What Makes a Good Holacracy Proposal?


One of the challenges of a system like Holacracy (the “Operation System” or “OS” for running companies) is that the knowledge of how to use it well cannot be instantly transmitted from mind to mind. So, over time, some people get better at it than others. Even nearly two years into our practice, there’s still a lot of disparity in different people’s skill levels at bending this system to their wills.

So I’ll be writing a few articles with the goal of demystifying some aspects of Holacracy. I’ll start with proposals, when to use them, and particularly what makes a good proposal.

First, what is a proposal?

I often like to compare Holacracy to a board game for running your company, or, more precisely, two board games. The first board game is where you do the work: the policies and roles and domains that impact you in your day to day job. Let’s call it the tactical game. The second board game is about changing the rules of the first board game, and we’ll call it the governance game.

Most companies also have both of those games, but usually the rules are hidden, especially the rules of the governance board game. Only a few people get a shot at playing the governance game, and change is excruciatingly slow. Holacracy makes both board games completely transparent and accessible to everyone, which speeds up the ability of the company to change.

A proposal is something that happens in the governance game. Essentially, it’s a suggestion to change the rules of the tactical game.

When should there be a proposal?

In a healthy and active Holacratic company, there should be proposals going out quite frequently. That’s because proposals are incremental improvements to the way that we work, and a healthy company is always seeking to improve how it works (it can easily be argued that, since the environment keeps changing, a company that doesn’t change is not standing still, it’s sliding backwards, so the only way to even just maintain standards is to continually improve).

So when should you make a proposal? Any time you feel a tension (aka a gap between how things are and how you’d like them to be) that could be resolved by a change in the rules. So, let’s say you need something as part of your work, like, for example, you need to get an NDA signed. You look around the governance records, and you don’t find any role that is responsible for signing NDAs. That means no one is responsible for signing an NDA on your company’s behalf. You don’t feel comfortable just signing it yourself, because it seems kind of official so you think there should be some sort of official recognition of the importance of this action in Holacracy. That’s a tension that can be easily solved by a governance proposal to create a role responsible for signing NDAs.

Every time you feel one of those tensions as part of a role you’re actively energising, you should consider, and almost always carry out, making a proposal.

How to get your proposal good enough to propose

There is only one test your proposal needs to pass to be ready to go: it needs to solve your tension.

In the example above, you might propose creating a role called “NDA Signer” whose purpose is “NDAs are signed promptly”. That’s it. That’s a proposal. It’s good to go.

Another way you could solve this is if you found a role that seems like it could also sign NDAs. Let’s say there is a “Document Manager” role whose purpose is “Our legal documents are in order”. Maybe you decide to add an accountability to that role that says “Signing NDAs”.

Or perhaps you want to make it clear that anyone in the circle in which you’re experiencing this tension is able to sign any NDA that comes their way without asking for anyone else’s permission. Then you might suggest an NDA policy that invites people to do so, by for example stating: “Anyone may sign an NDA on behalf of the company.”

And so on. There’s a million possible solutions to your tension. Which one is the right one? It doesn’t matter. What matters is that the solution solves your tension. If it achieves that, it’s ready to go.

What happens next?

HolacracyOne have a saying that “a bad proposal is a great start”. That’s because Holacracy comes with a built-in process to integrate multiple viewpoints in the governance process (which is the formal meeting with lots of rules around objections and so on). If you just take care of your own tension and trust the process, it will (mostly) smoothly bring together other people’s views and make sure that your proposal is improved, via other people’s input, until it is safe to try. That is, if it isn’t already good enough to try to begin with.

Once you submit your proposal, there is nothing anyone can do to stop it. So long as you feel a tension from a role, it is your constitutional right under holacracy to get that tension resolved. All that other people can do is either slow it down, or make some practical suggestions to make it safer. You have taken the important step of requesting your tension to be fixed, and the process will protect your ability to do that.

