Holacracy- a help or a hinderance for Zappos?

by Natalie Antonio

Holacracy according to Zappos

Holacracy can be defined as, “ a governance structure characterized by a distribution of power among self-organizing groups, rather than the top-down authority in the typical hierarchical corporate culture model” (whatis.com, 2015). Some companies in the past have chose to use the typical employment hierarchy where the boss is at the top and the employees are underneath of the boss, doing whatever he or she says. More and more companies are using a new form of management, that Google has some what made famous. At the Google headquarters they are known for having some pretty special amenities for their employees, such as nap pods, smart cars, and prototypes of their latest technology. Google’s goal in this was to spark the productivity in the employees. Other companies have started to look into this way of management as well. Holacracy was founded by Brian Robertson, in 2001 when he founded his very own software company, called Ternary Software. This was a company that became a place for experiments to be designed that answered questions. This company shifted in 2007 from Ternary to HolacracyOne which was formed by Robertson and Tom Thomison to make it more marketable to other companies. 

The idea of holacracy at Zappos was developed in 2013, when Tony Hsieh, Zappos’s CEO. The system rids the company of higher management, and the system asks employees to design strategy decisions and their outcomes on a “web based app called Glass Frog.” What Zappos did not expect from this use of holacracy was confusion. The process of self governing came with the idea of workers not being sure how to tell if actual work was being accomplished.

Zappos, an online shoe store, has always had some kind of unconventional human-resource philosophy, the company has an offer called “The Offer” to new recruits. This allows those people an opportunity to accept a $2,000 stipend instead of starting the job. The company excels on the attentiveness of the customer service as well as the devotion to it’s workers. “The Offer” is the company’s way of weeding out the ones who are not ready to participate in the company’s work ethic. This has been an unusual turn to the management that the employees were accustom to. According to The Atlantic, this may have lead to the company’s “exodus” because about 18% of the company’s staff has left, to take buy outs in other businesses. many of the employees chose to leave because they did not want the responsibility or because they disliked the idea of holacracy. According to Forbes, holacracy has some flaws, because there is not one clear boss someone has to step up and be the leader, therefore making that person in charge for that specific project. Forbes also states that holacracy does have a hierarchy, but without the implication that it is run by bosses and negativity.

In conclusion from the various articles that I have read, I have gotten a good grip on what holacracy is, and how it may or may not work. In a company that is as large as Zappos, I do not think that holacracy is a good idea because I feel there needs to be one clear boss, that person does not have to be nasty or think that he or she is father up than the other employees. I feel that there needs to be one clear boss to accomplish the work that needs to be done. Because if no one steps up, or if the employees are feeling particularly introverted, then those employees may not be able to step up and accomplish the work that is in front of them. I think that in certain settings that holacracy can be a good thing, but too much of a good thing can never be good. 


Holacracy and Self-Organization. (2016). Retrieved September 22,2016,from https://www.zapposinsights.com/about/


Holacracy backstory. (2016). Retrieved September 22,2016, from http://www.holacracy.org/backstory

Lam, B. (2016, January 5). Why Are So Many Zappos Employees Leaving? Retrieved September 22, 2016,

             from http://www.theatlantic.com/business/archive/2016/01/zappos-holacracy-hierarchy/424173/

Denning, S. (2015, May 23). Is Holacracy Succeeding At Zappos? Retrieved September22, 2016, from http://www.forbes.com/



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