By Dan Cook
Never one to take the cautious way to anything, Zappos co-founder Tony Hsieh is playing 52 Pickup with his corporate organizational structure.
Company “management” (the term doesn’t exactly apply anymore) told “employees” (everyone else who was being told, not telling) the other day that the Las Vegas-based retail shoemaker would henceforth be governed by the management principles of “holacracy.”
This is a theory for structuring (not running) a company that eliminates job titles, spreads work roles out among those who come to work (the former “employees”) and dispenses with the hopelessly outmoded notion of “management.”
In other words, no more traditional managers in a move aimed at giving employees more of a voice in running things.
Zappos executives told the Washington Post they want to keep the 1,500-person company from becoming too rigid, too unwieldy and too bureaucratic as it grows.
“As we scaled, we noticed that the bureaucracy we were all used to was getting in the way of adaptability,” said Zappos’s John Bunch, who is helping lead the transition to the new structure.
Holacracy is the brainchild of management consultant Brian Robertson, a serial software entrepreneur. While a glance at the HolacracyOne website begs comparisons to the vaunted Japanese management style of the 1970s, this theory is apparently so cutting edge that it essentially defies description and must be experienced rather than explained.
A “Five Misconceptions About Holacracy” written by Holacracy’s Alexia Bowers explains what holacracy isn’t but doesn’t offer much insight into what it is. She opens her “Five” post this way:
“There’s been some buzz about Holacracy recently, with the news that the fine folks at Zappos are adopting it and running with it. It is all very exciting — I have never checked my Twitter feed so often! I’ve noticed some misconceptions out there about Holacracy itself, and I wanted to try my hand at clarifying things a bit.
“One challenge that we’ve had at HolacracyOne is explaining and describing Holacracy quickly and succinctly in a way that is easy for folks to understand. Holacracy is so different from how we typically think about organization, so, it comes as no surprise to me that there are some confusing things being said out there.”
And she goes on to talk about the really confusing things:
1. Holacracy isn’t a thing like a democracy, but a practice, like yoga, with rules and even with its own Holacracy Constitution. Companies don’t become holacracies, they follow its teachings.
2. Holacracy isn’t structureless, but highly structured and orderly.
3. Holacracy isn’t really a flat structure; there’s still some hierarchy but through work roles, not people. (Although in theory that’s the same at most corporations. It’s just that people with fancy titles tend to extend and abuse the authority vested in the job title.)
4. Holacracy includes compensation and hiring/firing guidelines—nope, it only provides guidance for how to do these really hard things.
5/ Holacracy is not a silver bullet. Darn it!
One hopes that Hsieh and his “leaders” (the holacracy term for managers) can cut through the confusion so no one misses a shipment of shoes.
Amazon bought Zappos in 2009 for $1.2 billion but allows it to be run as a mostly independent unit.
Also read: 101 sales and marketing ideas, part 1