Empowering Microteams and Overcoming Challenges in a Distributed Holocratic Organization (Part 3)

In the previous articles of this series, I explored the concept of a distributed holocratic organisation in the creative industries, focusing on games. I discussed the challenges of relinquishing control for founders/CEOs and the importance of a comprehensive approach to implementing distributed decision-making. You can read about them here and here. Now, in the third part of this series, I want to dive into empowering these self-organising micro-teams. In some literature they may be called circles, sometimes squads or - as I like to call them - cells. How do they stay on track, accountable and enthusiastically delivering. I also wanted to cover the changing roles of HR, finance and other services as well as the additional challenges that arise in this transformative journey, but that will have to move into a part 4.

Empowering Cells: The Building Blocks of Distributed Decision-Making

According to textbooks, in a distributed holocratic organization, cells serve as the building blocks of decision-making and collaboration. Each cell represents a self-organising unit that takes ownership of specific projects or tasks. The key to the success of these cells lies in fostering a culture of autonomy, shared responsibility, and open communication.

Let's assume the leadership of the studio has truly embraced such a culture and it shows in its values and how the leadership behaves in tense moments. Let's further assume you have the right people with a growth mindset (not the revenue growth but the personal and company growth) in the company, now how do you get started? What if you don't have either of these key things in place? Then that is your starting point in my opinion. Really focus on that first. No point in starting the journey before you have these in place. What I have seen a few times, was that the leadership had that DNA but was too soft when it comes to swiftly weeding out the people that don't fit: especially hard if they are somewhat genius but narcissistic and should be easy (but its not) if just not good enough to take the roles they were given.

Here are my key things you have to have to establish before and in workshops and get in place:

1. Defining Cells and their Purpose: Clearly define the purpose, objectives, and scope of each cell. Encourage voluntary participation, allowing individuals with relevant skills and expertise to opt-in and contribute meaningfully.
2. Cell Roles and Responsibilities: Identify the roles needed for effective execution within each cell. Assigning a Cell Lead who facilitates comms (inside a cell and across the company) and coordination will be key. from my experience the perfect person is somebody who is a great teamplayer, takes a role in delivery but also has good project management skills. The Cell Lead should focus on enabling collaboration rather than top-down decision-making.
3. ?Aligning Cell with Company Objectives: Ensure that the cells really align with the overall company vision and objectives. This alignment helps create coherence and synergy among different cells, preventing them from working in isolation. From my experience it requires constant comms and some good coaches and mentors across the company to unlock the full potential of cells.
4. Ensuring that team leaders understand their new roles: You will need to have candid conversations about the reasons for transitioning to a holocratic structure. Explain how breaking down the silos aligns with the studio's goals and values and how it can foster a more empowered and collaborative environment. The role of a leader in a holocratic structure is different from a traditional manager. Leaders become enablers and facilitators of the cell's work rather than controllers. leadership skills are still highly valued and essential in holacracy. They are the ones to drive this forward and support each and everyone to do their very best.

Some further notes from my playbook that help answer the usual questions that come up in workshops:

Project Size:

• In a holocratic structure, very small projects might not require a dedicated cell. Instead, they could be managed as part of a larger cell's responsibilities or by a single individual within a cell. The overhead of creating a separate cell for an extremely small project might outweigh the benefits.
• The size at which a project becomes too big for a single cell depends on the complexity and scope of the project. If a project becomes so complex that it requires a diverse range of skills and expertise that cannot be effectively represented within a single cell, it might be necessary to create multiple interconnected cells to handle different aspects of the project. Up to 15 people still worked for me, then I'd suggest to start creating a new cell.

Participation in Multiple Cells:

• Individuals in a holocratic organisation can participate in multiple cells if their skills and expertise are relevant to those cells. This allows for flexibility and cross-functional collaboration.
• But these Individuals need to be good at managing their time and commitments effectively if they are part of multiple cells. They should have a clear understanding of their roles and responsibilities within each cell.

Prioritisation of Work:

• Each cell typically has a designated cell lead. This lead is responsible for facilitating discussions, decision-making, and ensuring that the cell's work aligns with the studio's purpose and strategy. Most people are used to daily stand-ups but in addition you will need a weekly governance meeting that is run by the lead where governance topics such as cell structure changes are being discussed.
• Prioritisation within a cell is often handled dynamically through discussions among cell members. Members can collectively determine the priority of tasks and projects based on their impact, urgency, and alignment with the cell's purpose.

Cross-Cell Prioritisation:

• Once you have more than one cell, you will need weekly alignment meetings where the cell leads discuss projects, priorities, and tensions. It's super important that leadership - when participating - has a facilitating role at best.

Staying on Track: Maintaining Coordination and Effectiveness

As cells function autonomously, maintaining coordination and effectiveness across the organisation will be challenging. Together with some of my peers, I initially thought we were sinking into total chaos. We implemented a series of rules that helped everybody to get onto track:

1. One of the biggest challenges was to keep decision making simple. It can never be a democratic or even unanimous. And we humans seem to tend to always find another reason or believe that we don't have all the information we need. True, sometimes you don't. But with every decision you always take a risk. Our mantra was "Is there a massive red flag reason to NOT do this?" And it was our understanding, that massive red flag meant that it was high risk and down the line we would not be able to stop serious damage for the company. Another rule that we implemented - due to asynchronous decision making and the fact that some people just need more time than others to digest information - was that we kept a log that stayed open for 24 hours top add comments, especially red flags.
2. Another mechanic that probably remote work has taught everyone of us: Write everything down. There are not enough confluence pages and not enough are up to date. But if you write everything down, new cell members can get up to speed faster. Slack is not good for this, so we took over the best practice from our dev teams to write everything down in confluence.
3. With a cell structure, goals and performance reviews are different. I've been doing quarterly goals and 1:1 sessions for a decade now and I've learnt that simpler is better and less is more. Obviously it only works if its about SMART goals and when these are developed together. In a cell, the cell needs to define the business goals and metrics to evaluate success. But when it comes to personal development goals this should not be down to a cell lead to define these and hold people accountable. I have very often taken that responsibility but if there was talent development in HR or however you call the area, then I would like to see a senior person there working with the individuals and defining 3 month goals for personal development. When it comes to evaluation, I have participated in and conducted 360 reviews and I feel this lends itself perfectly for a cell. Bamboo as one of my favorite people management tools can organise that really well.

I'm now on part 3 and there is a lot more to cover. So as you can tell, it's hard. But from my personal point of view, in many countries the work culture has shifted so dramatically over the last 10 years where people demand purpose and meaningful involvement to stick with you and your company, that you can't just keep things as hierarchical as they often are. Your company will loose in the long term.

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