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The Zappos Exodus Continues After a Radical Management Experiment
- calibraxis 11y agoAnyone have a serious analysis, based on specifics of how they implemented Holacracy, ideally from multiple people with direct experience?
- Outdoorsman 11y agoHad the same question; found some info here: http://wiki.holacracy.org/index.php?title=FAQ http://wiki.holacracy.org/index.php?title=FAQ ...and a list of organizations currently using it here: http://structureprocess.com/holacracy-cases/ http://structureprocess.com/holacracy-cases/
- golemotron 11y agoOnce the fad is over, will we admit that hierarchy can be beneficial? People don't want to admit that. Ideological bias.
- toomuchtodo 11y agoIts hard to determine something is a fad until is over.
- golemotron 11y agoNot really. When people say it must all be X and not Y, you can bet that there's a sweet spot between X and Y.
- ethanbond 11y agoAh, classic middle ground fallacy. What if I say X is we must all stop working and you say Y, we should carry on as we are? Do we fire half the company?
- NhanH 11y ago> What if I say X is we must all stop working and you say Y, we should carry on as we are? > Do we fire half the company? If we can fire half the people currently working in the economy, stop the pretense that "job" is something meaningful on its own and start dealing with the actual issue, things might actually get so much better! I mean, I'm not sure if the GP committed a fallacy or not (he probably did with that blanket statement), but you picked a bad example.
- golemotron 11y agoTalk about a strawman example.
- dalke 11y agoFor two real-world examples: compare "We must ban slavery" to "We must allow slavery", and compare "Equal voting rights for women and men" vs. "No voting rights for women". What's the sweet spot between those two pairs which isn't one of the endpoints?
- golemotron 11y agoThis is funny. You're picking examples where this no middle ground to counter an example where there is: you can have organizations that are somewhat flat with a bit of hierarchy. Do you realize you're doing this?
- dalke 11y agoYes, that was deliberate. You objected to ethanbond's comment because you regarded it as straw man example. I restated ethanbond's objection to show real-world examples where your statement "When people say it must all be X and not Y, you can bet that there's a sweet spot between X and Y" does not apply. Therefore, it is not a strong rule for inductive logic, which is our point.
- rconti 11y agoThe midpoint fallacy is that the truth lies directly in the midpoint. Typically it lies SOMEWHERE in the middle, but the fallacy is meant to point out that it's just as likely to lie very close to one end or the other, as directly in the middle. Of course, if you construct a total straw man argument where we already know the god-given truth, you can show that a second argument will take you further from the truth.
- CuriouslyC 11y agoHierarchy is part of human social interactions, switching to a completely flat organizational structure is just sweeping it under the rug. Better to re-organize to try and match the organizational structure to the actual communication and power structure. If your organization has too many groups and tiers of communication, that is either a staffing problem, or you haven't properly separated business concerns.
- JustSomeNobody 11y agoPersonally I feel jobs like engineering should not be subordinate to management so I'll take flat.
- Pxtl 11y agoMake the tech people the managers. Hire BAs for the soft skills and project management, attach a BA to each tech lead, and they work together to provide direction for their group. BA owns all communication and requirements, Tech lead owns the technical decisions, code reviews, work assignments, and they collaborate on managing the team.
- humanrebar 11y agoThat sounds mostly great. Separate technical leadership from organizational management. Not sure "requirements" necessarily belong to the BA. They probably belong to whomever can identify best with the customer. That's certainly a BA in many circumstances, but hardly all of them.
- thawkins 11y agoWe are moving tne ba/requirements role over to the product managers, the devleads operate virtual teams and pull tesource in on an as needed basis.
- balls187 11y agoWho is responsible for making hiring decisions? Who is responsible for removing engineers that aren't pulling their weight?
- mocko 11y agoI second the "fad" perspective. As a DevOps guy with a great deal of startup experience I briefly worked at a hierarchy-less organisation and found it soul destroying. In the absence of any hierarchy decisions tend to be made by whomever can shout the loudest; projects go unmanaged; the needs of minorities (in my case long-term operational requirements for hosting the damn product) get ignored and appeals to reason with the company's owners were politely ignored. My inner cynic wonders if founders love this fad because it saves the payroll they'd need to spend on experienced managers and absolves them of any responsibility to run the internals of their organisation, freeing them up to focus on overall strategy. The result (admittedly based on a limited sample size - I'm not trying that again) was chaos. Real lord-of-the-flies stuff. One of the first questions I now ask when startups approach me is "what's your org structure like" - and if they haven't got one I run like hell.
