5 organizational governance models to make your teams more agile

Imagine your organization as a ship navigating the unpredictable seas of today's business world. To sail smoothly and swiftly, you need more than just a strong wind; you need a top-notch crew and a flexible steering mechanism. Enter the world of organizational governance models—your secret map to agility!

These frameworks help you define how decisions are made, how work is organized, and how power is distributed within an organization. However, they’re not your run-of-the-mill, dusty rulebooks. Think of them as the cheat codes to empower your teams, foster innovation, and thus make your organization more agile.

Let’s now dive into five organizational governance models that will shake up the way you work, think and govern information:

1. Holacracy
2. Sociocracy
3. Teal
4. Lean
5. Agile

PS: stay with us until the end to discover which model best fits your organization!

1. Holacracy

What is it?

Imagine a world where meetings are actually productive, and everyone gets a say. That's holacracy. It's not just a governance model; it's a revolution in how decisions are made and work gets done. 

At its core, holacracy operates on the principle of circles—each a self-managed team with its own purpose, domains, and accountabilities. These circles are not static. They evolve as the organization grows and changes, with each circle encompassing specific roles filled by team members.

In holacracy, employees don’t just have a job title. They wear as many hats as they can balance and can make decisions autonomously based on the roles they have, without waiting for approval from the top. This setup helps create an agile work environment, where everyone can take initiative.

Where does it come from?

Born from the brilliant mind of Brian Robertson, a software entrepreneur who thought there had to be a better way to run a company, holacracy took its first breaths in the early 2000s. Inspired by the agility of software development processes, Robertson created holacracy as the antidote to the sluggishness of traditional corporate structures, introducing a system designed for rapid adaptation and empowerment at all levels.

In this TED talk, he explains how holacracy can help organizations get rid of hierarchy and improve transparency in the workplace:

How can it make your organization more agile?

Holacracy is like agility on steroids. It replaces the slow-moving cogs of conventional management with a dynamic web of interconnected teams (or circles, in Holacracy-speak). Decisions are made quickly and locally, by those closest to the work. This means your team can pivot faster than a cat chasing a laser pointer 🐱🔫.

Also read: Benefits to Switching to Holacracy and How to Ease Into It

Is it really for you?

Embracing holacracy means saying goodbye to the comfort of traditional hierarchy, and hello to a world where accountability and self-management are the name of the game. So if your organization loves innovation, despises red tape, and has a penchant for breaking the mold, then holacracy might just be the perfect governance model for you. 

As you may know, implementing holacracy means following a certain set of rules—otherwise known as the Constitution. For some organizations, these rules may be a bit too rigid, so don’t be afraid to tweak it in order to adjust it to your needs.

Many of our clients have used Holaspirit to implement holacracy within their organization. If you’re curious about how they did it, go look at these customer stories:

• The Story of Holacracy roll-out at Tochka.com 
• The Story of Holacracy roll-out at Hypoport
• Viisi: Holacracy Through Thick and Thin

2. Sociocracy

What is it?

Sociocracy, often seen as the harmonious cousin of holacracy, takes collaboration and shared governance to new heights. Picture an organization where every voice matters, and decisions resonate through a chorus of consent rather than a solo of authority. Sociocracy is structured around circles (similar to Holacracy), but with a stronger emphasis on inclusiveness. 

Each circle operates autonomously yet is interconnected with others through double linking roles (i.e. roles that act as links between the circles of the organization). This ensures that information and decisions flow seamlessly from the top down and the bottom up.

In sociocracy, decision-making is based on consent, not consensus. This subtle but powerful difference means decisions are made when there are no paramount objections, allowing for faster decisions while ensuring all voices are heard. 

Where does it come from?

The roots of sociocracy stretch back to the late 19th century, but were more formally developed in the 1980s by Dutch engineer and management consultant Gerard Endenburg. Drawing from his educational experiences in a Quaker school, Endenburg sought to create a system that balanced efficiency with equality, leading to the development of the sociocratic circle method, a governance model that promotes both productivity and egalitarianism.

How can it make your organization more agile?

