"Holacracy."# That's the word of the day at Zappos, the Nevada-based online shoe and apparel retailer. During a four-hour, year-end employce meeting in 2013, CEO Tony Hsich announced that he was eliminating the company's traditional managerial and structural hierarchy to implement a holacracy. What is a holacracy, you ask? In a nutshell, it's an organizational system with no job titles, no managers, and no top-down hierarchy with upper, middle, or lower levels where decisions can get hung up.
The idea behind this new type of arrangement is to focus on the work that needs to be done and not on some hierarchical structure where great ideas and suggestions can get lost in the channels of reporting. The holacracy concept was dreamed up by Brian Robertson, the founder of a Pennsylvania software startup. Its name comes from the Greek word holos, a single, autonomous, self-sufficient unit that's also dependent on a larger unit.* A simple explanation of Robertson's vision of a holacracy is: workers as partners, job descriptions as roles, and partners organized into circles 5°
At Zappos, work (and the 1,500 employees who do it) will be organized around self-governing employee circles around 400 of these circles when the reorganization is complete sometime in December 2014. (It might help you grasp this idea by thinking of these employee circles as types of overlapping employee "groups" but with more fluid membership and individual roles/responsibilities) In these circles, employees can take on any number of roles, and the expectation is that each employee will help out wherever he or she can. Without titles or a hierarchy, anyone can initiate a project and implement innovative ideas. The hope is that circle members will pool ideas and watch out for each other. The goal is radical transparency and to get more people to take charge. Yet, trusting individuals who probably know the details of the job better than any "manager" to work conscientiously, creatively, and efficiently is good as long as there is a way to keep standards high. The last thing Zappos wants is for a "slacker" mentality to take hold.
Hsich has always approached leading his business in unique and radical ways. He strongly believes in the power of the individual and has created a highly successful organization (which is now part of Amazon) that's known for its zany culture where corporate values are matched with personal values, and where "weirdness and humil-ity" are celebrated." However, as the company moves away from the traditional work model to this new system, it may face some challenges. Both Zappos and Robertson caution that while a holacracy might eliminate the traditional manager's job, there is still structure and accountability. Poor performers will be obvious because they won't have enough "roles" to fill their time, or a circle charged with monitoring the company's culture may decide they're not a good fit. Also, just because there are no
"traditional" managers doesn't mean that leaders won't emerge. But it will be impor tant to watch for dominant personalities emerging as authority figures, which could potentially cause other employees to be resentful or to rebel. Zappos says that it will not be leaderless Some individuals will have a bigger role and scope of purpose, but leadership is also distributed and expected in each role. "Everybody is expected to lead and be an entrepreneur in their own roles, and holacracy empowers them to do so." Also, there will be some structure arrangement where "the broadest circles can to some extent tell sub-groups what they're accountable for doing.
•53 But account-
ability, rather than flowing only up. will flow throughout the organization in different paths. Other challenges they're still trying to figure out include who has the ultimate authority to hire, fire, and decide pay. The hope is that eventually the authority for each of these roles will be done within the holacratic framework as well. So, if no one has a title and there are no bosses, is Tony Hsich still the CEO? So far, he hasn't publicly commented about how his own role is impacted.