can call for a quote partnership review for anyone else. So any of our partners are people, right? Anyone can call for a review of someone else's partnership.

And when you say, sorry, quick thing, when you say anyone, What you're saying is there's no like different levels, like anyone's on a flat level, right?

Anyone in the organization can call for a review of anyone else in the organization, even on me, the founder, right? It doesn't matter. Anyone can call for a review of anyone else. And, um, and this has happened. We've had people that like, they weren't founders, they were just, just people. In fact, our last one called was somebody that had been at the company less than a year. You know, what you might call more junior-ish roles, not that there's a hierarchy, but just You know, she was earlier in her career. She called for a review for somebody else that she just didn't think maybe it didn't make sense to have in the company. And when that happens, there's 5 people in a role, partnership assessor, that role is there to help assess that.

Quick question on that is, for roles like that, like who decides who's in that role?

Yeah, so there's a separate process for that. And it might be one person that has that judgment call, right? In our case, it's It's actually not. It's if you've been at the company a certain amount of time and you have invested in our equity, you have to have a certain amount of equity, then you can just opt into that role if you want to serve in that way. A little more to it, but that's the basics for us. But again, every company does it different. So, and that's just for this role. Other roles, you don't need that. It's much simpler, right? If I'm trying to assign somebody to our, you know, marketing role or whatever, I don't need that kind of complexity. I just need somebody who's going out and being a talent scout and figuring out who's best. So anyway, uh, in this case, the 5 of us filling this assessor role, each of us can invite other people into the process. So if I know that somebody's worked closely, you know, with you, if it's the reviews for you, someone's worked closely with you, I can invite them into the process. Then, uh, we have to answer a question at the same time. And I love the question. I used to, earlier in my career, I would ask myself, should I fire someone? And that's a horrifically difficult question to answer. And I actually find it works better to never ask that question. So our process is, uh, we, the 5 of us and whoever we've invited simultaneously answer the question. If you knew everything about the person that you know now and they didn't already work here, would you advocate for hiring them?

Right?

You know everything you know about them and they don't work here. Would you advocate for hiring them? And you have 3 possible answers. Clearly yes, I would advocate for it. Thumbs up. Uh, clearly no, thumbs down. I would advocate against hiring them. Or thumbs sideways, neutral. I don't have a strong feel. I wouldn't advocate either way. And we all throw that answer simultaneously. And then the rule is, uh, so after we do that, we have some brief time to explain our answers and then people can change their answers or whatever. But at the end of that process, you need more thumbs ups than thumbs down. Um, and if everyone's neutral and you don't have anyone that's an advocate, that means fire, right? So you need more thumbs up than thumbs down and at least one thumbs up to stay in. But we don't immediately fire the person if the result is negative. We tell them, we tell them the result and we tell them, you know, if you want, you could take a couple of weeks and talk to everyone involved in that process and you can try to give them information. Maybe you think they're missing something. You can make new agreements with the company. Like maybe you want to agree on a plan to change things if you want to. And if you request it after you've had those conversations, we will throw out the result and redo the process, which puts responsibility on that person to decide how do they want to proceed? Do they want to just accept the result? Some people do. Do they want to have those conversations? And do they want to try to change people's minds? Do they want to make a plan and say, here's how I think I can be so valuable that you would want to hire me? Please redo it. And we've had people fired through that process who came back and became our customers. We've had, um, I had, I had one guy, uh, a friend of mine, I, I was involved in firing. I was one of those 5 people and he stayed at my house over Christmas. Um, and he stayed here for 2 weeks as he was new to Austin and all that. And I consider him a close personal friend and I fired him. I was involved in that. And it's because the process itself treated him like an adult. It treats people like a, a business partner, right? There's a conversation. It's transparent. It's open. It's a clear process. And it's not centralizing the power in one person, right? This is an example. When you don't have managers to fall back on, you have to get creative. And I think the process works better even in a management hierarchy because you get more perspectives, more input. Treat people like adults. You make them part of the process of figuring out what to change if they want to stay.

So, and it's not like one boss that's deciding, right? And again, so now we're gonna move a little backwards because I can see how a lot of this is dependent on hiring the right people or having the right people within the company. So in sort of this framework, how does the hiring process work?

Yeah, it's again one of those things, everybody's a little different, but what it does, it changes what you're looking for, I find. In most companies, you named this earlier, you're kind of looking for a cog before the machine. Right.

Or you're looking for different roles, right? Like even when I'm thinking about this project, I'm like, oh, we need someone to manage partnerships and we need someone to do this X thing.

Now it's more like you're courting a co-founder. And I've founded a few companies now and I'm pretty familiar with that process of like finding a business partner. It's kind of like that. It doesn't have to be at the same level. There are people that are going to fill more low-level roles, but the energy and attitude is similar. It's like, I'm looking for somebody where I might know a few roles I want them to fill to start, but those roles could change and they could grow into other roles. So what I'm really looking for is somebody that's going to come in and take ownership. And I don't mean financially, I mean of their work, be an entrepreneur. I'm looking for someone that can build, you know, so I want more, I'm emphasizing creative capacity more. I'm emphasizing maturity.

I'm emphasizing ownership and entrepreneurial Is that because like that's sort of like you require those to work well in a framework like this or?

