Should the Zappos Company Put on their Unemployment Shoes?

by Chaise Perez

Introduction

Zappos in the hot seat due to the lack of management skills going on within the company. Originally, they went with the tradition hierarchy way of running things. In June of 2013, an executive decision was made by Zappos CEO, Mr. Tony Hsieh. Tony Hsieh graduated from Harvard, created a company called LinkExchange that he eventually sold to Microsoft, for $265 million, then invested in Zappos. While working for Zappos he became a chief executor, which is when he sold Zappos to Amazon.com, for $1.2 billion. He continued his career at Zappos, as CEO. Zappos switched a management style of Holacracy.

Holacracy

“Holacracy is a complete, packaged system for self-management in organizations. Holacracy replaces the traditional management hierarchy with a new peer-to-peer ‘operating system’ that increases transparency, accountability, and organizational agility,” according to holacracy.org. Holacracy is an easier, more laid back type of management. Its main purpose is to create an easy-going, relaxing, and equal atmosphere. Everyone is responsible of everything they do and accomplish.

Holacracy differs from other styles because there are no managers, or bosses, or any higher power really that employees have to answer to. The employees create their own schedules, their own job titles, their own groups to work with, and anyone could call a meeting at any time about any given thing. Most other management styles have bosses and managers who supervise all the employees to make sure work get done, quickly and efficiently, whether they are hands-on or hands-off supervisors.

Zappos CEO, Tony Hsieh, pushed the decision to adopt this management style because he really wanted to change with the changing city of Las Vegas. Downtown Las Vegas was remotely dead. Tony read about the holacracy style and decided that it was what the company needed to shake things up and possibly become more efficient in the work that his employees were doing.zappos

Some strengths to this style are the fact everyone has a voice, people get to pick who they are grouped with so there should be minimal issues, and the office has a relaxed atmosphere so it should be easy to work in. This seemed to work for the most part, the environment became more relaxed so it was easier to work during the day. Some weakness to this management type are the fact everyone gets to work at their own pace, everyone is responsible for logging the work they do, and it is a really casual environment. Obviously, not everyone agreed with this style. According to theatlantic.com, 18 percent of employees took buy-outs, meaning they left the company.

Critical Analysis  

            I believe that some employees have been resistant to this change because they do like change in the first place, but also because they need certain types of management in order to work. Personally, I am one who likes to be told or given a list of things to do. I also need a deadline in order to get things done. If I have to work on my own time and scheduling, I would either struggle horribly or just not get it done at all. I know of many others who are the same way.

I also believe a few other management styles could work for Zappos if they gave them a try. I believe authoritative and participative would be great management styles for them. Authoritative is the type of management style where the mangers or higher employees give direction but use motivation or incentives to get the other employees to work comfortably but efficiently. Also, participative is the type of management that everyone works together and everyone has a say but there is still a hierarchy in charge to make sure everything gets done.

Citations

H. (n.d.). How a Radical Shift Left Zappos Reeling. Retrieved September 24, 2016, from http://fortune.com/zappos-tony-hsieh-holacracy/
Gelles, D. (2015). At Zappos, Pushing Shoes and a Vision. Retrieved September 24, 2016, from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html?_r=1
Nisen, M. (2013). Zappos Is Getting Rid Of All Titles And Managers. Retrieved September 24, 2016, from http://www.businessinsider.com/zappos-adoption-of-holacracy-2013-12
S. (2016). 6 management styles and when best to use them – The Leaders Tool Kit – Leaders in Heels. Retrieved September 24, 2016, from https://leadersinheels.com/career/6-management-styles-and-when-best-to-use-them-the-leaders-tool-kit/
Photo Citation- blog.mslgroup.com

Holocracy: A New Look for Zappos

by Tyler Starr

There are many styles of management that people use to run companies. With so much competition between corporations in the current market, businesses will do anything that they can to get a slight edge over their competitors. There are some companies that are moving to a new style of management known as holocracy. Like anything, there are pros and cons to moving to this style of management and Zappos went all in when it came to switching to holocracy.

The holocracy style of management is a way of getting rid of the traditional chain of command where there is an ultimate decision maker that will have the absolute final choice about what happens to the company. This also means that even if someone has an idea that they would like to try they have to run it passed others within the group before it can be put into use. The others in the group have to be on board with the idea as well. This system completely does away with the position of a manager and all employees must be ready to give their input on the things that are going on. If they don’t serve a purpose or help out with the tasks at hand within their group then they are not needed and could be let go. Holocracy allows for all of its people to assume a managerial role from time to time and lead certain projects. Any employee could set the agenda for a meeting if they feel that it is a necessary item to be discussed.