- brianwawok 11y ago> My inner cynic wonders if founders love this fad because it saves the payroll they'd need to spend on experienced managers and absolves them of any responsibility to run the internals of their organisation, freeing them up to focus on overall strategy. I totally buy this at the macro level. Just like open office concept saves buying a bunch of walls and more office space. But Zappos? I think they have a history of making the "poor financial" decision to make employees and customers very happy. Seems very out of character to come form them.
- Animats 11y ago"In the absence of any hierarchy decisions tend to be made by whomever can shout the loudest." This. Classic problem with volunteer organizations. If you have the time, you can have formal meetings using Robert's Rules of Order, which are designed to force decisions by voting after discussion. But that's unwieldy within an operating organization. The military is formally very hierarchical but, when planning operations, is much less so. There's a military custom that, when discussing a proposed plan, the most junior people speak first. (The elder Moltke is credited with this custom.) This, of course, is to reduce the tendency of people to agree with their superiors. More than that, it's to find holes in a plan before the enemy does. Once the decision is made, everyone is expected to carry it out fully, and not drag their feet, whether they agreed or not.
- natrius 11y agoHolocratic organizations are not flat. It's a common misconception. Holacracy is just agile redirected towards defining roles in an organization rather than building a product. You take on roles when you can help the organization by doing it instead of having a manager tell you what to do. Those roles are constantly iterated on to make them better.
- MBCook 11y agoI understand every word you wrote, but I honestly think if I took that paragraph and surround it with some anti-Holocracy quotes and put some sort of sarcasm mark around it it would read perfectly. It all makes perfect sense and a small organization, but how could it ever work at the scale of something like Zappos? At that size how can any employee have enough information to make a good decision as to what role in the organization needs filling right now? For that a role that is filled needs to be filled by someone else as the person currently doing it is suboptimal and doesn't realize it. It seems like one of those things where the communication demands necessary to keep it running smoothly between all the individuals would quickly overwhelm what any normal person could actually do. The obvious solution is to have people in charge of relaying messages to other sets of people. Whoops. I added hierarchy.
- natrius 11y ago> At that size how can any employee have enough information to make a good decision as to what role in the organization needs filling right now? It's not necessarily about finding what roles need to be filled in the whole organization. It's more about doing what needs to be done in your department. If something needs to be done in another department, you point out the problem and they decide how to fix it. > or that a role that is filled needs to be filled by someone else as the person currently doing it is suboptimal and doesn't realize it I think Holacracy is actually better at solving this problem than traditional management. If a role isn't being fulfilled well, it's everyone's job to bring that up at a department meeting so the group can decide how to fix the problem. > It all makes perfect sense and a small organization, but how could it ever work at the scale of something like Zappos? I have no idea. I hope they make it work. It sounds better than the status quo.
- melted 11y agoIt'll be same as with Agile: when it doesn't work, consultants will just tell you you've been doing it wrong.
- trhway 11y agoit doesn't work with me (or in my presence) - i don't even need a Scotsman, i grew up in the USSR and it is like telling me that USSR (or China or Cambodia or Cuba ...) were doing socialism/communism wrong. Recently many orgs inside our BigCo have been through couple years of the best Agile/Lean/Scrum/<whatever crap> the money can buy. It was a zombie-like horror show and a spectacular failure across the orgs. And one wonderful day the management and PMs just seem to have waken up and just magically forgot all these words. We're back to normal planning and developing features like nothing happened in those 2 years. Magic.
