Zappos, the Las Vegas based apparel retailer, is transitioning away from a traditional management structure to a less hierarchical, manager-free system called Holacracy, according to an article by former Business Insider senior editor Aimee Groth
Holacracy, which originated with a former software company founder turned consultant named Brian Robertson, eliminates formal job titles, managers, and traditional hierarchy in favour of a series of overlapping “circles” where people can have several different roles.
The goal is to increase the level of accountability, since employees are held accountable by all their coworkers rather than a single manager, as well as transparency in order to quickly and publicly resolve sources of tension. That’s reflected in the name, based on the Greek word “holon,” which means “a whole that’s part of a greater whole,” according to Groth.
There will still be leaders who “hold a bigger scope of purpose for the company,” according to John Bunch, one of the Zappos employees leading the transition.
Groth reports that at the all-hands meeting where the transition was announced, Zappos CEO Tony Hsieh said that for the majority of companies, “there’s the org chart on paper, and then the one that is exactly how the company operates for real, and then there’s the org chart that it would like to have in order to operate more efficiently. … [With Holacracy] the idea is to process tensions so that the three org charts are pretty close together.”
Another high profile adopter of the system is Medium, the blogging service started by Twitter co-founder Ev Williams. First Round Review has a great and detailed breakdown of what the process looks like in action. But while Medium employs around 50 people, Zappos has 1,500.
Medium seems to have adopted Holacracy pretty successfully, and the company’s head of people operations, Jason Stirman, told First Round Review that it is “hands down, by far the best way I know or have ever seen to structure and run a company.” However, he acknowledged to Groth that it’s not very “human-centric” and can make it difficult to get feedback and mentorship –
something that could be amplified at a much larger organisation.
Still, Zappos is an explicitly people and customer-focused company, and this wouldn’t be the first unusual management technique instituted there. The company requires all hires to go through the training customer service representatives attend, spending two weeks on the phone. It also has an intentionally inconvenient office to encourage employee collisions. So they just might make it work.