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Why Are So Many Zappos Employees Leaving?

71 points by pmcpinto 11y ago

zanewill9 11y ago
This was a fascinating (and daring) experiment. Sad it ended up like this.
- static_noise 11y ago
  It doesn't end here, though. A high turnaround was to be expected. The interesting part would be if things stabilize again.
- TheGRS 11y ago
  Zappos, in the article at least, seemed pretty fine with how it was going so far.
nyan4 11y ago
$2000? That's it? Not surprising that "Less than 2% of all prospective employees end up accepting the offer."
- static_noise 11y ago
  I was looking it up how many months with 2000$ that stipend would be. Turns out it would be a single payment. Also I don't know if there come any strings attached.
- jknightco 11y ago
  Keep in mind that Zappos is based in Las Vegas, and that the vast majority of their employees are support staff likely making under $30K a year. If $2K is almost as much as you make in a month you might consider taking the payout and finding a new job if you're not happy with the culture.
  - overcast 11y ago
    I feel like people making only $30K a year, aren't the type of people to just jump ship because the "culture" has changed. They generally want to keep scraping by.
    - cthalupa 11y ago
      You're mixing up the buyout option that is a result of the switch to holocracy and the 2k option to quit you get when you first start.
  - xenadu02 11y ago
    This is also important to remember; most customer service organizations exemplify micro-management, with a whole layer of people who make it their job to prevent the reps from helping customers by gaming useless metrics. Having a flat customer service organization (and valuing making customers happy) sounds like a great way to filter for reps who can think independently and find ways to make customers happy (and themselves more efficient).
- morgante 11y ago
  $2000 to quit a job you just started seems pretty good though. You should still have your job search apparatus ready and could hopefully get another company quite quickly. I'm actually surprised they don't see more people gaming the system, applying to get the bonus without any intention of working at Zappos.
perseusprime11 11y ago
This is what happens when your management goes down a rabbit hole called Teal organization instead of evolving over time.
codeonfire 11y ago
Probably all the managers are leaving. They can't do non-manager jobs emotionally or logically. Microsoft moved some managers to individual contributor roles a few years ago and people were openly crying about it. They wouldn't have power over people any more and can't deal with it because that's all they know/want. This is a great opportunity for Zappos to backfill with makers and doers and realize what they set out to accomplish.
- TrevorJ 11y ago
  Management is a role with some very domain specific skills, just like many other white collar jobs. If you've studied and trained to do a particular job and then get moved to something else, of course that's going to be difficult. It seems a bit odd that you ascribe that emotion to some personality flaw.
- Spooky23 11y ago
  More like they see the writing on the wall when a charismatic founder rolls out some strange philosophy.
- mabbo 11y ago
  I think you've got a very poor picture of what management is about- perhaps you've had a string of very bad ones. Power isn't the benefit of the role unless you're a sociopath or an asshole. Managing people is a complex problem that requires a specific set of skills which take time and practice to get right. I've known (and reported to) incredible managers who not only got us to achieve more than our team would have otherwise, but made us enjoy our jobs more in the process. I've also had managers who've lacked in that skillset, and had the exact opposite effect. And it was never because they were assholes or sociopaths- they just didn't have the skills they needed for the job. I may take on the management role someday, not because of some dream of lording over people and giving orders (that part actually turns me off) but because it's a new domain of complex problems.
  - meric 11y ago
    I got promoted into a team lead once - I told my employer I wasn't ready, and he told me I was underestimating myself. I took advice and decided to give it a shot. I hired some great people to join the team. We finished the product in time for the deadline but everyone was spent, and people left, because I didn't have the management skills to know when people wanted a mentor so they can learn, when people weren't performing and should have been warned, when people needed a raise, etc. And so the team weren't happy because of those things. Long story short, the job was too hard, and we hired an experienced person to perform the role instead, and I get to go back to my old role. :)
deleted 11y ago
[deleted]
ebbv 11y ago
When the holocracy was first introduced early last year and it resulted in more employees than predicted immediately leaving, Hsieh apologists said "It's ok, Zappos will be stronger for it." But over the course of the year, people keep leaving, and people keep making excuses. I think we have enough proof that the flat management structure doesn't work as well as a traditional hierarchy for a company of Zappos' size and in its industry. But I guess some people won't believe it until the company actually goes down the toilet or backtracks.
- codeonfire 11y ago
  Is the company unable to function? Can I not go to zappos.com and buy something? Zappos just reduced their payroll expense by tens of millions of dollars probably due to deadweight attrition. So I think they will be doing much better.
  - ebbv 11y ago
    As I said: > But I guess some people won't believe it until the company actually goes down the toilet or backtracks. You fall under that category. The criteria that Zappos website has to actually go down in order for it to have been a bad decision is a pretty bad way to make a judgment call. If you ran a company that way you'd never fix a bad decision until it was too late.