- hderms 11y agoHow do you characterize your normal mode of development? Just curious if you would mention a brief overview of how you do things
- trhway 11y agolike it has been for the last 25 years starting at the University and through the places i worked in Russia and here - natural cycle of plan, design, implement of the stuff slated into the next release (ie. the dirty word of "waterfall"). It has mostly been pretty large projects with multiple teams involved (though even in 1988 in high school with a friend developing a small game we followed the same "process"). As someone said "you can't successfully run marathon by running a series of sprints". One can try him/herself to run even a couple of miles by running it as a series of sprints to understand the foundational principle from systems analysis about the cost of low latency and synchronicity (normally one would expect that software engineers are aware about it without self-mutilating experiments, yet here we're ... to really feel the pain make somebody tell you, strictly each 20 seconds, where to run the next sprint) - those being the 2 main paramount features of Scrum ( note : Agile,insisting on low latency while relaxing somewhat the requirement of synchronicity, is a little bit less disastrous on its own, ie. when isn't attached to Scrum).
- sremani 11y agoI suggest people read the comments on article. 1. Zappos offered a very attractive payout and most people at an average company would take it. 2. 14% in first few weeks and 18% thus far, so after first few weeks the "exodus" nearly halted to the low 4%, that is low. 3. Radical ideas, take some time to adaption.
- hobs 11y agoYou cant come to the company with a radical new plan and have no idea what the answers to basic questions like "How am I going to be compensated?" before switching over to that strategy, that's highly questionable.
- gavazzy 11y agoI bet a lot of those people who left did the following: 1. Take the payout 2. Take a few weeks vacation 3. Get a new job (when you switch jobs you usually get a raise).
- TheCowboy 11y agoThis might be a case of how not to flatten an organization's structure, but there is always heavy turnover during any restructuring. There is a key paradox of implementing a "holacracy" in an existing organization. An organizational hierarchy is trying to force non-hierarchy on itself. A prerequisite for such rapid change seems to require an organization that can rapidly adapt to change. But part of the argument for flat organizations is creating adaptable businesses. I haven't read what problems prompted Zappos to push for these changes. Was an overly bureaucratic hierarchical culture holding a Zappos back from continued success? Is this admitting that something was wrong with their supposedly strong culture, but missing the actual problem? This seems part of a larger trend on insisting hires and workers should have an almost cult-like desire to be with their current employer. And leaders who obsessively manage their company's culture and its perception. People who don't buy into the whole result are treated as non-believers unfit to be part of their "mission".
- golemotron 11y ago> I haven't read what problems prompted Zappos to push for these changes. Was an overly bureaucratic hierarchical culture holding a Zappos back from continued success? Religion is my bet.
- randycupertino 11y agoIt's that the CEO is kooky and likens himself a management guru, so he wants to try out his ideas while cultivating press.
- deleted 11y ago[deleted]
- faike 11y agoI'm concerned Hsieh decisions show a blatant lack of concern for maintaining a meritocracy. Also it doesn't really seem like Zappos cares about attracting talent. I might even venture to say the decision is driven by the chance to maximize profits. Imagine how much money you save by firing all your manager. I've worked at companies that stress how important their bullshit "culture" is. It's usually to distract from shitty compensation and rare promotions.
- dangrossman 11y agoI found the Super Cloud bit interesting. 350 employees haven't been able to move an e-commerce store onto Amazon's infrastructure in 27+ months. "For well over a year, Van Beek wasn't even sure the migration was technically possible ... the difficulty of this effort is almost unfathomable". Are the services Amazon makes available to its own teams substantially different from AWS? If so, why not just use AWS, and figure out the internal billing?
- x0x0 11y agoconsider that running a complex piece of software on o&o hardware is very different than amazon. You have to re-architect your app to tolerate (1) hardware just disappearing (yes that happens in a data center but much less often than in amazon), (2) generally lower-powered hardware (no giant db servers running on TB+ ram / fusion-io drives / bonded 1g ethernet hardware), (3) often shitty network and ebs performance, (4) generally a very different HA architecture. Not to mention ops relearning everything they know about how to keep your site up.
- dastbe 11y agoWhile there are differences in what people use internally vs externally for some operations (see Apollo vs CodeDeploy in a few blog posts and talks), what they're talking about here is migrating Zappos onto/into the retail infrastructure and applications.
