Holacracy Community of Practice Archive, 2015-2019 Community Holacracy Web Site

Focus on the organisation's limiting factor (or constraint)

I have a problem with Holocracy.
 
A business is a system, and as such it has one or very few constraining elements that limit achieving whatever its goal is.
 
Current organisational structures are not good at finding and exploiting the constraining element(s) properly – because management gives every part its target – targets are often in conflict and local departments will optimise themselves … causing damage to the constraining element.
 
Holocracy encourages local optimisation that can result in the same problem … the limiting factors capability will suffer.
 
So, in a holocracy there must also be a BOSS … the limiting factor … since everyone must do whatever is necessary to get the most from it. The rule stated this way is nice, but in the detail its not so clear.
 
On top of that the limiting factor will (may) ask to be expanded (not the best first step; the first step is to get the most from the limiting factor). What is likely to happen is the limiting factor moves to somewhere else in the organisation … and all the rules and the necessary information to do what is correct change.
 
Not that current organisations solve this sort of problem; but I don’t see Holocracy doing it either.
 
So how can Theory of Constraints thinking be integrated? The information, the rules, the limits etc. How can they be built to get the most from the organisation as a whole.
 
One thing that is obvious – peer pressure in a holocracy will lead to everyone doing their best … work all the time. THAT IS BAD – because only the limiting factor should sometimes work all the time (even it should have some spare capacity to capture new business)
 
I have not read all, I know there is a mechanism to adapt rules etc, but these changes come from a local perspective. They must be considered from the global point of view! By the Boss.
 
The idea of Holocracy is seductive, but so far I have not seen that it addresses this key issue.
 
(Some might say, ‘We have many constraints’. That is not understanding the (business) system. In any system of interdependent entities there can be only 1 constraint (one weakest link),If an organisation has (seemingly) many, then they are caused either by management policies (Holocracy policies??) or that there is no constraint … there is plenty of capacity. The constraint might be the market …
 
In any case, whatever way of management is applied, the constraint is the governing factor. Either you deal with it correctly or suffer the consequences.
 
Rudi
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