Um, it's more, yeah, it's, I would say it's, it's not like a type of person is going to work better or not. Like there's some people that really like, you know, structure and other people that really like creative freedom and both of those work fine. There's a maturity thing. It's people that have, are more capable of dealing with complexity or people that are more capable of taking ownership and like leading something, whatever it is. in whatever style or way they want. The style doesn't matter, but the maturity does. So those, the people with more maturity are going to be able to leverage the system better and adapt to it because it's a big change from what people are used to.

And how do you test for that? Or how do you, as part of the hiring process?

What we do is invite people to, to, so we're a virtual company, but we come together, at least we did pre-COVID, come together a few times a year in these big retreats. We invite candidates to join us for a few days of those retreats and just work with people. So we actually get hands-on for a few days with somebody creating with them, have them build something, give them a project. Sometimes we engage them as a contractor for a month or something before we decide or whatever. I find getting them hands-on and doing with them is the way I learn most about somebody.

That's actually been one of my favorite. I've talked about this so much and it was actually for a role I did not get. It was, I was, I think it's almost been 10 years now. I had applied for a marketing role at this company called Treehouse. And I got on a call with the founder, Ryan Carson, I think. We talked for 6 minutes. He's like, okay, I like your background. I'm gonna give you a test for a week and we'll obviously pay you. Do you wanna do it? I'm like, done. And it was so interesting, right? 'Cause he just like got down to the work. Are there patterns you've found maybe that tell you that like someone's— 'cause what I'm thinking is if I create a hiring process, right? And we have like 100 people come in, we don't wanna give almost like a test or something to like 100 people. So are there patterns or things to look for that inform who would work better? Yeah. And feel free to change the question if— no, that should be asking a different question too.

Yeah, it's definitely more art than science for me. And maybe there is a science to it. I just haven't figured it out, but I trust my intuition. I'm not sure if that's a good idea for everyone, but I've been working in companies like this that give people a lot of autonomy. I've had business partners for decades now. So for me, it's, um, I've just developed a sense of somebody, uh, which I can't tell in a, in an early interview, which is why I want to work with somebody as well, because, you know, anyone can wear a mask for a while, but you get them working with them, it's harder. Um, but how do you filter them down to get there? I look at how they show up. I don't look at resumes. That's one thing I do. I just forget resumes. I don't even look at them. What I do is ask essay questions for somebody who wants to apply. That way I get to read how somebody thinks, right? And the questions are designed to kind of get me some clarity on how this person just thinks and looks at the world. I find that's really useful. And then I go a lot of intuition just based on reading those about who to go further with. And then sometimes referrals, you know, just who do I know that knows somebody that they'd vouch for? I think those are more and more important in this kind of environment.

I love that. One thing that's been interesting for us is as we're sort of like bringing on more creative people, noticing who's coming with ideas? Or like, as we're talking, they're like, oh yeah, what if we do this? Instead of who's waiting for us to tell them what to do?

Yeah, totally. Yeah. I'll look for people coming with ideas or people that are, uh, where their creativity is in the execution, but they're still not waiting to be told what to do. They're like, they'll hear an idea and they're like, oh, okay, cool. That means we need to do this and this and this. And then we have this structure and this concern that those people I want too. I'm looking for different kinds of creativity as opposed to somebody waiting And waiting for orders.

Yeah, I think there's sort of like an assumption in this whole process of like just not wanting to manage too much, right? And so that's why like you want people who aren't going to come to you being like, what should I do? And all these things.

I want self-managed people because especially for Holacracy, it's a self-managing environment. You need people that are capable of individual self-management to be part of a team that is self-managing, right? That's what I'm looking for. Can they manage themselves? And because frankly, that's what started this whole journey for me. I don't want to manage people anymore. I'm sick of it. I'm done with it. I want to focus on my creative expression and not managing others. So I need people to self-manage.

I love that. When you're talking about the hiring and the essay questions, I'm curious, like, what are some of your— because I'm sure you've probably tested the questions and stuff you ask too. What are some of your favorite questions to ask now? And also, like, What are maybe questions that you asked before that you thought would be really good, but you stopped using them?

Yeah, interesting. God, if I can remember. One of the ones we ask now is something like, you know, tell us about a time you screwed up, you know, tell us about a mistake and one that especially you got a lot of value from. You know, I find that really interesting to see how people make sense of their mistakes. Another one we asked was, what is it? Something like, let's see, tell us about a mistake or time you failed. Oh, tell us about like one of the times you succeeded.

And Why?

What made it good? The opposite side of that is, but I find the failure questions. Another one is, um, how I think we had something that was a really broad question once. It was like, if you could change anything at all about the world, what would it be?

Or something.

And there it's like, I want to, I just, I like seeing some of these humanity, their personalities, what they care about come out. Although I don't know if that was, I liked that question a lot, but I don't know how useful it was. I got a sense of something, which I I think has utility, but I don't know. Oh, one of them I love right now. How familiar are you with Holacracy? That's just a really interesting one. And then, you know, and tell us about your connection to it. I find it fascinating how many people think they're insanely familiar with it when they have no idea what it is, right? Like that one's interesting. You need to see something about humility in there or something. I don't know. And yeah, I don't remember what the others are, although you can always find them on our website and click click apply and you'll see the questions.