Sociocracy enhances agility by fostering a culture of open communication and distributed authority. By empowering every member to contribute to decision-making, it cultivates a sense of ownership and accountability across the organization. This inclusive approach not only accelerates decision-making but also ensures that decisions are well-informed and broadly supported by team members.

This video from Sociocracy For All explains these benefits quite well:

Is it really for you?

While sociocracy promotes inclusiveness and distributed decision-making, implementing it can be a challenge if you’re used to traditional hierarchical structures. However, if your organization values transparency, equality, and collective wisdom, and is ready to invest in training, then this may be the right fit for you.

This governance model is particularly effective in cooperative environments, non-profits, and community-oriented businesses where inclusivity is a cornerstone of the organizational culture. Here you can find some examples of organizations that use sociocracy. 

3. Teal 

What is it?

Teal organizations represent the next leap in organizational governance, where the workplace becomes a living entity with its own evolutionary purpose. In a teal organization, the rigid structures and hierarchies of the past melt away, and are replaced by a governance model characterized by three core principles: 

• self-management, which empowers individuals and teams to make decisions autonomously
• wholeness, which encourages members to bring their full selves to work 
• evolutionary purpose, which allows the organization to adapt and grow organically based on its intrinsic motivations rather than external pressures

Where does it come from?

The concept of teal organizations was popularized by Frederic Laloux in his groundbreaking book "Reinventing Organizations." Drawing on examples of real companies that operate on principles far removed from traditional corporate cultures, Laloux identified teal as the last evolutionary stage in human consciousness, after red, amber, orange and green worldviews.

In this governance model, companies operate more like living organisms than machines, and are guided by their collective intelligence and inner drive.

How can it make your organization more agile?

Teal organizations thrive on agility by nature. The emphasis on self-management allows teams to act autonomously, without the need for cumbersome approval processes. The principle of wholeness fosters a culture where every team member's insights and intuitions are valued, leading to richer, more creative solutions to problems. 

Finally, by aligning around an evolutionary purpose, teal organizations can quickly adapt to change and remain resilient in the face of uncertainty.

Is it really for you?

Going teal can be challenging, as it requires a fundamental shift in mindset from control to trust, from hierarchy to equality, and from predictability to adaptability. Just like other organizational governance models, it requires a period of adjustment and training. However, if your organization is ready to embrace trust, purpose and community, making that change will probably be worth it!

Teal is quite popular in creative and technology industries, as well as in companies seeking to make a positive impact on society and/or the environment. However, it can be used in any sector. For example, companies like Buurtzorg, Patagonia and Bees & Honey have all gone teal. So why not you? 

Watch this webinar replay to discover how our client Bees & Honey implemented teal into their organization.

Also read: Where To Start When Going Teal?

3. Lean 

What is it?

Lean governance is all about efficiency and value—doing more with less and doing it well. It's an organizational governance model that focuses on streamlined processes, continuous improvement and the relentless pursuit of eliminating waste. 

In a lean organization, every process, tool and task is scrutinized to ensure it adds value to the customer, and anything that doesn't is reevaluated or removed. The aim is to enable everyone to spot inefficiencies and suggest improvements, in order to make the organization as efficient and responsive as possible.

To achieve this, lean relies on 5 key principles: defining value, mapping the value stream, creating flow, establishing a pull system and pursuing perfection.

Where does it come from?

The roots of lean governance trace back to the Toyota Production System, a revolutionary approach developed in the mid-20th century. Originally designed to enhance manufacturing efficiency and quality, Toyota's principles have evolved into the broader lean methodology, influencing governance models beyond manufacturing. It showcases how focusing on customer value and engaging in continuous kaizen (improvement, in Japanese) can lead to improved organizational agility and performance.

You’ve never heard of kaizen before? Have a look at this video to understand what is means:

How can it make your organization more agile?

The lean governance model encourages a culture where change is not just anticipated but embraced, with processes designed to be flexible and adaptable. By minimizing waste and optimizing resource use, organizations can swiftly adjust to market changes and customer demands. Lean's iterative approach to improvement facilitates quick learning cycles, enabling faster responses to opportunities and challenges.

Is it really for you?

