On April 5, 2017, the lead link at Liip AG, in Lausanne, Switzerland, was reflecting on the past seven years. The digital services organization had gone through a rapid development, from a company with a team-based structure led by a top management team to a holacratic organization. A holacratic structure was based on a skeleton of roles and processes, with individual employees self-defining their work with the intent to help the company fulfill its purpose. However, was a holacratic structure sustainable over the long term for a growing company? What potential inefficiencies might Liip AG face under a holacratic structure and how could the organization overcome them?
This case is suitable for undergraduate- and graduate-level courses on organizational design, management, and strategy. Students are asked to shed their assumptions about the need for hierarchy and bosses in an organization. After working through the case and assignment questions, students will be able to achieve the following objectives:
- Learn declarative knowledge about holacracy as a type of organizational design by engaging with its set-up in a company.
- Acquire knowledge about the philosophy behind holacracy and its application in a real environment.
- Discuss examples of roles, circles, meeting processes, and the impact of a holacracy on employees.
- Learn procedural knowledge by conducting an organizational design analysis on holacracy, for example, determining to what extent holacracy is a good match for Liip’s strategy, its key capabilities, and its values.
- Gain insights into the psychology of self-management and self-organization.
- Recognize that holacracy means focusing on more than just one’s key tasks; it requires engaging in organizational and entrepreneurial activities.
- Learn about the advantages and disadvantages of working in a holacracy, seen through the lens of organizational design, rather than from the employee’s viewpoint.
- Realize that functions of organizing become responsibilities of the employees themselves (e.g., who reports to whom, who collaborates with whom), which is in contrast to the formal structures and processes of many traditional designs.