Zappos adopted this style of management because the man in charge, Tony Hsieh, wanted to change things up and take a new approach to the way that the company was run. Hopocracy was something that hadn’t been done very much in the past and it would be a complete overhaul to the company’s current situation. As always, when there is a drastic change of that magnitude, the results are going to be just as drastic as the change. Whether that would be for the better or for the worse is the problem at hand when trying to make such a choice about how your company is run.

Hopocracy, just like any other style of management in the workplace, has its advantages and its disadvantages. One of the advantages that hopocracy holds is that it gives lower level employees that usually give little to no input into projects or situations the chance to present what they would like to say. This is good because you never know what kind of ideas or plans somebody might have been keeping to themselves because they weren’t in a position that allowed them to feel comfortable expressing themselves to the rest of their coworkers. Now that they have the same amount of authority as the rest of their fellow employees they will feel much more comfortable putting themselves out there in front of everybody.

With the good side of switching to hopocracy, comes the bad side. It is going to take longer to get ideas put into motion with this plan because even if the idea is amazing it has to be passed through the process of talking about it to your group and that takes a longer time than if somebody in a management position were to just assign people to getting their job done. Another drawback of switching to a hopocratic work environment from a traditional hierarchy is that there are going to people who have worked a long career to achieve a management position. When the switch occurs, these people will be, in a way, demoted back to a much more equal level as the rest of the employees. Although they will probably emerge as some of the best group leaders when the hopocracy is in full swing, they will have lost a lot of their authority.

Gelles, D. (2015, July 17). At Zappos, Pushing Shoes and a Vision. Retrieved September 21, 2016, fromhttp://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html?_r=1

How It Works. (n.d.). Retrieved September 21, 2016, from http://www.holacracy.org/how-it-works/

Markman, A. (2016). The Unseen Consequences Of Hypocritical Leadership. Retrieved September 23, 2016, from https://www.fastcompany.com/3060838/do-leaders-have-anything-to-gain-by-being-hypocritical 

Reingold, J. (2016, March 4). How a Radical Shift Left Zappos Reeling. Retrieved September 21, 2016, fromhttp://fortune.com/zappos-tony-hsieh-holacracy

A Look Into Zappos’ Management Style

by Reagan Wheeler

network-circle1-1940x1829This is a case study on the Holacracy style of organizational management at the well-known company, Zappos. The purpose for this case study is to show how Holacracy works and specifically, how it works for Zappos. This type of management is not the typical kind of management that people usually think of in a large corporation. This new way of managing a corporation is different and intriguing.

A traditional style of management is having one person at the head of a corporation, business or organization. One head person in a department or group of people in the company who ultimately makes the final decisions no matter what another employee says. Holacracy is a style of management where everyone is the boss. Everyone has a voice and is allowed to speak their ideas (How It Works). They can hold meetings, decide what needs to be changed and change it, and even make final decisions on big things. Holacracy gives every employee the authority to do what they feel needs to be done.

Zappos began using the Holacracy style of management in 2013 in some of its departments and then had the whole company using the system in the year 2015. The company’s Chief Executive, Tony Hsieh along with most of the company’s employees, felt at one point that there was too much bureaucracy. Hsieh knew that team-building exercises would not work quite as well as he needed so he decided that Holacracy was the way to go. He felt that the new style would give each of his employees an importance that they might not have felt they had before and that it would give everyone a voice. He saw this as a really good thing to have, but some employees saw some negatives as well (Gelles).

Just like any other style of management, Holacracy comes with both strengths and weaknesses. A strength that comes from this style is it makes sure everyone’s opinions and ideas are heard. This can be very helpful when trying to keep employee satisfaction at a good level. It can also help with the all around atmosphere of the company. Everyone feels important so everyone is going to be happy. But there is also the danger or weakness of some employees thinking they have more power than they actually do. Some might become bossy, which would cause conflict. There is also the weakness of giving too much power so to say, to every employee. If anyone is allowed to call for a meeting at any time then people could be in meetings for unnecessary amounts of time. Company’s who bring in this type of management would have to be careful of that.

