Sociocracy In A Nutshell

Sociocracy is based on mid-nineteenth-century ideas around applied sociology. Initially, a sociocracy was defined as a government applying what it had learned from sociologists to create a society that benefitted everyone. As a result, societies could avoid autocratic rulers who would only act in their own best interests. Sociocracy therefore is a governance system that helps organizations self-govern based on values of equality.

Concept Overview– Sociocracy is a holistic governance system and organizational structure that prioritizes equivalence, transparency, and effectiveness. It emphasizes shared decision-making and aims to create harmonious and self-organizing groups or organizations.
Core PrinciplesEquivalence: All individuals have equal influence in decision-making, ensuring that power is distributed rather than concentrated in a few. – Consent Decision-Making: Decisions are made when there are no paramount objections, fostering consensus while allowing for swift action. – Circle Structure: Organizations are divided into interconnected circles, each with specific responsibilities and autonomy. – Double-Linking: Circles are connected by individuals who serve in multiple circles, facilitating communication and alignment. – Continuous Improvement: Sociocracy encourages continuous feedback and adaptation through iterative processes, promoting resilience and flexibility.
Governance Process– Sociocratic organizations employ a governance process known as the Consent Decision-Making Process. It involves presenting a proposal, seeking consent (no paramount objections), and ensuring that all concerns are addressed. This process balances autonomy and alignment.
Organizational Structure– Sociocratic organizations are structured in nested circles. Each circle has its specific role and autonomy while being linked to broader circles. This structure promotes transparency, accountability, and communication while allowing for local decision-making.
Leadership– Leadership in Sociocracy is distributed rather than relying on a single authority figure. Leaders emerge based on their ability to contribute effectively within circles. The focus is on role-based leadership that can change as needed, fostering collaboration and diversity of perspectives.
Adaptability– A key strength of Sociocracy lies in its adaptability. Organizations can adjust and evolve rapidly to changing circumstances. The feedback loop and continuous improvement processes make it resilient and capable of responding to complexity effectively.
Challenges– Implementing Sociocracy can be challenging, particularly for organizations accustomed to traditional hierarchies. Achieving true equivalence and consent may require cultural shifts and comprehensive training. Misunderstanding or misapplication of the principles can lead to ineffectiveness.
Applications– Sociocracy has found applications in various sectors, including businesses, nonprofits, community organizations, and education. It is well-suited for organizations seeking to promote collaboration, efficiency, and adaptability while ensuring equivalence among members.
Global Adoption– Sociocracy has gained global recognition and is utilized in numerous countries. Its principles align with modern values of shared leadership, equality, and responsive governance, making it relevant to diverse cultures and organizational contexts.

Understanding sociocracy

In business, sociocracy is a systems-based governance approach that advocates employee empowerment, autonomy, and self-expression. This allows employees to work in alignment with company goals and strategies while maintaining their individuality at the project level. In this way, a sociocracy is a participatory form of decision making that differs from the traditional vertical (hierarchical) management system.

Sociocracy is based on certain methods, principles, and structures that create resilient and coherent systems. In the next section, we will discuss these in more detail.

The three pillars of sociocracy

Sociocratic principles are realized through three key features, known as pillars.

1 – Decision making by elected consent

Decision-making is performed by consent, with all circle members engaged collaboratively to choose an elected person from among their peers. 

Each member argues in favor of the person they consider the most competent, and each member must provide consent for the same individual to reach group consensus. However, consensus in a sociocracy means that no circle member feels the need to oppose a decision by way of a reasoned objection.

Note also that decisions are not made by an authority, traditional hierarchy structure, or majority vote.

2 – Circles and double-linking

The organization of working groups, units, or departments is represented by nested, hierarchical circles. Here, hierarchical refers to domains of authority. There is no relationship to control, power, or coercion. 

During meetings, circle members function as equals and each circle elects a secretary, facilitator, chair, and leader. Day-to-day decisions are made by the leader, but the leader is governed by a policy formulated by every member of each circle. 

Each circle is linked to both a parent and sub-circle via a double link, otherwise known as an overlap. This overlap occurs when one or two members of one circle become elected delegates in the parent circle. In other words, they are full participating members of both circles. Delegates work closely with parent circle (operational) leaders to ensure that their specific needs, goals, or proposals are duly considered.

3 – Feedback

Feedback is a critical part of all activities and roles at each level of the organization. It should be given by all employees and not concentrated on those with seniority or title.

In a sociocracy, feedback takes the form of meaningful information about the functioning of an organization. It should be collected systematically and cyclically using the lead-do-measure principle:

  • Lead – plan a meeting and then make policy. This includes the collaborative creation of an agenda and even trivial details such as where and when the meeting will take place.
  • Do – perform the meeting and carry out policy. Sociocracy advocates the use of rounds, where each member of the circle has a chance to speak once per round of discussion. This fosters mutual understanding and teaches employees listening skills.
  • Measure – evaluate the meeting and evaluate policy. Evaluating the effectiveness or quality of the meeting itself is a core component of sociocracy. The secretary of the circle should record the minutes and suggest issues or topics for discussion in subsequent meetings.

Feedback should always focus on whether the function in question was able to move the circle closer to its goals.

Key takeaways:

  1. Sociocracy is an organizational governance system with a focus on equality and continuous improvement.
  2. Sociocracy empowers employees to make their own decisions while maintaining an alignment with company goals and strategies.
  3. Sociocracy is based on three key pillars: decision making by elected consent, circles with double-links, and continuous and collaborative feedback.

Key Highlights

  • Origins and Principles:
    • Sociocracy traces its roots to mid-nineteenth-century ideas of applied sociology, aiming to create a society that benefits everyone through governance informed by sociological insights.
    • It opposes autocratic rulers and promotes a system based on values of equality.
  • Application in Business:
    • In business, sociocracy is a governance approach that emphasizes employee empowerment, autonomy, and self-expression.
    • It enables employees to work in alignment with company objectives while retaining individuality at the project level.
    • Sociocracy stands in contrast to traditional hierarchical management.
  • Three Pillars of Sociocracy:
    • Decision Making by Elected Consent:
      • Decision-making occurs by consent, where circle members collaboratively choose an elected person from their peers.
      • Consensus is reached when no member has reasoned objections, not by authority or majority vote.
    • Circles and Double-Linking:
      • Working groups are organized into nested, hierarchical circles based on domains of authority.
      • Each circle elects leaders, and day-to-day decisions are governed by policies agreed upon by all members.
      • Circles are linked to parent and sub-circles through elected delegates who actively participate in both levels.
    • Feedback:
      • Feedback is integral at all levels and roles within the organization.
      • It’s given by all employees systematically and cyclically, emphasizing meaningful information about organizational functioning.
      • Feedback follows the lead-do-measure principle, focusing on planning, execution, and evaluation of meetings and policies.
  • Continuous Improvement:
    • Sociocracy emphasizes continuous improvement and alignment with organizational goals.
    • Through elected consent, circles with double-links, and feedback processes, the system aims to enhance decision-making, collaboration, and performance

Read Next: Business AnalysisCompetitor Analysis, Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

Types of Organizational Structures

Organizational Structures

Siloed Organizational Structures


In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.



Open Organizational Structures




In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.

Connected Business Frameworks

Portfolio Management

Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.

Kotter’s 8-Step Change Model

Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Nadler-Tushman Congruence Model

The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

McKinsey’s Seven Degrees of Freedom

McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

Mintzberg’s 5Ps

Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

COSO Framework

The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.

TOWS Matrix

The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Lewin’s Change Management

Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.

Organizational Structure Case Studies

Airbnb Organizational Structure

Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

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