Adhocracy vs Holacracy

Understanding the differences between Adhocracy and Holacracy is essential for organisations seeking to move beyond traditional hierarchical structures. Both approaches foster self-management, decentralise authority, and increase organisational agility.

However, they do so through distinct frameworks and practices. This article compares Adhocracy and Holacracy, highlighting their advantages and disadvantages, providing real-world examples, and illustrating how each can be implemented in practice.

The goal is to equip you with the knowledge to choose the approach that best suits your organisation’s adaptability, empowerment, and resilience needs.

Comparison Table of Adhocracy and Holacracy

Adhocracy Explained

Adhocracy is a flexible, organic organisational form that lacks formal hierarchy. It emphasises decentralised decision-making, innovation, and adaptability. In Adhocracy, teams operate highly autonomously, often forming temporary groups around projects or challenges. The organisation encourages experimentation, learning, and rapid response to change.

Key features include:

• Flat structure with minimal formal roles.

• Teams form and disband as needed.

• Decision-making is decentralised and often informal.

• Focus on innovation and flexibility.

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  How it works in practice:  

  An organisation adopting Adhocracy might have project teams that come together to solve and dissolve specific problems once the task is complete. Leadership acts more as facilitators or coaches than managers, enabling teams to self-organise and adapt quickly.

  Example:  

  Many creative agencies and tech startups operate as adhocracies, where hierarchy is minimal, and teams are empowered to innovate and respond swiftly to market demands.

  Holacracy Explained

  Holacracy is a formalised system of self-management that replaces traditional hierarchy with a set of clear roles, circles, and processes. See our article at * for a more complete introduction. It is designed to distribute authority throughout the organisation, enabling autonomous decision-making at every level.

  Holacracy emphasises structured governance meetings to surface tensions, update roles, and resolve conflicts. Unlike Adhocracy, there is a rule set that governs how all of this works, called the Holacracy Constitution. 

  Learn About Holacracy in Detail

  Key features include:

  

  • Defined roles with Purpose, Domains, and Accountabilities.

  • Circles are semi-autonomous units responsible for specific functions.

  • Regular governance and operational meetings.

  • Decision rights embedded within roles.

  How it works in practice:  

  In a holacratic organisation, decision-making occurs within roles and circles. For example, a marketing circle might decide on campaign strategies independently, while governance meetings regularly update roles and resolve tensions. Authority flows through the organisation based on role definitions, not hierarchy.

  Example:  

  Zappos adopted Holacracy to decentralise decision-making and foster a culture of autonomy and innovation, demonstrating its practical application in a large organisation.

Advantages & Disadvantages

Adhocracy

Advantages:

• Highly flexible and adaptable.

• Promotes innovation and experimentation.

• Encourages employee initiative and ownership.

Disadvantages:

• Can lead to confusion over roles and responsibilities.

• Risk of chaos without transparent processes.

• Difficult to scale in larger organisations.

Holacracy

Advantages:

• Clear roles and decision rights reduce confusion.

• Promotes transparency and accountability.

• Enables rapid decision-making across the organisation.

Disadvantages:

• Complex to implement and maintain.

• Requires significant cultural change and training.

• Can be perceived as rigid due to structured processes.

Examples

Adhocracy

• Google: Known for its flexible, project-based teams that form around specific challenges.

• Valve Corporation: A gaming company with a flat, adhocratic structure where employees choose projects and roles.

Holacracy

• Zappos: The famous online retailer adopted Holacracy to decentralise decision-making and foster a culture of ownership.

• Mercedes-Benz.io: Uses Holacracy to promote agility and rapid response in their digital teams.

• Valsplat: Embraces Holacracy to shift beyond traditional hierarchies and empower teams.

Holacracy and Adhocracy in Action

Implementing either approach depends on organisational culture and goals. Adhocracy thrives in environments that prize innovation and flexibility but can struggle with consistency and scalability. Holacracy offers a more structured approach to decentralising authority, fostering clarity and speed while maintaining flexibility. 

Practical Application:

• An innovative tech startup might adopt Adhocracy to foster rapid experimentation.

• A larger organisation seeking to decentralise decision-making while maintaining order might choose Holacracy. 

Final Thought:

Choosing between Adhocracy and Holacracy depends on your organisation’s size, culture, and readiness for change. When implemented with clarity, training, and commitment, both offer pathways to a more empowered, responsive organisation.

This comparison clearly explains two powerful approaches to self-management. Both are rooted in the principles of The Beyond Hierarchy Project, Self-Organizing Beyond Hierarchy, and distributed authority, and both can be tailored to fit your organisation’s unique needs for agility, innovation, and resilience. 

Holacracy can be adopted in full, or the practices that suit a specific team or organisation can be adopted. If you are interested in embarking on this journey, we can help you to assess your organisation’s readiness and ensure you have the resources and mindset to sustain the change.

Take our free 10-minute Team Needs check here to find out if your Team has needs that this approach could help. With the right approach, such post-hierarchical ways of working can be a powerful tool for navigating today’s complex and uncertain business landscape.

Suppose you want to learn these practices in depth. In that case, programs like Team Clarity & Faster Decision-Making and The Meetings Revolution offer step-by-step guidance and practical tools to help your Team make these shifts confidently and effectively.

When you move beyond hierarchy and empower your Team to own their roles, communicate openly, and adapt quickly, you improve performance and create the foundation for lasting success in a fast-changing world.

This blog continues our commitment to improving performance and decision-making within organisations. Stay tuned for our next instalment, where we will explore a range of practical tools for this purpose.

Visit our website for more insights and resources. Together, let’s evolve and adapt to the challenges of

our dynamic world and build a better, more collaborative future.