How to Structure Your Organization to Profit from Chaos


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Use Holacracy® to Build an Antifragile Organization

Hey CEO! Why so sad?

Oh, you mean this guy is giving you a headache:

He goes by different names. Stress, change, shock, disruption. But to keep it simple, let’s call it “Tension”. It’s what we feel when there’s something we want and don’t have.

Well, tensions can be a good thing, according to Nicholas Nassim Taleb

… who wrote the book Antifragile.

He says, in a world that’s so volatile and unpredictable, we need to build systems that benefit from change and shock, rather than suffer from them.

In other words, our organizations need to be antifragile to benefit from stress & tension.


Here’s what that means. Let’s take 3 different kinds of objects:

And apply tension to each of them.

The glass is fragile. It’s harmed by tension.

The safe box is robust. It remains the same

The DNA mutates when exposed to chaos. DNA is antifragile. It benefits from tension.

The Human body is a great example of antifragility:

  1. Bones get denser when periodic stress is applied to them.
  2. When you lift weights, you stress your muscles. The next time your body adapts to lift heavier weights.
  3. Also, when you deprive your body of food and water for a limited time, your body toughens up. That’s why intermittent fasting has many health benefits.

Here’s how you can structure your organization like a living organism so that it has the properties of antifragility.

How To Structure An Organisation Like a Human Body

You’ve seen this structure before?

It’s called the Management Hierarchy — a top-down command and control system to manage organizations. The bosses on the top make the big decisions. The people at the bottom spend most of the time following instructions, while the managers in between balance the needs of the bosses and the workers.

It’s a structure that is built to withstand risk and change.

In a rapidly-changing world, we are overwhelmed with information to process and decisions to make. So a structure like this makes it difficult for people to be effective in their work.

But this is not the only way to structure an organization. You can structure it like the human body.

Notice in the human body there is no boss cell that tells other cells what to do. Each cell function autonomously within organs, which in turn function autonomously within the body.

A human body is antifragile because it can adapt itself to become stronger from the stressors in the environment.

Similarly by structuring an organization like a human body, it can effectively process tensions in its environment to adapt itself to get more effective in fulfilling its purpose.

Holacracy — The New Management System for a Rapidly Changing World

Holacracy is a self-management practice for organizations that empowers people to make meaningful decisions in pursuit of an organization’s purpose.

Instead of “Managers” and “Bosses” having power to tell people what to do, in Holacracy, the power is in a set of rules that distribute authority so that people can be leaders in their roles.

When an organization adopts Holacracy, what results is not a flat organization, but a very structured one that contains a hierarchy of roles and not of people:

Org structure using Holacracy — Hierarchy of roles not people