- bkirkby 11y ago
  note: i'm a former engineering manager at Zappos. (still with the company, just not a manager any more) you're making many mistakes in your opinion: 1. correlation and causation. this latest round of people leaving is only because there was an extension to the offer made in may for a group of people. far less left this last time than anticipated. 2. you aren't running the test long enough. because of this second offer, the hard work of self-organizing was largely being delayed. it actually feels like we are just beginning (at least in tech). 3. you are measuring the wrong thing. in no way does an attrition rate reflect the success of self-organization. any organization can be made better byt he right people leaving. the metrics i'm interested in are: 1) employee happiness, 2) customer delight, and 3) innovation rate. feel free to email me in a year to get an idea of what those are like then. (notice, a profitability metric is just an assumed by-product of those measurements, although it's not what we focus on).
bovermyer 11y ago
The more pressing question is, why does this keep popping up on the HN front page every couple days for the last week?
blantonl 11y ago
I think one important issue is how these managers, who's roles and titles were diminished with this holacracy approach, will sell themselves as managers in future roles outside of Zappos. These days no one really envisions working for the same company for 30 years. It will be tough for leaders within Zappos to show on paper their leadership progression. I think the idea of holacracy has legs, but I haven't seen any other implementation that would lend credence so far.
- late2part 11y ago
  I think a lot of companies like Google/Facebook/Crowdstrike/Uber will appreciate someone who was successful in an environment like Zappos' holocracy experiment.
  - w1ntermute 11y ago
    That limits you to the tech industry, when many non-technical managers may look to go to other retail or apparel companies, which will be much more conservative.
  - jessedhillon 11y ago
    How did Crowdstrike manage to be mentioned among the likes of those other three?
- aNoob7000 11y ago
  I personally think what Zappos is doing wouldn't work in a lot of businesses. Holacracy to me sounds like Agile or DevOps. Maybe one or two places are doing Agile/DevOps correctly and everybody else is just doing some kind of bastardize form of Waterfall, or as they call it at my place, "AgileFall".
codingdave 11y ago
People do not like change, in general. So when a company completely changes the way it operates, and at the same time offers a buyout to anyone who doesn't like the changes, I'd be asking the question the other way - what are they doing that they kept more than 80% of people in that scenario?
- late2part 11y ago
  It's worth noting that Hsieh's momentum is a bit hurt right now. His efforts to revitalize old Vegas don't seem to be working, and this 21st Century Motor experiment seems rough as well.
joshmn 11y ago
People leave managers before they leave companies.
leeny 11y ago
Anyone have visibility into which teams had the most attrition?
spilk 11y ago
In this no-managers/no-hierarchy model, how does one increase their salary?
- jes5199 11y ago
  Same way the rest of us do: by getting a job at a different company
- sopooneo 11y ago
  Here's an article attempting to answer that: http://www.businessinsider.com/how-zappos-determines-salaries-in-holacracy-2015-7 http://www.businessinsider.com/how-zappos-determines-salarie... But from my reading it sounds like the truth is at least partly: by fudging it.
- sageikosa 11y ago
  Reputation? Which, in itself, will lead to a new unaccountable hierarchy of mutual back-scratchers...
  - TulliusCicero 11y ago
    This is exactly the problem with excessively 'flat' organizational structures that seek to do away with hierarchy. You can't get rid of social power, you can only change how it's distributed. Spreading it out more equitably among all employees sounds good until you realize that it makes decision making even more opaque: when everyone is responsible, nobody is.
- hueving 11y ago
  there is still a hierarchy of important people that will always emerge. It's just much harder to see now. Once you impress these important people, you can have a raise.
  - SideburnsOfDoom 11y ago
    > there is still a hierarchy of important people that will always emerge. It's just much harder to see now. Indeed; and in fact it is now obligatory to mention the excellent Essay of ancient wisdom on the subject: The Tyranny of Structurelessness http://www.jofreeman.com/joreen/tyranny.htm http://www.jofreeman.com/joreen/tyranny.htm
pcote 11y ago
I don't blame these people for leaving. Self-governance is hard. Most kids are taught to obey their authority-figure teachers. They eventually grow up to obey their authority-figure bosses. So when a company like Zappos goes flat like this, it flies in the face of over two decades of training for managers and subordinates alike. That being said, the new setup is great for people who are used to that level of independence. Were you a freelancer? In an early stage startup? Came from schooling where you were in charge of your education? If that's you, the new Zappos is a natural fit. It also puts you in a tiny (lucky) minority of the potential candidates who are.
- oh_sigh 11y ago
  Pretending that Zappos has self governance is laughable. All they have is governance that lacks transparency
- draw_down 11y ago
  It is slightly shocking to me the amount of people here willing to take this organizational change at face value. Maybe it's exactly as theorized, but maybe you just don't know the failure modes yet.
marknutter 11y ago