- ww520 11y agoIt's probably rewriting Zoppos retail app in Amazon's retail platform. That's like a redesign, re-architect, and rewrite of the whole app, plus the whole backend pipeline. That's a huge task. Also retail is driven by huge amount of data: product category, inventory, pricing, customer info, experiment data, marketing, ad, clicks, billing, etc. Migrating those data without interruption with live operation is like changing engine in mid flight.
- BinaryIdiot 11y agoYou're right it's pretty challenging but 27+ months and 300+ engineers challenging? I would have suspected to take half the time which makes me wonder what their architecture originally looked like and what they've been doing for so long.
- cicloid 11y agoI'm more intrigued by the "Super Cloud". How different is it from the consumer AWS?
- jon-wood 11y agoMy guess is that it's a collective name for all the retail systems Amazon are running to manage logistics, inventory, and everything else that makes an e-commerce business tick. A lot of that may well be running on AWS, although whenever that comes up you always hear people mentioning quite a few of their core systems have yet to be migrated.
- jfb 11y agoWhat a surprise: Zappos, as a division of Amazon and not a profit-seeking free-standing company, has plenty of capital to waste on humoring their sales-hustling CEO's lunatic ideas about human potential.
- vskarine 11y agoInteresting opinion on the subject: http://themodernteam.com/flat-will-kill-you-eventually-why-every-company-needs-structure/ http://themodernteam.com/flat-will-kill-you-eventually-why-e...
- nosuchthing 11y agoAnother nice opinion article which cites the tendencies of "flat" organizations to create opaque hidden hierarchical political structures, with some references to Github, Valve, and 60's commune and feminist groups. http://www.wired.com/2014/03/tyranny-flatness/ http://www.wired.com/2014/03/tyranny-flatness/ Critics say flat organizations can conceal power structures and shield individuals from accountability. This idea dates to the 1972 essay The Tyranny of Structurelessness by Jo Freeman, who describes her experiences in “leaderless” feminist organizations in the 1960s. “There is no such thing as a structureless group,” Freeman wrote. “Any group of people of whatever nature that comes together for any length of time for any purpose will inevitably structure itself in some fashion.” The problem with supposedly non-hierarchical groups, she wrote, is that power structures are invisible–and therefore unaccountable. That inevitably leads to disfunction and abuse. Charismatic leaders could use their position to advance their own agenda, award desirable tasks and projects to an “in group,” and shift blame for mistakes. and more on Valve's flatness in practice, http://www.wired.co.uk/news/archive/2013-07/09/valve-management-jeri-ellsworth http://www.wired.co.uk/news/archive/2013-07/09/valve-managem...
- deleted 11y ago[deleted]
- MrBuddyCasino 11y agoCharismatic leaders could use their position to advance their own agenda, award desirable tasks and projects to an “in group,” and shift blame for mistakes. And how exactly does that differ from formal hierarchies?
- serge2k 11y ago
- kabdib 11y agoThe Zappos Holacracy documents I read were nuts. Bad, batshit crazy. "Tensions" and "next-actions" and "accountabilities" and Policies and Domains and . . . the Holacracy Constitution reads like they were going for flat, but freaked out and decided to obfuscate a power structure after all. The Glassfrog documents are the hesitation marks of ditching a hierarchy. It's like they want people to execute a script rather than actually do work. At its core, Glassfrog is afraid of itself. Try some of the documentation here: http://www.holacracy.org/constitution#art1 http://www.holacracy.org/constitution#art1 (Oh, and it looks like there are companies that will consult with you and help you move to a Holocracy. Big surprise). I work in an org that is flat. There's none of that nonsense. You don't need it. You really don't.
- bcx 11y agoHow many people are in your organization?
- ErikVandeWater 11y agoThe documentation reminds me of one of my favorite quotes: "Consultants invent these kinds of phrases to label things we’ve all known all along—it’s a perversion of business life that fancy words always cost more than plain ones, even though the plain ones are more valuable." From Agile Development with Rails, 4th edition.
- bhauer 11y ago> From Agile Development... I assume the irony is intentional?
- balls187 11y agoValve, a company that also practices a system similar to holacracy, mentions that it's not the right fit for some (most?) people. But that style, is the right fit for Valve.
- jfoutz 11y agomumble mumble chapter 3 mumble. but, yes. valve does make some pretty cool stuff.
