How to Work, Earn, and Live on Purpose

This is the story of an entrepreneurial journey which started out with the vision of finding “a better way to work together”. In 2007 Tom Thomison joined Brian Robertson and Alexia Bowers to found HolacracyOne with the goal of developing a portable operating system for self-organizing work. At its core it was the attempt to replace the traditional top-down management hierarchy with a purpose driven organization. After a decade of trial and error and continual refinements it is clear that this experiment has been successful. With Holacracy there now exists a viable alternative to organize the work differently and create a thriving business without having to use the rigid structures and outdated mindsets of the industrial age.

In fact, Holacracy is just one example of a bigger evolutionary trend which seems to be guided by three notable principles encapsulated in the new “Teal Organization” movement, catalyzed by Frederic Laloux, author of Reinventing Organizations. Laloux has reverse-engineered these emergent trends from his research findings and clarified them as self-organization, evolutionary purpose, and wholeness. Over many decades other companies like Buurtzorg, Morning Star, Valve, Gore or FAVI also forged their own individual ways of doing the work and expressing these principles.

More and more people feel the urge to work, earn, and live on purpose.

Successful entrepreneurship is based on the ability to sense what the world needs, and deliver it. HolacracyOne sensed the evolutionary need for a portable system for purpose-driven self-organization. It delivered it in the form of the Holacracy Constitution. Yet evolution never stops. It transcends and includes its predecessor in a process of differentiation and integration.

The great gift of Holacracy is that it helped to clearly differentiate the organization from the people.

The organization is not a group of people. Rather, the organization is the organic structure of circles, roles, and accountabilities needed to express its specific purpose. Humans (and their affairs) exist in a connected but separate realm and intersect with the organization space only when and where they are serving the organization’s purpose through their role’s purpose, by employing their skills, passion, and energy to sense and respond to their role’s work.

By forcing this distinction Holacracy became an evolutionary catalyst for what is next, especially since it remains deliberately mute on many questions that it simply was not designed to answer. For example, it does not tell you how you should resolve interpersonal conflicts among co-workers, nor does it tell you which legal structure you should choose. It does not prescribe how you should compensate the people, share profits, or how you should redefine mentorship and career growth, in the context of a self-organizing system. It doesn’t pretend to have all the answers and trusts that its users eventually figure out, design, and iterate their own context relevant solutions over time.

The encoding of a For-Purpose Organization

 

The Organization: Work on Purpose

A self-organizing system like Holacracy replaces the traditional power hierarchy by distributing authority through organizing the work very clearly into circles, roles, policies, and accountabilities all of which are pursuing and executing based on purpose, rather than departments, managers, static job descriptions, and office politics. Here all role fillers can be equally engaged in decision-making processes. The focus in this container is the work of the organization and its ruleset is the Constitution.

Here we show up as Partners, filling roles in order to bring our energy and talent to work in pursuit of the organization’s purpose. Working in this space I have greater freedom and clear accountabilities. I lead my roles and the fact that I can take on a unique set of ever-evolving roles means that there are plenty of opportunities for my professional growth. The rules of the constitution provide clear pathways to process my organizational tensions and take responsibility for them.

The Company: Earn on Purpose

A main source of tension that needs an adequate space for processing is related to the fair distribution of the profits. The Company is where innovative legal agreements anchor the self-organizing system in local legal jurisdictions and where equity, profit, compensation, etc. are regulated. The focus of this container is the organization’s property or capital. The rule sets are all legal agreements, primarily the Operating Agreement.

Here we all show up as full legal Members of the company. For early stage companies a dynamic equity system (drawing on the “Slicing Pie” model) enables fair and transparent accounting for individual contributions in time and money, and grants investment stakes in long term equity. Additionally, profit interests and other capital interests are available for everyone. Power is no longer held personally with single owners or investors who call the shots. If everyone is a legal member of the company the awkward employer-employee dynamic is more fully transcended and there is no longer a privileged class of people potentially distorting interactions in the other containers.

The Association: Live on Purpose

One of the the most sought-after reintegrations is the question of where and how the people and their matters (like interpersonal relationships, the shared culture(s), care and support, etc.) fit into the picture. The Association is a space where we humans show up and associate with each other as who we are, in wholeness, with our strengths and weaknesses, with our desires, hopes, dreams and fears, with our interpersonal tensions and with our individual capacities to develop. The focus here is on the people and the ruleset is the Association Agreement that guides our context specific culture, our behavior norms, values, personal development, etc.

In the Association I show up as a Member. The beautiful thing is that I can be more fully myself and meet others on the same level of humanness without being entangled in the usual power dynamics and company politics. I can freely associate with the other purpose-aligned members, develop relationships, give or receive feedback and mentorship as needed.

The three containers of Organization, Company, and Association are linked via their different yet explicit agreements anchoring each other and together make up a new reintegrated whole — the SOE. Encode.org calls the individual in this constellation the “purpose agent” and places it right in the middle of this construction. In a SOE you are simultaneously a cherished member of the Association, a legal manager of the company, as well as a partner of the organization in differentiated yet overlapping spaces. You arrive at an SOE either by bootstrapping a new organization or by transitioning an existing organization to an SOE. Encode.org offers services and support for both pathways.

A platform to connect people and purpose in the New World of Work