Humility is interesting. One of the things I'm working on right now is creating this community. And what we're trying to sort of test for is humility and people who are givers. And that's been an interesting one to figure out is how do you structure questions that can lead to that? I haven't found the answer yet.

No, me either. What I used to do that worked best for me in my software company, my last company I ran, was It wasn't through the questions. It was after that phase for our interviews, we would invite a group of people all together and we'd give them a project to work on for a day together. It was a little simulated project. And, uh, what I loved about this, what they didn't know is they worked as a team, but the project was set up to fail. There was no way they could possibly succeed at the task. Um, and we had one of our staff members was role-playing like the client of this team's project. And, uh, she was a really good actress and she would just start freaking out more and more throughout the day. And like, and the project would be, it was a disaster. I mean, we set it up so that like whatever happened, she had something she'd throw in the mix and it would crash and burn. And, and then we would debrief people and we would see who, uh, just tried to find someone to blame for it, right? Like who would look at other people and say it was their fault or whatever. And in the meantime, when things started getting stressful, Who would just try to like take all the credit or take all of the, you know, responsibility even in a way that was not healthy versus who would like look in the mirror and say, wow, what did I do that could have been better? Who would like, you know, have generous views of their coworkers? We learned more about people in that one-day interview, I think, than I've ever found. I mean, sometimes that I learned about somebody months on the job, um, just from setting up a project to fail miserably on them. And, and it worked on a whole group of people at once, so it was pretty efficient. It wasn't just one person, it was like a whole group came in for a day.

I love that. And it kind of reminds me of how like even like fraternities, um, when you go through that like pledging process, I think, I think there is something where to the fact that like when, when people go through a shared experience together, Yeah. When it's not all good, you learn so much about them.

We didn't actually initially set it up to fail. We set it up to succeed, and then we had a group fail, and we learned so much more about the group that failed, we then changed the whole design and made sure everyone failed.

That's amazing. I'm gonna say, so sort of like, given your experience, let's say like a company has implemented or starts implementing Holacracy, and you've worked with thousands of companies now, right? What are some of the— let's say like in the first like 30 days or 90 days or a year, what are some of the most common pitfalls or things people should watch out for or avoid?

The biggest ones are falling back into old habits. Holacracy is such a deep change, and it's changing the way people relate to power, including their own power and other people's. And it reveals how much people are maybe disowning their own own power or directing others, and it happens on both sides. So, um, one of the things, even just simple things, notice how much people defer to whoever they think of as the old boss, even when you've tried to shift the power structure, right? Holacracy, there are no more bosses. Everyone's the boss of their role. And yet I see eyes in the room turn back to the former manager to almost kind of bless the decision, right? And, and I see the former manager, not even consciously, they're not wanting to direct the action, but everyone's looking to them. So they say, Well, here's what I think. And then everyone takes that as a command, right? It's fascinating how much this happens. We're working actually with a government agency right now, a major one. And, and the director general of the government agency, everyone's looking for his approval for just about everything, even though he's the one that said, no, we're doing holacracy. Stop looking for my approval. Everyone just defaults to it unconsciously. You'll have people in one breath say, this is great, we have so much more autonomy. And then their next breath is, oh, I should make sure that, you know, the DG, Director General, is okay with this. Um, so there's, there's a, uh, one of the challenges of it is noticing how much those habits fall back to the old habits of deferring to power. And to, to catch those, there's usually a Holacracy coach involved. Maybe it's an external coach, maybe it's an internal person that's kind of trained up to be the coach. But there's a need to catch those things. Um, and, and the other one that's even more insidious is defaulting back to searching for consensus. And this, I see it in, in healthy, good teams all the time where they're used to not making decisions autonomously, but calling meetings for everything, talking to everyone and getting everyone's buy-in before they go act. And there's often a nervousness to lead alone. without everyone agreeing with everything. And this happens especially in small organizations where you get just the default is get everyone's buy-in before you act. And that one's insidious. And I'll see that habit. People fall back to that old habit when what Holacracy is trying to do is push away from that and say, no, use the group to get clarity of who makes which decisions, not to get buy-in to every decision, right? Holacracy's governance process is a group process. But we don't use it to make every damn decision in the company. We use it to get clarity who should decide what so that person can go and lead without talking to the group about everything. So watching for that slide backwards to consensus is probably one of the biggest challenges.

And for both of those, it's interesting because it's like, it sounds like they're both like very like individualistic things, right? Like we're either like looking for someone for approval or we're like trying to make sure that Everyone agrees with us, which is like, do we belong or whatever? So where do you think that comes from? And 2, like, what are ways you've helped people get over those fast so that they don't slide back like you said? Yeah.