- balls187 11y agoWell there in lies the beauty of Valve. From my outside observation, no one is making a HL3 / HL2 Ep3, because that project can't get critical mass to build (although there is a part of me that wonders if they'll pull it out for the SteamVR launch). It's an interesting method to build entertainment software--build something you're passionate about and can get others passionate about it, rather than taking money from a publisher to build something that has someone made a business case for. That philosophy doesn't work unless you have deep pockets, which Valve does.
- maxxxxx 11y agoI don't know how a flat organization works in practice but to me it sounds like you end up with top management secure in their jobs and having their equity and everybody else has to constantly struggle to stay relevant. This may work for some people but most people prefer having some security in their position.
- bane 11y agoBecause humans, flat organizations always end up with an informal hierarchical structure, and that structure very rarely optimizes for organization success and almost always optimizes for success of the people who've clawed their way to the top of that hierarchy.
- jameslk 11y agoThat's actually how it works in regular corporate hierarchies too. Those who are good at politicking, making friends with higher-ups and know how to cover their asses usually outperform (success-wise) those who just do a good job. A good well-cited read on this is Power: Why Some People Have It and Others Don't.
- bane 11y agoTrue, all groups of humans form informal hierarchies, even in the presence of formal power structures. What formal hierarchies have that flat organizations don't is the ability of the formal hierarchy to use normative actions to drive the optimization function to favor the organization and not the people at the top of the informal hierarchy. e.g. a loud mouthed developer can't force the CEO to do something they don't want, while a CEO can fire a disruptive employee
- AndyNemmity 11y agoI don't know what an informal hierarchical structure means, and can tend to guess at things that I think it might mean. What are the differences between an informal hirearchy, and a formal hirearchy that makes them unique?
- rorykoehler 11y agoRegardless of your prejudices and perhaps negative experiences with holacracy, I would highly recommend the book, 'Reinventing Organisations', that Zappos' employees were encouraged to read. You can download it here: http://www.reinventingorganizations.com/pay-what-feels-right.html http://www.reinventingorganizations.com/pay-what-feels-right... It is a fascinating read and will help you think about how to structure your organisation regardless of what structure you deem fit. The most interesting insight, which I can see most of the commenters here are probably not aware of (as I wasn't), is that in Teal organisations (such as ones who implement holacracy), it is recognised that different structures and behaviours are applicable depending on the situation. For example in a war an army better have some hierarchy or they will get wiped out but in a modern company the hierarchy is not as necessary if at all. Anyways, even if you never touch a holacratic model, go read the book. Guaranteed to be at least a rewarding thought experiment.
- metafunctor 11y agoThe concept of paying for people to leave does not make sense to me. I see companies doing it, and seems to me that they're doing it so they can reduce headcount without having to actually fire people. Thing is, the people who will take the buyout will be the ones who are confident that they can find another job. The company is left with the people who don't really care about their job, are afraid they may not be able to get hired anywhere else, or both. Does this actually ever work?
- spacecowboy_lon 11y agoNo I recall when British telecom had generous voluntary redundancy several years pay plus 6 years pension payments. One guy I know got over £200k mostly tax free They lost a lot of key technical people who took a huge pay off and joined a competitor. And I know that for some specialties (radio planners) who where not allowed to go - the competition brought them out by paying $100,000k starting bonuses.
- jhou2 11y agoIt works for the HR executives in charge. They can reduce headcount without bad PR, with the ostensible rationale that they are cutting the ones who don't have the passion and loyalty for the company.
- norea-armozel 11y agoI like the idea of parallel/independent organizations but I think the problem I see with their use in businesses is the fact that it can impede the very purpose of a business: to make a profit from a good or service. To achieve part of that mission is to specialize where you have someone directing production (managers) and someone who knows how to produce a part of the good/service (labor). Now, I do believe managers and labor can be the same thing at least in terms of dual roles. But to get there you can't bomb out an existing firm's structure which is what I see Zappo's CEO doing. The turn around is either going to take a VERY LONG TIME or it may never happen at all with high churn of employees.
- tamana 11y agoWhat's interesting about holocracy is that informal hierarchies tends to play towards women's social strengths more than formal hierarchies do.