I believe that some of the Zappos employees are resistant to this type of management because some might like having one person who is charge or oversees everyone else. They might feel that it’s easier that way. If they are told how things should be done then they do it that way and everything is how it should be. Others might feel that if everyone is in charge then the workload might get a little hectic. Maybe they think that giving each employee permission to conduct meetings whenever they feel will cause production to slow down from everyone going to so many meetings. Since this style takes so long to integrate into an organization the employees at Zappos might just be ready to give up on trying (How a Radical).

I think a bureaucratic style of management would work better for Zappos. That way each level of the company works as their own separate team, having one person who is accountable for that team but not accountable for the members personally. Everyone can still speak their opinions and ideas but it’s just in a smaller group so it’s easier to decide what idea to go with from the whole group before passing it down to the other levels. This style along with a consultive style of communication within the company would be good for them. The consultive side, which accepts input from employees but has final decisions made by someone at the top of the company would allow Zappos to still have the open communication they want but will give it a little bit of structure.

References

Gelles, D. (2015). At Zappos, Pushing Shoes and a Vision. Retrieved September 23, 2016, from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html.

How a Radical Shift Left Zappos Reeling. (n.d.). Retrieved September 23, 2016, from http://fortune.com/zappos-tony-hsieh-holacracy.

How It Works. (n.d.). Retrieved September 23, 2016, from http://www.holacracy.org/how-it-works.

 

Zappos and their Inner-Structure

by Seth Ansell

Holacracy is a type of management style that puts emphasis on self-management in contrast to the more common hierarchy system. This case study will compare the holacracy system to other traditional management styles, discussing the pros and cons of implementing a holacracy-like system. This case study will specifically look at Zappos’ transition into the holacracy style and review the positives the new style has given to the company, but also look at the complications and new challenges for the company due to the change of structure.

Holacracy.org, a website that advocates for the system, describes holacracy as “a complete, packaged system for self-management in organizations. Holacracy replaces the traditional management hierarchy with a new peer-to-peer “operating system” that increases transparency, accountability, and organizational agility” (Holacracy 2016). This is achieved through multiple features: distributed authority, rapid iterations, transparent rules, and roles defined around work. This are much different than traditional corporate culture where there is: delegated authority, big re-orgs, office politics, and specific job descriptions (Holacracy 2016).

Usually in a company, managers will delegate power but yet still retain the final say even if they had delegated the authority away. In a holacracy work environment, teams are self-organized around the work that they are doing and decisions are ultimately made by those groups rather than a single manager. These groups are often referred to as circles. A typical manager would oversee work and make the final decisions, but in this style of management a manager would make sure that each circle is laterally communicating with the other circles. Because employees do not have a specific job description, they can pick up or drop off work and roles easily within their own circle. This is particularly advantageous to allow employees to work where they are needed most and where they can use their talent to the fullest potential (Holacracy 2016).

Another major benefit to holacracy systems is that they do not to re-organize the way other systems may. With such a hard structure of how things must be done, traditional companies usually need to re-organize every couple of years to keep up with changing times. Due to holacracy’s looser structure, anyone can add input on everything. This keeps the organization constantly changing every month or so as the company will evolve on its own to adapt to changes (Holacracy 2016).

Holacracy organizations have transparent rules that everyone must follow; from a team member to the CEO. This gets rid of many office politics which often slow down work because no one knows who to for what. The rules in a holacracy company are clearly defined so one knows who to go to for specific needs. Due to rapid iterations rather than rare big re-organizations, rules can be changed rather quickly if a problem arises were as in a regular company it could take years or more for company policy to change (Holacracy 2016).

Zappos, an online retailer for shoes and clothes, shifted to holacracy. There are no longer managers, anyone can start a meeting. To avoid chaos, rules and policies are strictly enforced. The switch to holacracy was decided on by the company’s CEO, Mr. Hsieh, in 2013. One of the reasons Mr. Hsieh wanted to switch to holacracy was to go back to the close-knit feeling of the company when they had fewer workers, he believes it would increase productivity by improving relationships between workers (Gelles 2015).

 

leed-main
A look into Zappos’ Office. Photo Credit Zappos.com/leed

While many love the anti-hierarchy and less defined job descriptions, some do not like it. Many employees have been slow to accept the new environment, while others let their disapproval be known. The workers who enjoy it says it allows those who would not usually have input in meetings (like a secretary) and gives them an equal voice. Another issue with holacracy, with any highly democratic environment, is with more people who can voice their opinions is that meetings take much longer, with some employees complaining that they have 5 hours of meetings (Gelles 2015).