And I think, so there are different places it can come from. One of them is just really practical. People need to get work done. They're used to getting work done in an old way. They're used to getting work done and being a good contributor by making sure they're aligned with their boss's vision. Right? There is a healthy aspect to that in a management hierarchy. Or as a manager, they're busy and people are coming to them and they're more experienced. So it's natural for them when somebody asks their opinion to just give an answer and not even intend that answer to be a dictatorial direction, right? But everyone involved takes it as that. So some of it is just an honest, like, people just want to get their job done. And, you know, they don't know how to use this new system. It requires a a major behavior change. So they just default back while acting quickly to behaviors they know they're comfortable with. Another thing it can come from is, is the, the fear of stepping into leadership, especially the consensus one, right? I even see this from the boss, right? Often the bosses are just as much complicit in getting everyone's buy-in as everyone else. They just have easier time getting buy-in. But even they will default back to this. So that, I think, sometimes comes from like the, the fear of being seen, the fear of standing up and saying, no, I'm going to lead this, right? Um, and, uh, it's often, uh, people think that that's being a good collaborator or a good team member, but you can still get input from people while owning your power. And I often will tell people like, it's a little thought experiment. You know, imagine, I don't know, you're the website person or whatever in a company. You know, which of these people do you want to work with or do you want to be? You know, the one that says to the team, hey folks, you know, we need a new website platform, so what do you all think we should use? And defers their power to the group. Or the guy that comes in and says, hey team, in my role of website manager, I need to choose a new platform for the website. And so I'd like to get your input on key needs so I can integrate that and I can go make the best decision possible. I'm going to lead this, right? Which one do you want to be? Which one do you want to work with? I have yet to have anyone tell me the former, right? Most people want to be and want to work with the guy that still does collaborate. You get input when that's useful to the decision, but you don't hide behind the we. You don't hide behind the group. You know, you own your leadership, you own your power, and you get input when it's useful so you can lead your part. And if everyone's doing that, the system moves So much faster. And then we're gonna have times where there's people stepping on each other's toes and that's what the governance process is for. So we can start clarifying how do we align with each other?

Yeah, I love this. I'm curious, like from, and if you can maybe share stories of some of the companies, especially like if a company's like really big or they, like you said, like they already have their structure and there's work to be done and all, what does that switch or move look like in terms of like, timelines and how they do it and how hard it is and all of that, because it almost sounds like it's another job, right? It's like you have your job and then you have to do this too.

Yeah, totally. It is. It's a huge change. And that's the downside, right? This is a big, big change from what we're used to. It's easier to do the smaller the company is. So if you're a solo entrepreneur and you're about to hire your first person, it's the easiest possible time to adopt this. If you are a multi-thousand person business, and there are several now that have adopted the Holacracy, it's a really big change. It's hard. I think timeline-wise, I love the way David Allen captured this. He's the author of the book Getting Things Done or GTD. He's on my board and he was one of the early adopters of Holacracy and wrote the foreword to my book. And in the foreword to my book, he said, and I remember this, he said when he first encountered this, he said that one of the best realizations he had that really helped prepare him for it was he said, this is not a quick fix. This is a 5-year change. And then he's been doing it about 8, 9 years now. And about 5 years into it, I had a conversation with him and he said, yeah, I was wrong. I'm now going to say I was close, but I'm going to say it's a 10-year change. Now that doesn't mean you don't get ROI sooner. You know, most teams find after about 6 months of investing in this new way of working, Things are more efficient than they used to be. So there is a much faster path to getting some return on your investment that starts paying for itself. But as far as this level of change, you're radically changing the way people relate to power and the way they lead and the way they follow, the way they structure work, the way they figure out what to do and relate to each other. It's a massive change. It takes a long time. It's many, many years to really get to this kind of self-managing environment.

And I don't know if this is related, but I think it might be, which is, can you talk about like the, as leaders who sort of like institute this change, and maybe if you can share stories, some of the personal transformations people go through? Because as you're saying, it's like, it's about power, right? Which to me tells me there's sort of like a relationship with your personal ego that you're changing in there.

Yep, absolutely.

So can you share stories maybe of like, maybe your own or other people and what that looked like? Yeah. Yeah.

I love those. Um, one of the, one of my favorite ones was somebody, um, was working at Zappos and she came up to me, uh, had been doing Holacracy for a few months and, um, I got really excited. They went to our training. We have a 5-day training that we did. She went to that and she came up to me during that training and said, I finally got it. It took 3 months of Holacracy practice and I finally got what my therapist has been trying to teach me for the past 2 years. And it was about owning her own, uh, tensions in her relationship with her, her significant other, um, and not like projecting on him and being codependent and making him solve her stuff, but taking ownership, leaving space for him. Um, she had a whole story to it, but I love that 3 months on the job gave her more personal development than 2 years of therapy. And, uh, let me— here's another story to kind of illustrate, I think, some of what she was experiencing. This is a story from my own organization, and it illustrates to me the beauty and power of our governance process. So I fill a role right now. I'm filling this role we call Holacracy spokesperson. I get to go do interviews and I speak at conferences and stuff. My role has a purpose. Every role in Holacracy has a purpose. It's a purpose-driven system. I'm spreading Holacracy. I work with another role called casting agent. And our casting agent role has to figure out which opportunities to send me to, especially conferences when I have to travel somewhere and it takes a lot of time and energy. So our casting agent negotiates with the conference organizer. Here's what actually happened in this situation. Uh, the woman that filled this role at the time, she was spending a lot of time and energy building a relationship with a conference organizer, negotiating a whole deal of what I would do and all that. And at the end of her process, she would present it to me. And I would say, nope, I'm not going to do that. I'm not going to go, right? It's either the wrong market or the audience isn't big enough or whatever. And she felt so disempowered, right? Imagine the frustration. She built a relationship, she spent hours and hours negotiating, and then I just shoot it down with a no at the process. I'm not going to go. So what actually happened, she showed up in our governance meeting and she proposed a new expectation on my spokesperson role. She said, I want to expect the spokesperson role is accountable for documenting the criteria you use to decide what engagements you're going to accept and go to or not. She said, because if I could see that criteria in advance, then I could actually assess it myself before I spend all that time, right? And it took 2 minutes in our governance process for that expectation to get added to my role. And then she was able to turn to me and say, so when do you think you'll have that done for me by after the meeting? Right now, the interesting footnote to this story, I'm the founder of this company and a seasoned entrepreneur and CEO and all that. She was our newest hire right out of college, right? In what organizations do you know where the newest hire right out of college in 2 minutes can add an expectation onto the founder and then turn to him and say, so when are you going to have that done for me? Right? Like, that doesn't happen in most companies. And in ours, not only did it happen, there were no politics. It's not about the egos of the status of the people. It's about she has a role, cast manager. I have a role. Her role needs to expect something from my role. We have a whole language and a process to navigate and define the expectations of our different roles together that doesn't require egos, doesn't require playing games and politics to get there.

