Holacracy disadvantages: honest criticism and challenges of an innocent framework
Last week a topic stuck with me long after the Masterclass session ended.
The case we discussed was Viisi, the Dutch financial firm that has become one of the most compelling examples of how an organization can adopt, and then move beyond, Holacracy.
But the moment that hit hardest didn't come from Viisi itself. It came from a participant who had spent four years inside a company that called itself Holacratic. And it forced an honest look at the real holacracy disadvantages people experience in the wild.
The experience that says it all
Over the weekend, before our Q&A with Marc-Peter Pijper (self-organization expert at Viisi, and coordinator of the Dutch Rebel Cell), one of the Masterclass participants posted something in the cohort channel that I think deserves to be quoted in full.
She wrote:
Her story is not an edge case. It is something I see and hear constantly in the field, especially from the frontlines.
It is a precise description of what happens when an organization borrows a framework without borrowing the spirit behind it.
Lead Links became managers in disguise. Salary tracked status. Governance meetings turned into gatekeeping rituals. The form of Holacracy was there. The substance was missing entirely.
This is one of the reasons we built the Masterclass: to give people a real, in-depth understanding of progressive organizational design before they start implementing it.
You can check out this video first if you want a quick refresher on Holacracy, illustrated through the Viisi case study.
The framework is dead
The participant's experience lines up almost exactly with the position Marc-Peter has articulated across many previous Masterclass Q&A sessions (we are now at cohort no. 18).
His view on Holacracy is consistently humble and, I think, exactly right:
This is one of the most common misconceptions about Holacracy: that the framework, once installed, does the work.
It doesn't. Marc-Peter calls it a toolbox.
Then he uses a deliberately provocative example to make the point land:
A framework is morally and culturally impartial until people make it otherwise. You can pour anything into the structure. A people-first mortgage advisor. A criminal enterprise. The framework doesn't care.
Technology is neither good nor bad; nor is it neutral
All of this reminded me of Melvin Kranzberg's First Law of Technology, which I shared with the cohort during Thursday's reflection session:
It sounds paradoxical, but it is right.
Kranzberg argued that technology, in and of itself, has no inherent moral weight. Take a social media algorithm. It can be used to connect with friends or to spread news quickly. It can also spread misinformation and fuel polarization. Whether it is used for good or bad depends on the intent of the people using it.
Yet the algorithm is not neutral either. It has a built-in tendency to drive engagement, because that is how it is designed. The technology adds something of its own.
The same goes for Holacracy, or any other self-management framework. They are all social technologies.
And like all technologies, they are shaped by the hands they end up in and the intentions those hands carry.
In the wrong hands, Holacracy does not automatically create a more equal workplace. It will most likely create a hierarchical organization wearing progressive clothing. That is arguably worse than a straightforward hierarchy, because at least the latter does not gaslight its employees about what it is.
In the right hands, the same framework can be one of the most powerful tools available for building a genuinely people-first organization.
That is what Marc-Peter means when he says:
Don't copy the model, build the mindset
The participant who shared her story had spent four years inside a company where the rules of Holacracy were applied, but the mindset behind them was not.
Marc-Peter captures this precisely:
The Spotify cautionary tale isn't really about Spotify. It reveals a near-universal human tendency: when we find something that works, we copy the surface and forget the substance.
We see it everywhere. The Buurtzorg model getting adopted by other healthcare organizations. Agile Scrum being bolted onto teams who never adjusted their assumptions. Holacracy being implemented as an off-the-shelf operating system.
The assumption is always the same: if it works there, it will work here. It rarely does.
What makes Viisi interesting is not that they follow the Holacratic framework, though they do. It is that they have spent years pouring their own culture into it. The Golden Rule. The people-first principle. The constant testing and amending.
They have made the framework their own. And they are explicit about not being attached to it. As Marc-Peter puts it: "We are not married to Holacracy. If something better or something else pops up, I'll move to that."
Go beyond the framework
The main lesson from last week is not that Holacracy is good or bad. It is that no framework can do the cultural work for you.
The framework provides scaffolding. You still have to build your own culture. You still have to work on the collective mindset.
If you adopt the technology but not the mindset, if you follow the rules but ignore the spirit, you end up where that participant ended up: four exhausting years inside a hierarchy dressed up in progressive language.
The alternative is to go beyond the framework entirely. Use it as a starting point. Then adapt it, test it, amend it, and fill it with something that is genuinely yours.
That is what Viisi has done. And that is why, after more than a decade, it still works.
So the question I keep coming back to, the one I'd want to ask anyone considering Holacracy in their own company: are you ready to do the cultural work the framework will never do for you?
