Holacracy: Giving Zappos A Whole New Meaning

by Morgan Bittengle

The atmosphere of Zappos workplace changed its ways starting in 2015 and never looked back. Holacracy is not just changing the workplace, it changes the attitudes of the employees in the workplace. It all began with a man named Brian Robertson, who owned Ternary Software where he was a computer programmer. He developed this style of work environment where each employee was equal. There were no managers and bosses, everyone just developed and picked up “roles” in the workplace. When Mr. Hsieh heard of this, he instantly fell and love and wanted to implement this in with the Zappos employees. In the remains of this post, you will be able to see some of the benefits and some of the downfalls of holacracy.

“Holacracy replaces the traditional management hierarchy with a new peer-to-peer ‘operating system’ that increases transparency, accountability, and organizational agility”(Holacracy, 2016). This differers greatly from traditional management styles, where for example, each employee had one specific job and they were under the rule of a superior. Holacracy, on the other hand, enables everyone to basically decide what project they want to work on within the company. Every employee has roles and they aren’t restricted to just one thing. This creates a more relaxed and open environment in the workforce which can then lead to greater productivity and ideas for the company.

“As Zappos grew, the innovation slowed. The staff expanded, more managers joined the ranks, and the freewheeling culture lost momentum” (Gelle, 2015). With this in mind, Mr. Hsieh knew change needed to happen and holacracy was the perfect move. There are many strengths to Zappos adopting this holacratic environment, one being the health of the employees. Hierarchy in a workplace causes a lot of negative stress on people. “The stress of belonging to hierarchies itself is linked to disease and death. One study showed that, ‘The lower someone’s rank in a hierarchy, the higher their chances of cardiovascular disease and death from heart attacks.’ – Harvard Business Review” (Stevens, 2016). With knowing this information, one can see why employees may feel like the holacratic approach would be beneficial to all.

When it comes to the weaknesses of a holacratic workplace, some employees may feel it would be chaotic. Not having that one person in charge, telling others what to do, could seem like a wrong move because nothing would get accomplished. That is where the weakness comes in because some people may not be open to trying to work in this type of environment.


(Employees at Zappos, enjoying the view. Zappos.com)

Some longtime employees may have been resistant at first over this new workforce environment, and with good reason. When things take a 180 twist so drastically, it will cause some commotion and confusion. Some employees who mentioned having long-term goals as to what they wanted to achieve in the company were disappointed when they found out they wouldn’t be able to “advance” positions to get them to be in charge of other employees. Change is difficult even when you know the outcome will be in your favor. I personally believe Zappos employees had all the right to be hesitant at first.

If Zappos were to try another management style or way, they may think about trying to keep some similar holacratic styles but also have a few authoritarian figures so that there can still be some sort of hierarchy within the company. Informal relationships in the workplace would be the best bet to keep because there can still be order but it is more relaxed with rules and norms.

Gelles, D. (2015, July 17). At Zappos, Pushing Shoes and a Vision. Retrieved September 22, 2016, from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html?_r=1

How It Works. (n.d.). Retrieved September 22, 2016, from http://www.holacracy.org/how-it-works/

Reingold, J. (2016, March 4). How a Radical Shift Left Zappos Reeling. Retrieved September 22, 2016, from http://fortune.com/zappos-tony-hsieh-holacracy

H. (2016). Following In Zappos Footsteps: Is it Time to Shift to the Holacratic Workplace? Retrieved September 22, 2016, from http://www.business.com/management/is-it-time-to-shift-to-the-holacratic-workplace/


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