Startup organizations are known to be innovative and agile, however they also sometimes encounter old and tricky organizational problems which diminish their effectiveness and reduce the probability of success. Many suffer from ineffective delegation of authority, office politics or wrong division of tasks. The issue becomes especially complicated as often in startups people from different backgrounds and mindsets come together.
Holacracy is an an organizational structure which effectively tackles this problem, and is increasingly consciously implemented by agile and lean startup organizations in particular. Holacracy claims to distribute decision-making and authority across self-organized individuals or teams inside the organization. It also strives to clarify who’s in charge of what and why, and how it’s determined and can be changed. As a result, the organization functions according to rational and well-defined rules, which are changed openly according to procedures and circumstances. Holacratic organization is based on transparency and trust, office politics and personal conflicts are eliminated and organization is reorganized often according to the needs. You may read more in the constitution of Holacracy.
Lab.Coop is one of the advanced startup organizations in CEE, which implemented and actively promotes holacracy. Budapest-based team started its journey at Brickflow – visual content-discovery app startup, which raised significant amount of money from European investors, however after a long and tough fight ran out of cash and was forced to close its activity. However, due to transparency and trust in the organization, the team kept together and started a new venture building company – Lab.Coop. Delivering products end-to-end and reinvesting profits into incubation of software projects, Lab.Coop has been operating according to the rules of holocracy. Peter Langmar, CEO, said to me that all 17 employees of the company are owners, receiving more equity with each year they stay in the organization. The salaries are transparent, and the roles inside the organization are well-defined and agile. As the company is successful and is growing, there arises an issue of competition for talent with local startup giants like Prezi. Peter noted that one of the reasons he’s able to retain and attract new top-notch talent is the organizational structure and transparent culture of trust in Lab.Coop.
Startup organizations always have a lot to learn and improve their functioning towards the ultimate efficiency, which allows them to function faster and maximizes chances for success. Holacracy also greatly improves other areas however, like trust, transparency and overall job satisfaction of employees.