Right.

That is so deeply empowering, and it's training her for one of her first jobs out of college. Right? It's training her how to really own her own power and get her own needs met, right? And take care of herself instead of complaining to a boss and being a victim, hoping the boss solves it, right? Like, that's empowering, that's changing. So I look at those kind of— that kind of practice, the personal development it triggers in people, I find remarkable. And I hear this again and again from people who tell me they've grown more in, you know, whenever, a year of doing Holacracy than the last 5 years of their life.

I love that story. And I'm sure it sort of like also relates back to what we talked about hiring in terms of you want to hire people who would do that and bring that up in a meeting. So one thing, like, if someone's listening, and I had this thought before too, which is if you have a company without a hierarchy, my assumption before we honestly kind of came out was like, Well, everything's going to be happening and I want to know what's where and it's going to be a mess. And one of the things you mentioned in our research was it actually creates more order, structure, and alignment. Can you talk about that?

Yeah, so there's a software tool used by most companies today doing Holacracy. It's built for Holacracy. It's called GlassFrog. And I wish, I know this is a podcast, so I can't show it visually, but it's so cool to see. And you can see my company's records in GlassFrog.

It's all transparent for, Not every company is, but if you want, by the way, we could do another session just going through that because I would love to see that.

Oh, it's great. Yeah, it's really cool. And it gives you like this organic view of the entire structure of your company. It looks like a living system of cells within cells within cells, right? And every one of those cells is a role and every role has a purpose and there's expectations on the role and something the role controls maybe that others, you know, have to defer to the role for or whatever. All of that is transparent because it's the output of our governance process. So what Holacracy does is give this learning process to every team in the organization, and the output of that learning process is clear structure and expectations. So you have an unprecedented view into how your organization functions and everything that's flowing through the system, right? So as I was a CEO in a management hierarchy before doing this Holacracy thing, I have so much more visibility now than I ever did as a CEO. And ironically, I have more control. This is another misconception I often get asked, like, how do you deal with giving up control? And I say, you've got it wrong. I have more control, not less. The difference is, so does everyone else. Everyone else has even more control. Holacracy is not about removing power from the former CEO or whatever. It's about raising power of everyone else in the system. I still have the ability to get my organization's needs met. I can change processes, I can change roles. I just have to go through a governance process to do it, just like everyone else. Now everyone's involved in learning and iterating on the design of the company, the structure, the roles, the process, and it's all transparent and clear. So now it's like, instead of me being the solo CEO trying to do that, it's like having a team full of CEOs all working together within a process that keeps us from stepping all over each other's toes. Right. So the level of transparency, I love it. It's really, really cool.

Yeah, I think Naval Ravikant said this, maybe someone else, forget who, where they were talking about when they were building companies. And I've always felt that, which is like, they never really understood hiring more people because they were like, everyone sort of should be entrepreneurial. And I think what this is doing is giving everyone that opportunity to be entrepreneurial within a company.

Yeah, it's giving a framework or guide rails for it, right? It's one thing to tell somebody be entrepreneurial, right? It's like telling somebody be empowered. That doesn't actually help, right? People know that there's really limits that they need to observe, so they can't just take a direction to be empowered and do it. They need to know the structure, the limits of their empowerment. If you don't know your limits, you don't know your freedom. Right. And likewise, like, be entrepreneurial. You know, if you don't know the tools you have to do that and what you can really lead, you're out of luck. So the challenge is not— it's— people often think of it as a motivation challenge for people or a capacity problem. And I think of it as a system problem. We need systems that make it easier for people to be empowered entrepreneurs instead of rule-following, you know, followers or whatever.

I love that. So 2 questions that are more sort of like tactical. In a system like this, how do you sort of like think about like management, managing like remote teams? And then how to have like better meetings?

