Every so often, a new management idea makes its way into the business world, promising to change how we think about leadership and teamwork. One of those ideas is holacracy, a system designed to flatten hierarchies, reduce bureaucracy, and give people more ownership of their work. For entrepreneurs and startups, it may not be the first model that comes to mind, but it’s one worth considering if you’re thinking about how to build your organization from the ground up.
What is a Holacracy?
The concept of holacracy can feel a little strange if you’ve only worked inside a traditional hierarchy. Instead of climbing a ladder with rigid job titles and fixed job descriptions, you work in a holacracy structure where people take on different roles based on the company’s needs at any given time. Think less about who’s “the boss” and more about who’s best suited to take on a specific purpose right now.
Holacracy isn’t chaos. It runs on a structured process for how teams make key decisions, assign specific roles, and keep work tied to bigger company goals or the needs of our clients. It’s designed to give greater clarity so everyone knows what they’re accountable for.
Instead of one manager holding all the decision-making authority, a holacratic organizational structure spreads responsibility across all of your team members. The real power comes from the self-organizing team dynamic. People step into new roles or shift responsibilities as priorities change. That flexibility is what makes responsive organizations possible.
At Integrity, accountability doesn’t flow from the top down. We all report to each other. When I first joined, John and Ed explained that they rarely have to fire anyone. Instead, the team makes that decision organically. If someone consistently underperforms, they simply stop being invited onto new projects. Over time, the system reinforces itself. People who contribute thrive, and those who don’t eventually move on.
Think back to those group projects in high school or college. There was always that one person who naturally took the lead in organizing tasks, keeping everyone on track, and often doing more than their share to make sure the project got finished. If that was you, chances are you’d be a good fit in a holacratic organization like Integrity!
Why Holacracy Sounds So Good
For startups, the concept of holacracy can sound like the perfect antidote to traditional hierarchical structures. It promises all the things entrepreneurs crave: speed, creativity, and freedom from red tape.
- Agility: In a holacratic structure, decision-making processes happen faster because you don’t have to wait for layers of approval.
- Creativity: With a focus on employee engagement and cross-functional collaboration, every voice can be heard, and new ideas surface more easily.
- Ownership: People don’t just follow job descriptions; they step into specific roles with a role’s purpose tied to larger project or company goals.
On paper, it sounds like a dream: a group of self-motivated employees working side by side in a self-organization model that values accountability and adaptability. A holacracy framework is built for continuous improvement, giving teams the freedom to pivot or adjust as they go instead of sticking with the status quo.
A developer can become a project lead. A project lead can be the primary client liaison on one program and provide SEO consulting and content marketing support for a different project lead. A UI/UX designer can create artistic graphic designs, be part of a QA team, and run accessibility audits all in the same day!
The Catch
Like most management practices, holacracy isn’t a one-size-fits-all solution. It only works if your team has particular personality traits. People need to be organized, self-motivated, and comfortable with decision-making authority that doesn’t come from a boss. They must collaborate effectively in a self-organizing team, take initiative without needing permission, and adapt to role assignments that may change regularly. In other words, every employee has to think and act like a leader while also checking their ego at the door so the whole organization stays at the center.
That’s a high bar. Be a self-motivated, high-performer AND check your ego at the door? Yes!
In many traditional companies, employees are conditioned by the classical hierarchical system. They wait for direction, escalate problems instead of solving them, or hesitate to speak up for fear of repercussions. Drop a holacratic approach into that kind of work environment, and it breaks down quickly. Without the right culture and processes, the promise of flexibility turns into confusion.
Why It Works at Integrity
Integrity is a place where the holacracy system feels natural. That’s because our culture and processes are built for it.
Flat Structure
Instead of climbing a ladder of job titles inside a traditional management hierarchy, everyone here is trusted to manage themselves, their projects, and their clients. Career growth isn’t about titles. It comes from stepping into new roles, solving new problems, and contributing to the organization’s purpose in a bigger way.
