Zappos! and Holacracy: Adopt or Leave

photo credit: Travel Sponsor: Zappos via photopin (license)
photo credit: Travel Sponsor: Zappos via photopin (license)


In her study, Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy (John Wiley & Sons, 2009-4-24), Olivia Rudd defines HOLACRACY as a system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested at the top of a hierarchy. Basically, a business is not traditionally managed, its hierarchy is composed of multiple self-regulating units that function as autonomous wholes or independent clusters.

Zappos! CEO, Tony Hsieh, who is known for out of the box management and leadership, in a rather lengthy email to his employees, told them to adopt Holacracy or find another job. He wants them to move quicker towards “self-management, self-organization, and more efficient structures to run our business:”

Hsieh defines holacracy and what it means to Zappos! and how other successful companies have used this tool versus a traditional pyramid management hierarchy for years.

In the email, he also addresses misconceptions of holacracy. He quotes Gary Hamel:

“No one can kill a good idea
Everyone can pitch in
Anyone can lead
No one can dictate
You get to choose your cause
You can easily build on top of what others have done
You don’t have to put up with bullies and tyrants
Agitators don’t get marginalized
Excellence usually wins (and mediocrity doesn’t)
Passion-killing policies get reversed
Great contributions get recognized and celebrated”

We love the idea of holacracy and self-management. What do you think?