Okay, yeah. So again, I think remote, it's the same challenges you have in person, they're just amplified. You can make up for lack of clarity by walking around an office and just listening in and eavesdropping. You can't do that virtually. So I think clarity is even more important remotely. And it's also, Holacracy, one of the benefits is it's easier to know who to go to for what. You know, you don't have to like bounce around trying to figure out who makes which decisions. You have a clear structure tells you exactly who makes which decisions. So it's easier when you're virtual because you know who to call, you know who to talk to, what, and you know when you don't need to talk to someone and you can just go lead. Um, and meetings, man, that, that's another case of like bad meetings in person are painful enough, but when you add the virtual thing on top of that, it just makes it so much worse. Um, Holacracy, you kind of have to have good meetings and it gives you the tools. There's meeting structures built into Holacracy, uh, that kind of give you, um, well, I, I actually have some data around this. There's some companies that have measured their meetings, um, like Uh, there was one department in the Washington state government that did Holacracy, and they measured before and after 6 months of doing Holacracy, how many meeting minutes did it take you to get a clear action or clear decision from someone else, right? And the reduction was over 90%. So in other words, over 90% less time needed in meeting minutes to get to a clear action or clear decision, which means your meetings are either 10 times more productive Or take 1/10 the time to get the same, same results, right? Um, and that's because you have clarity. It's— you— there's no magical meeting process that's going to do that. Meetings are dependent on the clarity you have. So if you want better meetings, you need better clarity first, and then you need a disciplined meeting practice. And Holacracy adds—

Okay, can you share, um, if someone's listening, and we're obviously gonna have like everything linked up, but, um, maybe some of the ways or tips to running meetings that someone can implement right away?

Totally. So here's one you could just do tomorrow. In most meetings, you have agendas that are built in advance full of topics to discuss, right? And then you show up in the meeting and everyone who has any tension they feel around that topic jumps in to try to get all of the tensions addressed all at the same time around that topic. And we end up searching for consensus again. It's incredibly inefficient. We spend most of our time on the first few agenda items. Um, and sometimes we're talking about things that we don't even need to because somebody put them on the agenda in So tip number 1, don't build your agenda in advance. Have a framework for the meeting in advance, but build your, your things to talk about in the meeting based on the real tensions somebody actually feels. So start with a step at the beginning where you ask people to build the agenda by just giving you labels for agenda items. You don't have to describe them, just give a quick label for each agenda item. And to, to build that agenda, feel it. Feel in your body, in your, your heart, in your emotions. What's got tension for you? What's got your attention is another way to say it. Put those on the agenda because those are telling you the real things you need to do. Then tip 2, when you get into an agenda item, don't treat it as a topic to discuss or solve. Treat it as a tension owned by one person to resolve. The entire team's job is to help that one person solve their one tension. And when you do, check it off and move on to the next agenda item and help that person, whoever raised it, solve their one tension, get them what they need, and move on.

What do you mean when you say tension in this context?

Yeah, I define tension as the feeling you get often in your body or emotions or whatever, but it's a felt sense, the feeling when you sense a gap between where we are and something that seems more ideal, right? So we could call it a problem or we could call it an opportunity. They're both tensions. It's a gap between where we are and where you want us to be. And when you feel that gap, that's, there's creative tension there, right? It's, there's a gap between current reality and potential. That tension, right? Track that. So it could be something simple like this process is inefficient and I'm wasting time every time I engage it, right? Or it could be like, hey, a customer just called. They're upset. We need to figure out what to do. Or who knows, whatever it is, there's a tension. Put that on the agenda. And when you get into the agenda, You're not going for consensus and buy-in. Whoever raised the agenda, it's their tension. They speak for it. No one else does. If anyone else wants to speak, they are having to speak for that tension. They add their own separate agenda item. And you turn to that person and you tell them, you ask them, what do you need? And the whole team's job is to rally behind that person to help them get what they need. And as soon as that person says, thanks, I got what I need, you're done with that agenda item. You check it off and you move on to the next. And that could be a rapid-fire process. And that way you've shifted from just vague topics we're discussing to, you know, who owns that agenda item, you know what you're trying to achieve, you're solving their tension until they can say, thanks, I got what I need, and then you can move on.

One thing I also noticed implicit in this, and tell me if I'm right on this, is Holacracy is not— it actually goes against something I dislike a lot too, is this sort of Decision by committee that happens in every company.

Yep, big time. The whole focus in Holacracy is clarify who makes the decision so you can free them to go lead more autocratically. Um, it's, it's— you can think of it almost as decentralized or distributed autocracy, right? It's just not rolling up a management hierarchy to one person. It's distributed out so everyone knows what theirs— their job is to lead and what's theirs to decide. and you're not trying to make consensus-based decisions. You're using the group process to generate clarity of who decides what and to ask for things from others when you need something from them, to make requests.

Yeah. Because we've all been in 30-minute meetings where we discuss the same thing and it just keeps going. You mentioned a term, you said decentralized, I think autocracy, right? So this sort of actually, because this is something I definitely wanted to talk to you about, but I want to do it in like hops because One of the things we'd mentioned as topics was self-organization in society. So before we go to society as a whole, I'm curious, like, and I'll give you context too, like we're sort of, when we're building this Lost Quest thing and other projects, we're thinking of like building like these like communities, right? Like platforms where other people can come in and become part of sort of that mission and do their work. Holacracy just sounds like a really interesting fit for that because you're basically, it's like, different clusters of creatives and different parts and you're organizing them. And maybe that relates to the self-organization in society. So can you talk about that?