Some employees feel that the new organizational style was just unorganized chaos and brought uncertainty about the company’s future with no clear direction, which resulted in some employees leaving. Previous managers, now “link leaders”, don’t have the power to get anything done or force employees into getting work done. This left many employees unable to achieve their goals, like one who was aiming to become the VP of human resources because the job no longer exists. Also with job descriptions no longer around, it is difficult to know how much to pay everyone (Reingold 2016).

If I was Zappos’ CEO, I would apply a style of management that still had leaders and managers but allowed upward communication rather than no hierarchy at all. I would implement a modified participative style. It would allow free flow of communication between employees and the management but still retains managers to keep order and a sense of direction. I would still keep the circle style were anyone could participate in the group conservation but I would hire someone to act as a leader of each group. This leader would keep order in the circle’s meetings but also make sure everyone’s voice is heard. This leader would then relay the decisions they have made to other leaders. This allows the company to give employees a sense of direction and order while still having a democratic feel to the company. It also would give employees a goal to reach for career development. With no current leaders or managers, it gives the illusion that employees cannot progress their careers. I feel if the company were to make these changes, then Zappos would still retain the image and democracy like values they enjoy but also give more structure and direction for the company.

 

References

Gelles, D. (2015, July 17). At Zappos, Pushing Shoes and a Vision. Retrieved September 23,

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 23, 2016, from http://www.holacracy.org/how-

it-works/

Reingold, J. (2016, March 4). How a Radical Shift Left Zappos Reeling. Retrieved September

23, 2016, from http://fortune.com/zappos-tony-hsieh-holacracy/

 

 

The Inside of Zappos: Does Holacracy Work?

Photo Credit www.topmanagementdegrees.com
Photo Credit http://www.topmanagementdegrees.com

by Nathaniel Urban

Introduction

The purpose of this case study is to effectively analyze the holacracy style of organizational management that was adopted by the company, Zappos. This case study will provide the foundation of holacracy, how and why it was implemented at Zappos, and the strengths and weaknesses of it. The employee’s reaction to holacracy will later be critically looked at. Another style of organizational management, which may have been more successful at Zappos, will also be discussed.

Holacracy

Holacracy is a system of organizational management that seeks to eliminate bureaucracy and create a diverse workplace where everyone’s voice is heard. In a more detailed definition it is defined as, “A complete, packaged system for self-management in organizations. Holacracy replaces the traditional management hierarchy with a new peer-to-peer ‘operating system’ that increases transparency, accountability, and organizational agility” (Holacracy, 2016). Holacracy differs from traditional management styles because work, not people, define roles, authority is distributed locally among teams, and all the employees are bound to the same set of rules. Manager’s decisions are also not the ultimate authority.

Zappos was founded as one of the first shoe companies to sell shoes online. As Zappos expanded, more managers were being hired and the work environment seemed to be losing its identity. The work environment of Zappos preserves its reputation as being a weird, casual, youthful, and exciting place to work. Tony Hsieh, the man who has run Zappos for 16 years, insisted on keeping that reputation after he felt layers upon layers of bureaucracy were being created. More managers meant more rules and a decrease in employee innovation. Holacracy was adopted to decrease Zappos bureaucracy and increase employee innovation again.

One of the strengths of holacracy are employees having the opportunity to perform different roles rather than being assigned to one job all the time. In the case of Zappos, “Traditional top-down reporting lines are replaced by work circles that operate next to, and on top of, each other” (Reingold, 2016). Employees were able to work with different teams in various departments and had the freedom to express their creative talents where they saw they had the most use. Another strength is the elimination of the traditional hierarchal system of management. A manager’s decision does not have the authority to trump a regular employee’s decision. Derek Noel, an employee of Zappos, said, “My worst day at Zappos is still better than my best day anywhere else. I can’t imagine going back to traditional hierarchy anymore” (Reingold, 2016). Employees are entrusted to make decisions without a higher level manager’s approval.

Critical Analysis

There are weaknesses in holacracy that I believed caused Zappos employees to become resistant in this style of management. The distribution of authority can also be a weakness in holacracy. It can prevent certain employees from reaching their full potential. One Zappos employee, Hollie Delaney, said that her longtime career goal, to become the VP of human resources, was no longer achievable at Zappos (Reingold, 2016). Delaney did not have the opportunity to rise in her experienced field. She was an experienced HR executive who had to spend most of her time working in other holacratic circles.

