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January 7, 2014

Zappos – Thinking Outside the Box or Thinking Inside the “Circle”

Filed under: General HR Buzz,Management Practices — Tags: 8:04 am

Ever since hearing Tony Hsieh of Zappos speak at the 2011 Annual SHRM convention, I have been a fan of Zappos and began following them in the news.  Of course, I was already familiar with Zappos and had even ordered shoes – maybe several pair – at one time or another.  But I never knew much about the culture of Zappos until I heard their CEO’s presentation, and subsequently read his book titled “Delivering Happiness.”

Zappos certainly has some non-traditional workplace practices including new hire rotation through all departments, paying new hires $2,000 to leave if they choose to do so, and over-the-top customer service.  So it was of great interest when I heard of their latest change – elimination of titles and managers.   Quite a step away from the traditional organizations with multiple layers of varying titles representing levels of management.

Reading on, I learned that the 1,500 employee company would be restructuring into “circles” consisting of teams of people working together and assuming various roles within those circles.  This type of management is known as a “holacracy”, in which there are no job titles and no managers.   The website, holacracy.org, states that “holacracy places the seat of organizational power in an explicit process, one which organizes around an explicit purpose. This allows emergent behavior of the whole system, without being controlled by either a single heroic leader or even the collective group.”  It also defines it as “purposeful integration through social technology.”

Within a holacracy, leadership still exists.  What it does is distribute leadership into each role, holding employees personally accountable, and rotating leadership among those in the circle.

I will continue, with interest, to follow Zappos to see how this transition unfolds.  Will we be seeing more companies, especially start-ups, emerge with fewer managers?  Time will tell…but this may be a new “non-management” style for the business textbooks to capture.

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