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

Holacracy and multi-stakeholder/platform cooperatives

Hello. I'm part of a newly-forming platform/multi-stakeholder cooperative building a service for copywriters to sell content to website developers. Our goal is for everyone, from the writers themselves to those working on the technology/business, to own a stake in the company. We're currently trying to create a governance structure and legal entity, and much of what we're finding is a bit overwhelming for a group just starting out. I'm wondering if Holacracy might be a good fit for us and, if so, what its limitations are.

First, I understand that Holacracy isn't a full legal structure. Even so, it does seem to permit lots of leeway in areas that would normally be delegated to an operating agreement for an entity (I.e. it seems flexible in allowing organization members to make agreements with other entities that might normally be restricted.) Is there some way to begin understanding/exploring where Holacracy should end and where an operating agreement/set of bylaws should begin? Our organization is currently self-managing, but we've hit the point where a legal entity would be useful, and I think we'd like to begin with the least amount of formalized structure and evolve it as needed. It looks like Holacracy One's legal structure is a manager-managed LLC with the management class defined as the anchor circle. I'm wondering if a basic LLC operating agreement setting out those terms and agreeing to the constitution might be enough to start with? We will of course consult a lawyer, but would be interested in boots-on-the-ground perspectives about this.

I'm also curious how, or if, Holacracy can work for everyone in a cooperative where one circle might be large. Currently we have a group of platform maintainers who build the technology, work on marketing/customer development, conduct business operations, etc. Eventually, we'll also have a large group of tens or hudreds of writers filling orders. I understand how Holacracy would work for those of us building the platform, but I wonder if it makes sense for the many freelance writers who would use our services? They would basically have one giant shared role, but there isn't really a meaningful way to break them into smaller circles.

Another option is to just use Holacracy among those of us building the platform, with a larger governance structure governing the entire company. I can't decide if this is a better or worse fit than trying to shoehorn a bunch of platform workers into a large circle. To use the game rules analogy from the book, Holacracy plus a second governance structure seems like a game of soccer embedded inside another game of baseball. It seems like Holacracy would run up against the limits of the larger governance structure if, say, writers/platform workers used the larger process to override what emerged via Holacracy. Likewise, Holacracy's self-management practices might accidentally violate the larger governance rules in unanticipated ways. All of that is of course secondary to checking two separate sets of rules when attempting any kind of large initiative, which seems like a huge pain ("OK, we've agreed to changing our salary structure via holacratic processes. Now we have to pass that as a class resolution in the corporate structure...or do we? Someone look into that!")

Is Holacracy not a good fit for this kind of platform? If my situation is confusing, imagine Holacracy in use at Uber, Lyft, or any other gig economy platform. At least there you might have the advantage of organizing driver/worker circles by city, but even then circle members don't have the same impact on each other that they would were they all pursuing the same shared goal (I.e. I wouldn't have the same obligations to another driver that I would were that driver working to support me in a closer role.)


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