Holacratic circles leads into another weakness, the continuously expanding number of circles that employees can work in. A circle is what roles are doing and the work and decisions they are owning (Holacracy, 2016). Ms. Kelly, a Zappos employee, said that, “The ever-expanding number of circles and the endless meetings were a drain on productivity. It’s taking time away from getting the actual work done” (Gelles, 2015). A decrease in productivity can affect the future of an organization and its employees. It can also make the employees feel like work is just being discussed but never actually put into practice.

Another style of organizational management that may have been more successful at Zappos could have been the laissez faire style of management. “Laissez faire organizational management structure stems from the French expression meaning ‘to not interfere with the affairs of others”’ (Papa, 2016). The style is made up of separate teams that are created and are made responsible for different tasks. Each team also has the power to make their own decisions. A manager will not participate in the process but the team’s work will have to eventually be approved by the manager. This would have still allowed Zappos employees to have the freedom to utilize their own talents as well as create opportunities for employees to excel in management positions. The management positions could remain limited and the majority of work be completed by regular employees.

References

Holacracy. (2016). Holacracy: How it Works. Retrieved from http://www.holacracy.org/how-it-works/

Gelles, D. (2015, July 17). At Zappos, Pushing Shoes and a Vision. Retrieved from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html?_r=0

Papa, N. (2016). Types of Organizational Structure in Management. Retrieved from http://www.ehow.com/list_6686840_types-organizational-structure-management.html

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

Holacracy: Helpful or Hindering?

by Sabrina Mills

The purpose of this case study is to see how holacracy style management has helped or hindered the work environment at Zappos. Holacracy is a different style of management than at most traditional companies, so of course, their are going to be problems as well as improvements. This case study is to see how holacracy has affected the people at Zappos.

 

Holacracy is a more free kind of management style. Instead of having set heads, or people who set all of the rules and are in charge of everything, everyone has a voice. So even the smallest of positions has a say in how things are run. Through a transparent rule set and a tested meeting process, Holacracy allows businesses to distribute authority, empowering all employees to take a leadership role and make meaningful decisions (How It works).

new-2013-canvas-shoes-lady-canvas-shoes-1908-jpg_350x350

Zappos started the transition to Holacracy is 2013.The first department to try it was Human Resources (Gelles). Mr. Hsieh knew his company needed a fix. He worried that Zappos was becoming more bureaucratic and losing some of its spark (H) . But at Zappos, conventional team-building exercises would not suffice. He needed to get weird (Gelles). So Mr. Hsieh attended a conference in Texas and got the idea of Holacracy from a man named Brian Robertson. After pestering him with questions, he knew that holacracy was they way he wanted to go.

 

Strengths of the Holacracy style of management is that everyone has a voice. A former call center employee. Ms. Kelly said  “A person who just takes phone calls can propose something for the entire company.” (Gelles). No one has to just go with whatever their higher ups say and then keep quiet. And everyone is part of a team.  The teams make up the departments and work together to make ideas and help contribute to the way the company is run. This is called Distributed Authority. Authority is truly distributed to teams and roles. Decisions are made locally (How it works). There are also transparent rules. This means that everyone has the the same rules. Even the CEO. And the rules are visible for everyone to see (How it works).

 

But like most styles of management, there are downsides to Holacracy. Ms. Kelly also said that the procedural formality of Holacracy, the ever-expanding number of circles and the endless meetings were a drain on productivity. “It’s taking time away from getting the actual work done” (Gelles). With all those meetings, anyone can propose an agenda. So with anyone proposing an agenda, sometimes the important things can get skipped over, or neglected. Another downside is compensation. Without a set job description, or a set role in a company, it’s hard to know who earns what. So Zappos came up with badging. Just like Girl Scouts, people can earn, say, a Java Coding badge or a Merchandise Planning badge by fulfilling certain requirements. Zappos says it will pay at the market rate for each skill, but every job comprises many skills (H). But in other companies, it’s harder to figure these things out.

 

Some Zappos employees may have been resistant to the change because they were used to a more traditional style of management. Some people prefer to have set roles and have people above them to keep the company going. Others also have dreams of being a head of something. In Holacracy, their aren’t big head positions like that.  An example of this is Hollie Delaney. She was Head of people experiences before the change, with hopes of someday becoming a VP of Human Resources. She no longer had the muscle to make things happen.  She could no longer do that at Zappos (H). Others are resistant because with anyone being able to make agendas for meetings, productivity goes way down. People start to feel like they aren’t getting enough done with all of the meetings that go on.
Other management styles that would work well at Zappos are more traditional styles. One that would work well is Consultative. Consultative is a system where there are still people at the top, but employees are still allowed to input and have a say in what happens.

