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This news is an excerpt from the report by Dori Rutkevitz about 2nd (San Francisco) Bay Area Re-inventing Organizations group that was held in July 2015, published originally here: .

Teal community, Common challenges

The turnout for this meetup included consultants, grad students, and folks from a wide range of Bay Area organizations (including MediumThree Stone Hearth, BayNVC and the Biodynamic Association). I got the sense that many folks benefited from simply hearing about each other’s challenges with Holacracy. We started the night off with brief introductions where each person voiced one question they’d like to have answered.

It was interesting to see how a number of orgs adopting Holacracy were facing some of the same challenges:

  • Compensation (How is this handled without traditional titles and management?)
  • Performance management & firing
  • Budgeting time and resources (Traditionally we plan for headcount based on our team’s needs. But in this new paradigm individuals can have roles that spread across many teams, and don’t have managers, so who is forecasting and how will they budget for people’s time?)
  • The differences between “Teal” and Holacracy. Specifically, Holacracy is more focused on process than people, and does not make explicit recommendations for cultural practices that might fall under the “Wholeness” breakthrough. For example, “lead links” in Holacracy can remove people from roles basically without warning, but doing so could cause conflict between people. One org described potential HR violations due to a lead link removing someone soon after they complained about him, which could be seen as a form of retaliation. Each organization needs to figure out how to embed its own values into such structures.

Interestingly, it’s been made clear that the Holacracy founders don’t want to prescribe answers for these issues, and instead intend Holacracy to be a system which organizations can use to make their own decisions on these topics. We plan to focus future meetups on each of these issues and how different orgs are approaching them.

Going Teal is radical

These issues above really highlight how radical a shift to Teal is. Self-management alone requires a retooling of some of the basic structures of our organizations. Listening to Zappos, it became clear what a massive undertaking it is to take a 1000+ person organization (that’s developed it’s own traditions and processes over a decade) and change the way it organizes. Zappos has team members dedicated to helping this transformation happen, and it’s still an incredible, audacious project.

Orange organizational practices have been so embedded in the way we think about work that they almost feel natural. The way we understand compensation and professional growth, the politics of traditional hierarchy, and how we as individuals fit into the whole all has to change in a Teal org.

To change the way we work requires not only structural transformation, but I believe it requires significant personal transformation as well. An anecdote: Will Young, our host for the night and the “Director” of Zappos Labs, was also doing much of the cleanup after the event. Will, as a lead link for the office, is responsible for roles (like office management) that others haven’t taken on. The fact that we had a Director cleaning up after us isn’t groundbreaking, but it’s indicative of the flexibility and ego-shifts necessary for Teal.

I question if most companies are providing the space for the personal growth needed alongside the professional training required to adopt Teal methods.


One last anecdote from the night. Will shared that recently two Circles (a team in Holacracy) annexed themselves from the department they were in and moved to another, in order to run experiments like a different compensation structure. If you’ve been a part of large bureaucratic corporations you’ll understand why this was mindblowing to long-time Zappos folks.

Will said that the question his team is asking these days is “What would it take to make Zappos a company that lasts 100 years?”. The potential innovation and learning that Circles annexing themselves can bring is one reason, I imagine, they’ve taken on this risk. The last reason, unspoken by the group but I believe implied, is that Teal practices honor our humanity. Organizations are taking the risk of unproven structures because they’re tired of the professional masks that are the price of admission of Orange orgs.

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