‍Any organization aiming to improve efficiency, responsiveness and customer satisfaction can benefit from lean governance. Its principles are applicable across various sectors, from manufacturing to services and healthcare. Compared to other governance models, this one requires—above all—a mindset of continuous improvement. So if this isn’t part of your organizational culture, lean may not be the right methodology for you.‍

5. Agile

What is it?

Agile is a dynamic project management approach that emphasizes adaptability, customer satisfaction, and iterative progress. Unlike lean governance, which focuses on streamlining processes and eliminating waste to improve efficiency, agile places a premium on quick response to change. 

Teams that implement this governance model work in short iterative cycles of work (called sprints), that allow for constant feedback and adjustments in real time. They can also implement the OKR (Objective and Key Results) methodology in order to set themselves specific goals.

Where does it come from?

The agile governance model has its roots in the Agile Manifesto. This guide was crafted in 2001 by a group of software developers who sought to find a more efficient, flexible approach to product development. Together they created 12 principles aimed at improving teamwork, customer collaboration, and adaptability to change, as well as 4 foundational values to go by:

• Individuals and interactions over processes and tools, i.e. highlighting the value of human communication and collaboration.
• Working solutions over comprehensive documentation, i.e. prioritizing actionable results that deliver real value.
• Customer collaboration over contract negotiation, i.e. fostering partnerships that accommodate changing requirements.
• Responding to change over following a plan, i.e. embracing adaptability as the key to navigating uncertainty.

Since then, several agile frameworks have emerged, such as Kanban, Scrum, LeSS, SAFe, Crystal, Extreme Programming and Feature Driven Development (FDD).

How can it make your organization more agile?

Implementing agile governance can significantly help your organization navigate the complexities of today's business landscape. By breaking down projects into smaller, more manageable parts, teams can focus on delivering value incrementally and adjusting their strategies based on real-time feedback. 

This iterative approach reduces the risk of major failures, as adjustments can be made quickly. Moreover, it fosters a culture of cross-functional collaboration that allows for more efficient problem-solving.

Also read: Agile Trends 2024: What is the Next Wave of Agile Transformation?

Is it really for you?

Shifting to an agile methodology demands embracing a culture of change, collaboration, and continuous improvement. Organizations in dynamic industries, where customer demands and technology change swiftly, can therefore find this governance model especially beneficial. 

Companies like Spotify, Cisco or LEGO have implemented the agile methodology to improve team collaboration and efficiency. Rather than creating roles and circles like in holacracy, Spotify has structured its teams into squads, tribes, chapters and guilds. If you’re curious about how this works, go have a look at this article.

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What’s the right governance model for your organization?

Picking the perfect governance model for your organization can feel a bit like dating in the modern world—so many options, each with its own charm and quirks, promising to be the one true match for your unique needs. 

If you’re a bit lost, fear not. This recap table should help you find your perfect match.

To conclude

‍Finding your governance soulmate is all about testing and learning. Whether you lean towards the empowerment of holacracy, the inclusivity of sociocracy, the purpose-driven teal, the efficiency of lean, or the adaptability of agile, remember that the best relationships are built on flexibility. 

Embrace the journey of discovering what makes your team tick and how you can collectively sprint towards your goals. Don't be afraid to experiment and mix and match elements from different governance models to find your perfect blend. And who knows? With a bit of exploration, you might just find "the one" that helps your organization live happily ever after.

Ready to take the next step in your governance romance? We’re here to help! Our platform offers many customizable features to map your organization’s roles, document your processes, define your OKRs, run meetings and accelerate decision-making. Moreover, we have a large network of coaches that can guide and train you, and facilitate the change management process in your organization. Schedule a call with our team to discover how Holaspirit can help you get started with the governance model of your choice. 

Want to know more about organizational models, how to choose and implement them in your own organization? Check out our latest white paper full of expert insights on this topic

Access White Paper

In our white paper "The Ultimate Guide to Organizational Models", you'll get: a comprehensive overview of innovative organizational models (like Agile, Teal, Holacracy, Constitutional Management, and more), testimonials from pioneer organizations that have successfully adopted it, best practices for choosing, implementing and measuring the effectiveness of our model, as well as digital tools to facilitate the transition.