The Story of Holacracy roll-out at Tochka.com
Boris Dyakonov, CEO of Tochka.com, shares how they've managed to become the first Russian organization under Holacracy rules with more than 2,000 employees.
Tochka.com unique way of working is a prime example of a successful self-managing organization with some unique practices in place. In order to find out what makes them successful at scale, we talked with Boris Dyakonov during our last Holaspirit user club and discussed his company’s struggles, choices and challenges as they roll-out the practice in the organization.
Background of Tochka.com
Tochka was co-founded by Boris Dyakonov in 2015, who is still the CEO of the company. Tochka is a digital-only bank without bureaucracy for entrepreneurs. The company is based in Yekaterinburg in Russia. Tochka has around 2000 users (addendum: 3000 in Dec 2021) in Holaspirit in 137 circles.
The company’s embrace of Holacracy makes it the largest-scale use case to date in Russia, involving more than 2,000 employees under Holacracy rules.
Tochka.com adopted Holacracy in 2016 as a way to encode values in its organizational design and to create a corporate culture. They’ve made the shift because of the promises of transparency, distributed authority, and dynamic steering that would enable the executive committee to pull out of operational work.
But 2016 was a crazy year at Tochka.com. They’ve doubled their revenue, doubled their team and had to deal at the same time with the implementation of Holacracy. According to Boris Dyakonov, implementing Holacracy helped them do a lot of things rights and helped them scale with proper planning and top-down command .
Working as a Whole
A big part of Tochka.com culture developed as a result of implementing Holacracy. The goal was to make a transition to something that worked better for them, to continue to be agile and flexible and scale while maintaining transparency with the people they work with.
It was rather difficult for Tochka.com to introduce the rules and to start to play by the book. Boris acknowledges that implementing Holacracy isn’t an easy task, quickly adding that it’s essential to adapt the model to the context of the organization. He cautions “It is not about the letters in the constitution. It is about the spirit and the practical values it introduces in the organization”.
According to Boris, the most important parts are values and principles behind the book.
He sees Holacracy as a human body, in which each cell function autonomously within organs, which in turn function autonomously within the body. The organization and its people hereby recognizes that it is part of a larger whole and acknowledge the responsibility that goes with it. Every team member directs their energy in alignment with the broader mission, unlocking the organization’s full potential.
Of course, there might be “cancer” cells that start to live for themselves and move away from the organizational purpose. In these cases, Holacracy helps identify the parts of the organization that are working against the whole purpose.
Revealing breaking parts
When it comes to Holacracy, lots of people like to come up with reasons why it wouldn’t work. “It only works for small organizations” is one of the most heard arguments.
According to Boris, the power of Holacracy relies on the fact that it reveals the organization’s weaknesses. He says that “Holacracy is great at blowing up things that needs to be blew up and revealing issues that existed long before the implementation”.
This shift made a clear distinction from Holacracy, where before processes and procedure had been at the forefront and supported by top management, they now needed to build new processes and systems that values people and are solely based around leadership and autonomy values.
There are no managers telling others what to do or what is the plan to follow. So the only way to adapt is to go through re-organizations that are painful and disorienting.
After starting full fledge implementation, some units of Tochka.com stopped to perform. In these particular units, it was important to acknowledge the failure. They have reintroduce direct management and reviewed the structure during 3 months. The purpose was to repair the system in a way that might function again, to inspire people and establish new version of leadership.
Disruption and failure are necessary to the organizational improvement. Step-by-step, the power what given to the appropriate roles and transparency arose.
Making such a radical shift in organizational governance comes with its own challenges, starting with how to explain it to employees. Boris believes that corporate culture can never be shaped with words.
It is the behavior that shape the culture, not words.
Any company that doesn’t honor its commitments or leader who won’t show the example are doomed to fail. When it comes to Holacracy it seems even more important to hold each other accountable for your actions.
For Boris, organizational culture is defined by how people inside the organization interact with each other. People have to see that the company actually lives the culture.
Tochka’s 2000 people are spread among 8 countries and more different time zone. It was challenging but necessary to foster the leadership culture. They’ve given common rules and observed how people embodied and worked with the rules.
For example, there was particular cases at Tochka where policies were broken. It showed powerful signal that they needed to adapt. What shaped the culture is that they’ve acknowledge that the rules were not right and that the governance was broken.
At the end, rules are easy to implement, the challenge is to anchor the rules into the culture.
The shift of leadership
Throughout time, Boris noticed that by the time people grow into leaders, they quit utilizing their skills. They end up bureaucrats making decisions they should not be making. With Holacracy, Tochka wanted to be able to empower people to their fullest.
They’ve progressively transferred the decision-making authority and autonomy to the right roles. They’ve started to structure the organization as horizontal as possible. All the former lines manager held the role of Lead Link at the beginning of the implementation in order to support the transition.
Some managers struggled to adapt and had a tough time figuring out how to operate in this new environment. They failed to embrace this newly distributed authority and instead tried to maintain the control they had before. It was quite painful at the beginning to assign the right Lead Links, but it comes more naturally with time and experience, explains Boris Dyakonov.
Practice is key
You learn the practice of Holacracy by playing the game. It is like learning how to ride a bike or how to swim. You can not learn that from a book. It works the same with Holacracy. It is normal to fall sometimes but failure helps you understand what needs to change in the organization.
We are very interested to collect your feedback about this conference and article. If there’s a topic you find interesting for our next user club, let us know.
Get started with Holaspirit today
New ways of working for organizations of the future.