Shared Ownership Mentality
Employees are expected to take initiative, not wait for permission. We’re empowered to take personal ownership. “That’s not my job” is not part of our vocabulary. As our handbook puts it: “Don’t wait for someone to make something awesome.” That’s the holacratic approach in action. Clear accountabilities, a transparent process, and the freedom to make proposed changes when something isn’t working.
The 4 H’s
We hire people who are Hungry, Humble, Honest, and Happy. These are traits that line up perfectly with self-organization models like holacracy. Hiring can’t be rushed. You need the right people who can thrive in these team roles and have a strong work ethic. Checking your ego at the door is 100% critical! Even A-players have to operate within a project’s hierarchical structure, where the team, not the individual, comes first, which brings us to our next point.
Team-First Mindset
In a holacratic organizational structure, everyone is responsible for making everyone else’s job easier. That can mean resending a quick link to a shared document when asking for feedback, coding expenses correctly so finance doesn’t have to chase you later, writing up clear roles and action items after a meeting, or adding thorough details, files, and links in a Monday ticket. These small, tactical things make the holacracy work day to day.
Clear, Detailed Communication
Some might call it over-communication, but in a holacracy framework, it’s essential. At Integrity, we combine meetings, tools, and documents into what we call “radical transparency.” Projects begin with a detailed statement of work and a discovery process. Tasks are broken out into tickets on Monday.com, time is tracked in Harvest by task, and client communication is handled in Basecamp. All of it is reinforced with regular meetings. You can sense a rhythm of tactical meetings and touchpoints to keep projects moving and documented. It’s this structured process that keeps communication flowing across the entire organization and with our clients.
Hour Tracking Matters
One of the most straightforward but most powerful practices we have is time tracking. Every hour is logged in Harvest, giving us a clear picture of how long things actually take. For us, it helps with estimating proposals and managing budgets. But even outside an agency, it’s one of the building blocks of holacracy because it creates built-in accountability and allows teams to spot bottlenecks, balance workloads, and make timely decisions around priorities and resource allocation.
Why Holacracy Won’t Work Everywhere
Large, established organizations face an uphill climb trying to shift from a traditional hierarchy to a holacratic organizational structure. In conventional corporate America, it’s all too easy for underperformers to fly under the radar, “Yes Men” to agree themselves into decades with the same company, and Type A egos bulldozing their way into managerial and leadership roles.
In traditional companies, there are too many places to hide and too many egos at play. It’s hard to imagine a vice president in a classical hierarchical system taking direction from a coordinator, no matter how capable that person might be. In my experience, I’ve worked with VPs who wouldn’t even respond to emails unless you held a director-level job title. That’s not exactly fertile ground for self-organization models.
On top of that, most corporate management practices and HR systems are built to reinforce the status quo of a traditional management hierarchy. Performance reviews, for example, typically slot employees into three categories—“does not meet expectations,” “meets expectations,” or “exceeds expectations.”
These structured processes assume not everyone can be an A-player and require a manager-subordinate relationship. That runs counter to the holacratic approach, where role assignments and contributions are measured against company and client goals, not a bell curve. As a former manager in corporate America, I found this incredibly frustrating. I once had a team of all rockstars, but still had to downgrade a few people because policy demanded it.
Holacracy also struggles in environments where:
- Clear, rapid authority is required (think crisis-driven industries).
- Complexity, compliance, or a matrix structure demand rigid oversight.
- Teams default to an order-taker mindset, lack motivation, or don’t have the right tools.
- Psychological safety is low, toxicity is high, and employees are afraid to speak up.
- Leaders filter information, and employees don’t see the full picture of the organization’s purpose or the project parameters.
In these cases, holacracy can slow progress or derail it entirely. Removing hierarchy doesn’t automatically create collaboration. Without a supportive structure, it creates confusion. And undoing years of hierarchy, office politics, and traditional management practices is a monumental task.
A Better Way Forward for Entrepreneurs
If you’re building a startup, you have a unique opportunity: you don’t have to inherit the baggage of traditional companies or a classical hierarchical system. You can be intentional about your organizational structure from day one. The holacracy framework is one option, but even if you don’t adopt the full holacracy constitution, you can take pieces of it to design a healthier, more responsive organization.
