An Agile HR transformation is complex and requires a very particular way to approach it: experimentation. Based on several success stories, we will be sharing how other companies have changed their way of thinking and doing in terms of talent, performance, learning and development, compensation and benefits, motivation and commitment, leadership, and organizational design, as well as the challenges they have overcome and those they continue to face.
Our goal with this series is to help you learn about different models through the eyes of people who have used them so that you can choose the aspects that will help you achieve your strategic objectives and employee happiness in your organizations.
In this article we will delve into organizational design, specifically using the Holacracy Model.
What is Organizational Design?
Organizational design, by definition, seems simple but has many impacts: from how our work can have a positive effect on people to the methodologies that exist for its purpose.
The work in this field by Nicolay Worren, Naomi Stanford, and Dave Ulrich, for example, is a good starting point in understanding how organizational design is at the intersection of strategy, operations, regulations, and HR. And when done well, it allows for the creation and continuous development of a culture that is capable of creating value and achieving its strategic objectives.
What is the Holacracy Model?
Holacracy is primarily based on the definition of roles through a specific focus on the purpose, roles, and responsibilities of employees.
Circles of people are formed based on roles (instead of titles) and around groups of functions. In these circles, operating rules and mechanisms are agreed upon, which, through its own governance process, facilitate decision-making. As such, the Holacratic Model is a fairly organized model that is often implemented in organizations who want to flatten their structure.
Transparency is a key element of the model. Transparency can facilitate or impede cultural change, depending on the transparency level in your organization.
Eboca utilized Holacracy to transform their HR department. This is the story of their transformation.
Number of Employees: 50
Their Goal: Implement an organizational structure that allowed them to be more efficient and work in an agile way.
Their Solution: The Holacracy Model
Interviewees: Fernando Béjar and María Gimenez – Leaders of the Holacracy Model at Eboca
What does Eboca do and in what field? What is your raison d’être? Who is your target customer?
Eboca provides breakroom design and vending equipment services. Currently, we provide these services in Huesca, Zaragoza, and Lleida (Spain).
We don’t want to just be “the company with the coffee machines”. Our goal is to improve our client’s quality of life by creating break areas that promote creativity and collaboration among the people in their offices.
The industry in which we work is outdated. We want to be a differentiator in the market by providing unbeatable services and for being recognized for it in the cities and locations we service, which are mostly private offices and public buildings (hospitals, town halls, health centers, etc.).
Who is behind the initiative of implementing Holacracy?
The Director of Eboca, Raúl Benito, leads the change together with Fernando. Raúl has been a big champion of the transition by supporting it from the beginning. Currently, Fernando and María lead the transition within Eboca.
Maria is a Psychologist, and she has been a part of the team for the past 2 years after practicing at Eboca. Her work is focused now full time on managing the Holacracy Model’s “Circle of People” (schedules, personal development, internal training processes, selection of people, HR, remuneration, materials, etc.) Her role is to promote the model from all functions of HR.
Fernando is based in Huesca. He studied Business Administration and trained in Human Resources at ESIC, Valencia (in the people management and organizational development program). He enjoys all the challenges that come with strategic people management (within the HR area), and prior to joining Eboca, he was looking to join an organization that put people at the center and then aligned their mission and values. He was brought to Eboca by Raúl 5 years ago to be a part of the project to implement the Holacracy Model. His role includes analyzing and managing what can be improved internally and creating an overall continuous improvement environment.
What happened before using Holacracy? How did you discover the Holacracy Model? What led to the decision to implement it?
Eboca began a digital transformation 6 years ago. We changed software (the core of our business) and all processes based on that technology.
Unknowingly at first, Fernando, as a leader in the HR department, became involved in that transformation through the organizational development and structural changes that came with it.
As part of the digital transformation, Eboca sought to be more authentic, more responsible, and more autonomous. As we began to pilot and work on projects in a more agile way, we quickly found that everything we tried was done very inconsistently because the organization was still tied to a hierarchical model. Our existing hierarchy acted as a corset without a logical structure in their new ways of working.
After assessing and realizing they needed to change their structure, Rual and Fernando begin the researching other organizational models and discovered the book “Reinventing Organizations” by Laloux, which not only inspired them, but also introduced them to the Holacracy Model.