I assume this keeps popping up on Hacker News because of schadenfreude, but I'm going to say something controversial (and from a completely uninformed viewpoint), and that's "good riddance". Of all the managers I've ever had, maybe 1 or 2 of them have been any good at it. And by good at it, I mean they made me better at my job. All the other managers I've ever dealt with succeeded primarily in making my job harder to do. Good managers are glorified butlers. Their job is to do everything and anything they can to accommodate those whom they manage, and recognize that because they aren't actually creating anything, they defer to those who can and do whatever they can to help them do it. If they came from a creator position, then their main challenge is to not forget what it was like to be a creator and advocate for them as though they still are. One of the major problems with the whole concept of managers is that they are typically higher than the creators in the corporate hierarchy, and often get corrupted by that. They are proud to be managers because it's a promotion in most organizations, but they have to deal with the uncomfortable fact that they no longer actually make anything (or never did to begin with). Thus, they try to find other ways to make themselves feel valuable, and that often involves inventing extra work for the creators to do. If I ran a company, managers would be butlers. Their compensation would be directly tied to the level of happiness of the creators they are serving. I might even let the creators they serve set their salaries. I currently have a manager whose salary I would set higher than my own because he completely embodies this type of management style. If anybody on the team needs anything, he does it with a smile. He is our advocate, our cheerleader, our mediator, our friend, and our faithful servant. It's not a coincidence he's gotten employee of the year (based on embodying corporate values) two years in a row. I really appreciate what Zappos is doing here and I sincerely hope it works out. The worst thing that could happen is they lose their resolve and give up on it. That would be a very unfortunate signal to the rest of corporate America that the status quo is working just fine, and it would make me very sad indeed.
- andygcook 11y ago
  What you're describing is akin to servant leadership - https://en.m.wikipedia.org/wiki/Servant_leadership https://en.m.wikipedia.org/wiki/Servant_leadership
  - 11y ago
mwsherman 11y ago
Others have said this well but I’ll emphasize that the article doesn’t present the case that it’s failed or failing – there is a ways to go to find that out. If their service starts to suffer, then we have a signal, perhaps. This may turn out selecting for the right people. I’ve learned as a manager in a growing company that a lot of people really like traditional hierarchy, and for understandable reasons. I’ve learned to respect and work with that. It’s not my way, per se, but I get it.
morgante 11y ago
I'm not sure why this seems surprising at all. In fact, it seems like exactly the intended result: the company is getting rid of managers. That doesn't say anything about how employees are faring in the new model. This is like posting an article asking "why are so few people smoking in restaurants?" right after a no smoking rule was introduced in restaurants. Unfortunately, I do think they will run into some adverse selection issues. The best employees are also the ones who can easily find a new replacement job and collect a free 3-month exit bonus. Not to mention that many top performers probably rose into management and are facing the possibility of a pay cut.
repeek 11y ago
What is/was the goal with the shift to holacracy? Was Zappos stagnating? What efficiencies did they expect to realize?
InclinedPlane 11y ago
There's a fantasy in the corporate world, and Zappos is a perfect example of it. The fantasy is the idea of the "family" company, of the non-mercenary employee, of the company full of wholly intrinsically motivated people who just want to work together and make something great and that's the reason they get up in the morning and go to work. There's some truth to that at every company, but ultimately money and ownership matters. And it's delusional to think that employees do, or should, feel unbridled affection for their employers. The only way that ever makes any sense in big companies is when every employee is not only hugely empowered but also has a substantially stake in the company. Using "revolutionary" new forms of management like "flat" or "holocracy" or what-have-you aren't going to magically transform a company into something entirely different. At the end of the day there are people who can fire anyone and people who can't, there are people who live in mansions and drive luxury cars and people who don't. The only way to have an actual co-op is to, you guessed it, legally be a co-op. You can't just play make pretend.
- toyg 11y ago
  Oh, you can alright. Stock-options in startups, for example, are little more than pretend, considering the actual chances you'll see any money from them. In the end, to be honest, I'd rather have pretend-decision-sharing than pretend-ownership, i.e. businesses that are egalitarian on paper but not in reality. Europe is full of "service co-ops" where people are members in theory but simple employees in practice, orgs built just to game taxes or minimum-wage regulations. That's the worst.
saretired 11y ago
Can't judge whether holocracy has improved Zappos' financial results--and what else actually matters?--since Amazon doesn't break out Zappos separately. But I find it easy to believe that Zappos was ordered to reduce expenses; salaries are the easiest place to start cutting, but obviously if cut too much or recklessly results can suffer over time.
Animats 11y ago
Covered 9 days ago.[1] That time it was a NYT article. [1] https://news.ycombinator.com/item?id=10905091 https://news.ycombinator.com/item?id=10905091
jaysonelliot 11y ago