Yeah. One of the things I love about holacracy, it unleashes creativity. So if you're trying to find people who want to show up and like really lead something and use creativity, it's an ideal structure versus, I mean, how many people are creative sorts that say, I just want to join a giant management hierarchy and get told what to do all the time so that I don't have to think. Right? Like, that's not attracting the kind of people you're talking about, right? So, you know, just the baseline of holacracy is more empowered. It's giving people more freedom, more autonomy, creativity. From there, the other thing it's doing is making it so that you don't need one person at the top who tries heroically to structure and organize and direct the action of everything. It's designed to allow more emergent, self-organizing solutions. Which means it thrives in complexity. So whenever you have something where you're getting more and more complex, you know, as complexity goes up, top-down solutions fail. Anything that is centrally planned, controlled, and managed top-down has a limit on how much complexity you can manage, right? You have those kind of complex situations and the kind of thing you're describing, there's complexity that's going to happen in that. You want to harness that. You want to allow that complexity. Holacracy gives you a very different way to manage and still get alignment and clarity. While allowing multi-pointed control as opposed to a single-pointed control where one leader at the top tries to control everything. Holacracy allows everyone involved to have an element of control and influence the whole system. So it's more like the human body. We have trillions of cells working together, but there's no CEO cell telling the others what to do. It's a complex adaptive system and every cell has a role. Every cell has some influence in the systems it touches. So It's kind of like that. And that's also what I want to see. I think to me, the beauty of holacracy is not just what it does for our organizations, but imagine what happens when people like, just when this becomes more normal, which it is, and people grow up in environments where they have real autonomy, real creativity, and they're used to not looking to some leader at the top to solve everything for us. But instead be part of a complex system where they're influencing and they're solving and building locally, right? Like, to me, that's what I most want to see from society. It's not a better leader. And I don't care who's in office or who you like or who you don't. I think there's a limit in how much we're going to see the solutions we need for today's complex world come from a single top-down dictate. Um, I think what we need is people to get used to being part of a much more complex society. And one where there's a lot more local emergent order. To me, holacracy is just a practice ground and then a tool for organizing efforts of any sort, community projects, nonprofits, governmental organizations, whatever. It's a tool for any time a group needs to organize around a purpose and you want to just vest control on a single point of top-down command.

Yeah. I think when you said the single point of top-down command, because if that's the control that also creates a single point of failure.

Yeah.

And I think this creates a much more resilient system. I know we're coming up on time, so a few last-minute questions. And this is again from Matt. This is something I wanted to ask you, which is Holacracy got a huge boost of interest from Zappos, and a lot of that was negatively spun. And now Zappos has been reported to have moved further from Holacracy, and I think Medium also published about how they implemented Holacracy for a while and then they've moved on, right? I'm curious, and Matt was curious, how has that influenced you personally, Holacracy One and Holacracy itself, and what are the lessons from it?

The biggest lesson I've learned is something about how the press works. I wouldn't say I trusted the press a lot before this experience, but now I don't trust them at all. It's even, um, if you look at those 2 examples of Medium and Zappos, they're actually night and day different. Zappos is still doing Holacracy. It has been reported that they stopped. They don't. They have a webpage on their website. They've built things on top of Holacracy. They've started customizing like really cool new budgeting processes and like all these other self-organizing processes on top of the foundation or framework that Holacracy gives. So that to me is, that's exactly what this is meant for. It's great. The press got sensational with it. They spun it negatively. That happens. I've seen it. It's shocking to me just how much made-up story there was in that.

Or they give you like 30 seconds to respond and not actually like time like this to like actually—

Oh, I know. This is for me why I've just stopped using any traditional press and news outlets for anything that I really care about. I use podcasts. I want to hear, I want to have listen to an hour-long talk or whatever. I want to go deeper. There's so much bad information out there. Medium, on the other hand, they did stop doing Holacracy. So that part's accurate. Um, in the case of Medium, that was a really interesting one. We, we told them upfront that this was probably not sustainable, but they, they tried anyway. What they tried to do was adopt the meeting practices of Holacracy and the role clarity without adopting the distributed power part. So they tried not to really empower the roles, right? They tried to say, we're going to use this to basically clarify the jobs that people have, right? And, and we're going to use the meeting practices because they're pretty efficient, but we're not going to do the power shift of holacracy, the real decentralized power structure. They still had a management hierarchy. And what we found again and again is those two are, they're competing frameworks. Either have a management hierarchy and invest power in that. Or you have holacracy and you vest power in the constitutional governance process and the rules it creates. You can't do both, right? So, uh, that my— one of my general learnings from that, I didn't think it would work and it didn't. And I've seen it, seen it now repeated many times since then. The two are different. You have one or you have the other. Now you can take time figuring out how to, how to make that shift, but it needs to be a shift, not a trying to run both in parallel.

Why do you think that was, that they didn't adopt that?