If you submit your proposal asynchronously, it might well just go through if no one clicks on “Bring to meeting” and states some reason to do so. If you submit your proposal while in a governance meeting – skip straight to that step.

The governance meeting

A lot of people are afraid or uncomfortable about governance meetings. They do look a bit scary, with all the formalities. But actually, they’re one of the safest spaces there is in any company, precisely because of those formalities.

What usually breeds unsafety, in any setting, is uncertainty. When we don’t know what might happen, when anyone might come out of nowhere and hurt us, we, as humans, tend to feel unsafe. Governance meetings are safe because they are very certain spaces. The rules are really clear, and the space allocated to each person is defined very clearly. When it’s your turn to offer a reaction to the proposal, for example, it’s your space – no one, if the facilitator is any good, will interrupt you. And conversely, as the proposer, though you may have to listen to other people’s reactions, there is no process to force you to apply them, unless they have a genuine, tested good reason to suggest a change.

It’s beyond the scope of this article to go into objection testing or describe the full governance process, but what I’d like you to take away is that governance meetings aren’t scary. They’re safe spaces with really clear processes. Like any board game, the first few times you go around the table while learning a new game might feel a bit awkward, but if you make the effort to do it, soon, the rules fade into the background and before long you’re just playing the game and not really thinking about the rules. Governance meetings are just like that – except instead of getting fun out of it, you get a better workplace.

Is there a bad proposal?

From this article so far you might be forgiven for thinking that all proposals are good proposals, at least as starting points. And it’s not far off the truth. But I also do want to mention one situation, which does happen from time to time, when a proposal is not the best tool. This is when you are trying to use a proposal (from one of your roles inside the relevant circle) to bring a tension you feel from a role outside the circle.

As a great example, if I have a role as, let’s say, GCC (General Company Circle) Lead Link, which in traditional companies would be a powerful CEO role that is implicitly allowed to mess with everyone else’s work and dictate how they go about doing it. Tensions I feel from that role are not appropriate to bring into sub-circles where I have a different role. For example, I might also have a role as Lead Generator in the Sales Circle, and I might try to bring in a proposal to reorganise our sales effort in a way that I think makes sense from my GCC Lead Link perspective.

If the facilitator is on the ball, they will hopefully sense that a proposal to make large changes to the Sales Circle’s operations is unlikely to be coming from the Lead Generator role, so they are within their right to ask me for an example of how I felt the tension which has led me to make this proposal, from the Lead Generator role. At that point, my proposal might be struck down, because in this line of questioning we might discover that my tension is actually being felt from the GCC Lead Link role – and from that role, I have no right to bring a proposal into the Sales Circle. Even if that happens, I might well use that opportunity to realise that there are other things I can do as GCC Lead Link to try and influence the organisation of our Sales Circle (for example, by setting clearer accountabilities on the Circle, or adjusting its purpose).

But apart from this relatively narrow example, pretty much any proposal you can think of is good, as long as it solves your tension.

Final takeaways

So, as final takeaways, I’d like you to keep in mind the following points:

– Every proposal represents an incremental improvement to how things are working
– When a circle or company is active and using Holacracy, one of the symptoms will be frequent proposals, to keep things getting better over time instead of getting worse
– Every time you sense that something could be better organised in some way, either via clearer roles or clearer policies or clearer domains, and sometimes by removing one of those, you should probably submit a proposal to solve your tension
– A proposal is a good proposal if it meets a simple, single test: that it solves your tension
– There’s no need to be afraid of governance meetings: they are safe spaces with very clear rules that you will quickly get used to once you attend a few
– You can trust in the governance process that follows to make sure that if your proposal is harmful in some way, it will be modified before it becomes official governance

If you’re in a company that runs Holacracy, perhaps you can use this knowledge by noticing a tension this week and making a proposal?

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Daniel Tenner

AKA Swombat. Serial entrepreneur, tech geek and startup blogger, prolific HN commenter. GrantTree founder. His superpower: the ability to turn anything into a so-called “dan joke”.