It seems like the reporter from The Atlantic came up with a hypothesis and set out to write an article to "prove" it. I don't see any reporting, as in speaking to current or former Zappos employees, learning what Holocracy is, or investigating its long-term effects. In other words, this is just an opinion piece. Extrapolating a general condemnation of an entire business system like Holocracy from a single data point is bad journalism, to say the least. Casually lumping all "flat" structures together and cherry-picking research to support a hypothesis (hierarchies work!) is lazy, and does the reader a disservice. I'd be very interested in some actual reporting to see how things are going at Zappos. It's possible that Holocracy is not turning out well. It's also possible that the turnover was exactly what they needed, and a positive new model of work is emerging. Unfortunately, this article didn't do any reporting, so it's unable to serve as anything more than a traffic-generating question mark.
melted 11y ago
Because the worst thing you can do for morale is move the cheese. People probably were building up their reputations, review histories, etc, angling for a promo which would net them more responsibility and money, and now Tony comes along and moves the fucking cheese. Moreover, moves it so well that no understands where it is anymore and how to get some. That, in a nutshell, is why people are leaving.
poof131 11y ago
Holocracy is a single manager’s delusion that everyone can report to him or her. As far as I can tell Zappos still has a CEO. I also think the divide people are commenting about between manager and creator is a red flag for a bad organization. If you are managing programers you should still be writing code a few layers up (same for other creators or operators). The “I’m a people person” argument doesn’t hold by itself. The Commanding Officers of the fighter squadrons I served in flew a lot and also managed 300-700 people. Certainly managers (or ‘leaders’) need to spend time on higher level issues and looking after the team, but they should still be able to operate / create enough to understand what is going on and lead people in the execution of the job. Sure, when the captain or admiral went flying it was more of a token gesture, but when you have a carrier and 5k people to look after or an entire battle group, well at that point keeping all the balls moving is challenging enough. But a small to mid size team—if you can’t operate why should operators follow you? While certain management skills are transferable, just because you lead a team of programmers doesn’t mean you can lead a team of SEALs or vice versa. Operational experience and ability to execute are important and an MBA isn’t a substitute. Presidents of sales are still involved in selling. Why is it on the technical side where people seem to either stop executing and manage or just be a ‘creator’. Like I said, now that I’m a programmer, this is a red flag for me. Although, to be fair so is the other extreme, the super coding leader with 40 people reporting to him and no time to talk to anyone. One-on-ones every other year! Leadership by negligence.
josscrowcroft 11y ago
"Flattening workplace hierarchies ... so-called “flat” workplaces ... flattening hierarchies runs the risk of ... flattening workplace hierarchy is not only ... Workers found hierarchical companies were more predictable ... hierarchical structures in the workplace ... Hierarchies work." Holacracy does not equal an absence of hierarchy or "flat" workplace.
bkirkby 11y ago
former Zappos engineering manager here. still with the company, just not a manager any more. this latest round of news stories all stem from the offer that was given in may being extended to a select group who were deemed critical to finishing the "supercloud" migration. that extension ended in january, so another "exodus" occurred as a new round of people took the offer. since the project was a tech project, this new round was almost 100% from tech. the ones who accepted this latest round were heavily tilted toward managers. mostly product or project managers with a healthy smattering of engineering managers. out of all the engineering managers (~15), there are only 2-3 of us left. we are the ones who took on active roles in writing software and making an impact by doing rather than commanding (https://medium.com/zappos-engineering/elastic-beanstalk-vs-apig-part-1-in-an-aws-showdown-92afc6273491 https://medium.com/zappos-engineering/elastic-beanstalk-vs-a...). fwiw, from my perspective, the story is far from over. i feel like it is only now that we can really progress the hard work of self-organization. the extended offer was holding us back. it's tough to move forward with distributed authority when you know that a good portion of your peers are not interested in that distributed authority. i guess the message i'm trying to get across now is that for those of us here and moving forward, it's far from a "finished" project. it's certainly not a "failed" experiment yet. it feels like it's just starting. and we are starting to see some of the benefits of people self-organizing. one example is that for the last couple of years we've tried to contribute to open source. i'm not entirely sure why we weren't able to do so except to point at bureaucracy and traditional management putting up roadblocks. if your manager doesn't see how you working on open source is going to help them out, then you have much less incentive to contribute to open source. in a self-organized system, with the directive being "figure out what the best use of your time is for the purpose of the company," when an individual senses that contributing to open source benefits the company, then they can do it. since the tearing down of the traditional management hierarchy, we've had an open source project released and are deep into releasing a second. it's hard to say this never would have been possible under the traditional hierarchy, but it is accurate to say that it didn't happen after two years of trying and then happened within months with self-organization.

