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Zappos pays up to support Holacracy vision

May 26, 2015Written by Guest contributor

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

Zappos has recently been making making waves with its new "Holacracy" model. As noted by Zappos Insights — the culture division within the Zappos Family of Companies — a Holacracy is a "comprehensive practice for structuring, governing and running an organization" that "instills rapid evolution in the core processes of an organization."

Zappos made this shift in an effort to maintain its pace of innovation and collaboration, even as the company continues to grow. Rather than having a top-down approach to decision-making, authority is distributed throughout. So that means there are no traditional bosses or even job titles.

"Unlike conventional top-down or progressive bottom-up approaches, it integrates the benefits of both without relying on parental heroic leaders," noted a description from Holacracy.org. "Everyone becomes a leader of their roles and a follower of others', processing tensions with real authority and real responsibility, through dynamic governance and transparent operations."

However, it doesn't seem like the entire Zappos team is on board.

Diagram
Source: Holacracy

The company recently offered its entire staff three months' severance by April 30 to leave if they weren't comfortable with the new self-management organizational structure. The offer came from a memo to staff members from Tony Hsieh, CEO, who indicated that the company was taking too long to transition to the Holacracy that has been slowly rolling out since the close of 2013.

As a result, approximately 14 percent of the company's entire employee base decided to throw in the towel, according to The Wall Street Journal.

Despite rumblings of disagreement, I have to say that I commend Mr. Hsieh for going "all in" on this concept, and his business overall.

We're living in time when less than one third (31.5 percent) of U.S. workers are engaged in their jobs, according to research from Gallup. Recognizing the company's culture and business practices aren't for everyone, Zappos' leadership is taking the appropriate measures to remove employees that may be an issue further down the line. At the same time, Mr. Hsieh wants to ensure that he has the most loyal and dedicated employees.

It's still early days for the Zappos Holacracy, but I'm excited to see how employees adapt, and most importantly, how it will impact the company's overall innovation and growth.

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