 

Citations

 

How It Works. (2016). Retrieved September 23, 2016, from http://www.holacracy.org/how-it-works/

Gelles, D. (2015, July 15). At Zappos, Pushing Shoes and a Vision. Retrieved September 23, 2016, from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html?_r=1

H. (2016). How a Radical Shift Left Zappos Reeling. Retrieved September 23, 2016, from http://fortune.com/zappos-tony-hsieh-holacracy/

PHOTO: http://www.aliexpress.com

Holacracy Management at Zappos: Good or Bad?

by Torin Wetzel

Holacracy is an organizational style of management based upon a peer to peer system that empowers each employee, bound by the same rules, with decisions made locally. This style differs from the more traditional management rules. Holacracy empowers a single employee not to stay in a box and do the same things. Team work and jobs based on the work, not people are important aspects of this form of management. The purpose of the case study is to describe holacracy and how it is applied at Zappos.

“The goal of Holacracy is to create a dynamic workplace where everyone has a voice and bureaucracy doesn’t stifle innovation (Gelles, 2015).” This statement means that the traditional manager no longer exists and it encourages a sort of self-management. Zappos adapted this style of management because it added fresh new ideas and sparked more interaction between employees. Zappos employees can now find roles that interest them and address those things whenever they want. Holacracy is more about a certain job fitting the person rather than giving a job to a position. This style of management seemed to add a lot more passion and enjoyment with the employees.

The biggest strength of a holacracy is the empowerment of the employees. Each employee feels as though they have say, and the best part about it is, they do. Giving employees a voice in the company makes them work harder and have more satisfaction with their job. Holacracy also brings a sense of unity to the employees that is very important when working on new ideas or projects. A holacracy can turn work into a much more enjoyable experience because the employees really feel a part of the company. One employee Derek Noel even stated, “My worst day at Zappos is still better than my best day anywhere else, I can’t imagine going back to traditional hierarchy anymore (Reingold, 2016).” This just shows the type of impact that empowering an employee can have on their work life. Every companies wants their employees to feel this way. One weakness of holacracy is the former management positions having to adapt to the new style. Every employee is so used to management being one way that it can be hard to transition to a totally different style of management. Another weakness is the lack of seniority and performance evaluations. With traditional styles of management, those aspects can drive people to work harder.

I believe some Zappos employees have been resistant to the holacracy style of management because it does have some flaws. Having a lot of group work is great, but sometimes it is hard for people to know what adds up to a full time job if that is all you are doing. Also, working without individual recognition on projects that do well is also tough for people to swallow. There are some big motivational aspects of a job that are missing with a holacracy. Everyone being equal sounds nice, but can lack the availability for growth for some employees.

I believe that a participative style of management  with a little more structure would work well for Zappos. A style in which there are a lot of opportunities for group participation and employee development. In this management style, the employees have a voice, but there is still some structure within management. This increases motivation in both ways, through empowering the employee, and through the opportunity to move up in the company. Having multiple motivation factors can be very beneficial to a company. It seems like Zappos employees want to be able to converse and communicate ideas, but also want to be able to have a sense of pride in their own work. A participative version on management could bring both of those elements to the table.

zappos_team
http://www.forbes.com/sites/danpontefract/2015/05/11/what-is-happening-at-zappos/#1b33b05331b3

References

Advantages and disadvantages of participative management. Retrieved September 23, 2016, from Management Study Guide, http://www.managementstudyguide.com/participative-management-advantages-disadvantages.htm

Gelles, D. (2015, August 31). At Zappos, pushing shoes and a vision. Business Day. Retrieved from http://www.nytimes.com/2015/07/19/business/at-zappos-selling-shoes-and-a-vision.html?_r=1

Gladwell, M. (2016). How it works. Retrieved September 23, 2016, from Holacracy, http://www.holacracy.org/how-it-works/

Reingold, J. (2016, March 04). How a radical shift left Zappos reeling. Retrieved September 23, 2016, from Fortune, http://fortune.com/zappos-tony-hsieh-holacracy/

 

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.

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(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/

Holacracy- a help or a hinderance for Zappos?

by Natalie Antonio

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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. 

References:

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

               holacracy

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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