Here are a few questions worth asking as you shape your business:
- Can I up my hiring game and screen for a holacratic approach? Find the right people who will thrive in a culture of accountability and cross-functional collaboration?
- Do I trust my current team to act like owners, not employees, and step into specific roles as the company’s needs evolve?
- Have we created a work environment where people feel safe to take risks, share new ideas, and bring their whole selves to the table?
- Am I willing to give up traditional power structures so that my people can truly lead themselves?
If the answer is yes, then holacracy, or your own version of holacracy, might give you the greater clarity and agility you’re looking for. If not, a hybrid model may be a good fit: something that blends clear accountability and defined processes with the freedom for continuous improvement and innovation.
Holacracy Must-Haves
I joined Integrity with more than 20 years of experience inside both large corporations and smaller companies. I’ve seen all kinds of management practices. Some encouraged innovation, while others clung to the status quo. Watching the holacracy system in action has been fascinating, and if you’re seriously considering it for your startup, there are a few building blocks of holacracy you can’t ignore.
Hire self-motivated A players
In traditional companies, leaders often assume a bell curve of A, B, and C players. In a holacratic organizational structure, you can’t afford that. You need 100% A-players who thrive in self-organization models. These are people who are hungry to learn, ready to step into new roles, and comfortable being held accountable through a transparent process.
Check your ego at the door
This one is tricky because you’re hiring rockstars, but egos will break a holacratic structure. Shared ownership is the foundation of this new model. You can’t have someone obsessed with job titles, the spotlight, or empire-building within a circle structure or project team. Even A-players need to operate as circle members within a broader circle, aligned with the organization’s purpose, not just their own.
As a founder, you’ll need confidence and swagger when pitching investors, but inside the holacracy circle, you’ll need humility so your team feels safe pitching you their ideas.
Actively manage your culture
Every company creates a culture, whether leadership manages it or not. In a holacratic company, culture is everything. Without it, the holacracy work falls apart. You’ll need to foster psychological safety so people can speak up and bring their whole selves to work.
Integrity does a great job of attracting and hiring diverse talent, which gives us a unique mix of backgrounds and perspectives. From day one, it’s clear that everyone belongs. Team members are encouraged to share personal stories, post vacation photos or first-day-of-school snapshots, and celebrate family milestones together. Those small moments of connection create a workplace where people feel welcome and supported.
The founders have built a culture that prioritizes employees’ well-being, so we can do our best work. Our culture of empowerment is sustained by keeping in constant communication. Want a deeper look at how we work? Explore Integrity’s culture on our career page or dive into our employee handbook for the full inside scoop. You’ll see how our core values and everything shared in this blog are woven into a culture that makes the holacracy model thrive.
An easy way to set the tone of your culture is to actively share ideas and recognition via tools like Slack, especially if you have remote workers. You, as the founder, will set the tone by your posts, energy, and participation. This is an easy way to connect everyone, share project updates, celebrate wins, shout out to those who made your job easier, and spread positive vibes. Don’t forget the boom 💥 emojis!
Track time and analyze the data
It’s been years since I had to track my hours on the client side, but in a holacracy, it’s critical. Time tracking is one of the building blocks of holacracy because it fuels accountability. For us at Integrity, Harvest helps with project estimates and billing, but it also provides greater clarity into workloads, timelines, and resource allocation. For startups, this means you can have honest conversations about priorities and proposed changes and set expectations with investors.
Prior to Integrity, I can’t tell you how many random requests or “fire drills” from senior management derailed projects and timelines. If they had insight into the hours spent scrambling to respond to their random requests, they might be more open to a productive discussion about priorities and resources.
The Bottom Line
Holacracy isn’t a silver bullet. It’s a tool. And like any tool, its effectiveness depends on the culture and people behind it. At Integrity, holacracy works because the values, structure, and expectations all align with it. In other companies, it might create more problems than it solves.
So, is holacracy good for you? Maybe. The real question is whether your culture is ready to support independence, trust, and ownership not just as slogans—but as lived, daily values. Reach out if you’d like to learn more about our model. We love to connect with cool people!
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