It's scary, right? I mean, if you're an entrepreneur, it's like, it's a totally different way to run something. It's scary and it's hard. And especially if you're a fast growth, uh, it's, it's another thing that the press got so wrong. They kept saying this is popular in like Silicon Valley and those kinds of companies. And that's dead wrong. Those are exactly the opposite of the companies that I usually recommend it for. If you've gotten a ton of capital, And you're building and growing and scaling really fast with a 3-year time horizon where you want to be exit, sold, done. This is a huge change. Why would you embark on a long-term thing when you're, you're focused on rapid scale and sell, exit? That doesn't make sense. Holacracy. Yeah, holacracy is for a company that, that does need to scale, but they're taking a much longer time horizon. They're looking at setting their company up, you know, for the next decade, not the next quarter. It's for the kind of companies that can really invest in something like that. So it's really not the stereotypical Silicon Valley firm that's opting for this. And to some extent, I think media was, that's a real need in that kind of business. So it's tough. It's also hard on the entrepreneur. They have to go back to learning a new way to— and it's actually harder for really seasoned entrepreneurs and managers because they have more to unlearn. Holacracy is much easier for a first-time CEO or a first-time entrepreneur than it is for somebody that's built 3 companies. There's just more to unlearn and that makes the cost higher.

Or someone who's used to hierarchy. You mentioned the kinds of companies, actually, can you talk about that a little bit, which is what kind of companies are doing it and maybe share some of the results? And I've recently learned to also hear from, for lack of a better word, Non-tech slash companies from like, quote, boring industries or different industries and larger companies?

Yeah, it's really across the board. So in terms of type of company, we've seen high-tech, low-tech, retail, manufacturing, service. I mean, you name it, it's totally across the board. For-profit, nonprofit, governments across the board. The thing that seems to be in common among all of them is about the founder or CEO who's adopting it. Those people are remarkable. They're often people that have done a lot of personal growth and development of some sort themselves. They're often highly conscious. They are wanting and ready to change themselves first and foremost, not just to tell others to do it this way, but to really go learn a new way to lead and structure and organize. Um, they typically have a lot of humility. They have a lot of, um, Uh, just, just, they're not very ego-driven leaders. Uh, they're really remarkable people. Um, that seems to be the single biggest factor I've seen. It's, it's that, because it's not type of company, it's none of that. It's the leader that's adopting it.

That's fascinating.

Yeah, it really is.

Do you guys bring the, bring those CEOs together in different ways in groups and stuff? Yeah, we do.

We have an annual conference that a bunch of them attend. Um, and that's, that's a really cool kind of peer-to-peer learning We have various other gatherings of different sorts we've done over the years, and they're just amazing people. I love talking to the people that want to do something like this. They're really cool people.

That's amazing. So I know we're coming up towards time. 2 last questions. One is, so you came up with this when you were working at, I think, Ternary Software, right? How long ago was that?

Oh man, I started the business in 2001, almost 20 years back.

So how does it feel to like have something that you kind of just like came up with as a way to like make things better for you now being used so widely?

Yeah, it's fascinating. Like I never set out to do that. It was, it was never my intention to spread it. I was just trying to find a better way to run my company. You know, I was doing it for me and my organization. And it was only once others started getting interested in what I was doing that I realized this was something that others would actually even be interested. And it feels great. It's— I get accused sometimes of being a management theorist or something, or an academic, and I am not. I'm an entrepreneur and a builder. And, um, I love that something that, like, I just— I built is now— it's spreading and it's helping people. I talk to the entrepreneurs and the burden it lifts of having the sole responsibility for everything on their shoulders is huge. Or the empowerment on the other side of people getting, like, life-changing experiences and personal development in companies. because they have real voice and real autonomy. It's incredibly gratifying to have been a part of that. And there's a lot of other people involved. It's not just me. Lots of people have been involved in the experimentation now that's led to this.

That's amazing. And last question, you mentioned that it requires a certain kind of entrepreneur that's conscious. So I'm curious, like, since it's the name of the show, what does it mean for you to be a conscious creator?

Yeah, for me, it's, I may go to like, Mindful, aware, awareness really. It's, I try to be aware of my own assumptions, my own meaning-making frames. You know, how am I looking at something? How am I making sense of things? And I'm kind of skeptical about those. I'm questioning always my own frames, assumptions, meaning-making. I'm noticing what my attention does, where my presence is. I'm noticing what things I'm giving energy to or what, what I'm, the way I'm making sense of the world. Like I'm just conscious, mindful, and skeptical of that and try to make more conscious choices of which ones of those serve me and my purpose best.

Right.

And I think the kind of creation, whatever we're creating, when it comes from that kind of consciousness, I think it tends to work better. It tends to be really interesting creations that those of us who do our best to take a more conscious approach come up with.

Definitely. And hopefully in these times, it makes the world a better place. Bryan, thank you for doing this. To find out more, people can obviously go to holacracy.org. I'd actually recommend checking out the constitution. I think it's just /constitution because it's just, I love the detail that you have. Any other places people should go check things out after?

Well, let's see, the website, one thing just useful to tell people, people misspell it all the time. It's holacracy.org. And there's lots of videos on there. There's the book, of course. And if you poke around there, that's a good place to start. It'll link you to a lot more from there.

Perfect. And we'll have all of that linked up. Thank you for doing this.

Great. Thanks, Sachit. Really, really great talking with you.

Awesome.