From then on within Eboca, Holacracy became known as the “organizational technology”, encompassing what we were and what we were aspiring to be.
Why the Holacracy Model?
What do you see in this model? What were you looking to get out of it? For what purpose?
We introduced the Holacracy Model with the primary goal of being a happier place to work and doing so by being more authentic. Holacracy allowed us to generate autonomy and responsibility by drawing on the best from each worker in regard to what they can contribute, thus freeing up the hierarchical structure that we had historically.
We also wanted everyone in the organization to be at the same level and speak to each other as equals. It was a priority for everyone to be valued and heard.
The Holacracy Model has tools that perfectly suited our needs. Specifically, it focuses on the self-management and responsibility of each employee. A message of, “If you can do it, go ahead,” prevails. This mindset allowed the space for everyone at Eboca to put their best foot forward.
Our goal was to involve the entire company in the change by positively impacting their environment and improving employee satisfaction.
How did you implement the changes in the beginning? What challenges did you encounter?
Our first step was for Fernando to go to the Netherlands to be trained in Holacracy. When he returned, together with a consultant, they formed the first two circles, the Eboca Circle and the Operations Circle, which marked the beginning of the implementation in the organization. The Eboca Circle was the first to implement the new model and, within this circle, we decided to start without varying the existing role-based structure.
Then we began creating content and training materials on the new structure, and, at the same time, trained five of our people in facilitation so they could deliver materials throughout the organization.
This is how we got the marketing and people-focused areas to become part of the circles. During the first few months, the consultant helped facilitate this process by holding training workshops to facilitate implementation through training the employees. Fernando also highlights that everyone participated in an organization-wide program called “personal liberation”, which taught them to manage emotions within the work environment and thus facilitate the transition of teams.
Over the months, the Holacracy Model evolved. We broke up the old role-based structure because it no longer adapted to our needs and we changed our roles. We created a Technical Service Circle and, with it, were able to celebrate a drastic reduction of bottlenecks. From then on, new circles emerged, and our structure started to evolve based on our needs, instead of being confined to a pre-determined, dated hierarchy.
Our first major challenge came as it does with any change – the fear of change. When changing the mindset of our whole company, it was difficult dealing with the individuality of our employees and the things that had historically given them security (What benefits will I get? Will I lose my current level of influence? Who is in charge? Etc.).
This was made more difficult to overcome by two factors:
- The training was in English (not our native language).
- Because others adopting Holacracy were also in the early stages (due to its relatively recent birth), we weren’t able to find a lot of forums to answer our questions and compare experiences.
What improvements have you seen after the first few months?
We now have an increasing percentage of the organization involved in the model. We are seeing greater employee autonomy and increased responsibility, resulting in reduced bottlenecks, improved time efficiency, and better communication.
We are also excited to see reduced stress on the teams and less alienation toward the common goals.
Each employee, individually, seeks improvement in their own learning through training and participates in a “personal liberation” project to help them trust others and themselves more, and therefore improving internal relationships. Our people are working together toward the same goal, managing their egos, and making decisions quickly and effectively.
At Eboca, we don’t have formal metrics to measure this the model’s success. We believe that the financial gain will benefit us as a result of good work by happier people. In the end, we will be measured by customer satisfaction.
Future Goals and Next Steps
What are you looking to accomplish now?
Our first priority is to train more facilitators to be Holacracy professionals so that we can become a Holacratic company in our entirety (we are currently at 50%). And, above all, find a way to integrate the operational part of the organization (the warehouse). This will be the most complex change.
Also, we’d like to create a learning community of Holacratic companies where we can all share our concerns and passion for what we are doing and interacting on a more regular basis.
Is Holacracy for you?
This is just one example of organizational design. I hope it not only gave you an introduction to what is possible, but also inspired you.
Even if you don’t have the perfect answer for the problems your organization faces, just seeing things from another point of view can help you evolve as your own environment changes. Sometimes, all we need to get started is making a connection with others – an author, others in your field, or with another work colleague (ideally, in an Eboca designed breakroom).
Take a look at the Transformation Sketch I also designed about Holacracy!
Want more on HR and Agility?
Take a look at our Agile for HR training course. It is designed specifically to teach individuals or teams how to promote agility across people. (BONUS: Students earn the ICAgile ICP-AHR certification!)