71 points by pmcpinto 11y ago

zanewill9 11y ago

This was a fascinating (and daring) experiment. Sad it ended up like this.

static_noise 11y ago
It doesn't end here, though. A high turnaround was to be expected. The interesting part would be if things stabilize again.
TheGRS 11y ago
Zappos, in the article at least, seemed pretty fine with how it was going so far.

nyan4 11y ago

$2000? That's it? Not surprising that "Less than 2% of all prospective employees end up accepting the offer."

static_noise 11y ago
I was looking it up how many months with 2000$ that stipend would be. Turns out it would be a single payment. Also I don't know if there come any strings attached.
jknightco 11y ago
Keep in mind that Zappos is based in Las Vegas, and that the vast majority of their employees are support staff likely making under $30K a year. If $2K is almost as much as you make in a month you might consider taking the payout and finding a new job if you're not happy with the culture.
- overcast 11y ago
  I feel like people making only $30K a year, aren't the type of people to just jump ship because the "culture" has changed. They generally want to keep scraping by.
  - cthalupa 11y ago
    You're mixing up the buyout option that is a result of the switch to holocracy and the 2k option to quit you get when you first start.
- xenadu02 11y ago
  This is also important to remember; most customer service organizations exemplify micro-management, with a whole layer of people who make it their job to prevent the reps from helping customers by gaming useless metrics. Having a flat customer service organization (and valuing making customers happy) sounds like a great way to filter for reps who can think independently and find ways to make customers happy (and themselves more efficient).
morgante 11y ago
$2000 to quit a job you just started seems pretty good though. You should still have your job search apparatus ready and could hopefully get another company quite quickly. I'm actually surprised they don't see more people gaming the system, applying to get the bonus without any intention of working at Zappos.

perseusprime11 11y ago

This is what happens when your management goes down a rabbit hole called Teal organization instead of evolving over time.

codeonfire 11y ago

Probably all the managers are leaving. They can't do non-manager jobs emotionally or logically. Microsoft moved some managers to individual contributor roles a few years ago and people were openly crying about it. They wouldn't have power over people any more and can't deal with it because that's all they know/want. This is a great opportunity for Zappos to backfill with makers and doers and realize what they set out to accomplish.

TrevorJ 11y ago
Management is a role with some very domain specific skills, just like many other white collar jobs. If you've studied and trained to do a particular job and then get moved to something else, of course that's going to be difficult. It seems a bit odd that you ascribe that emotion to some personality flaw.
Spooky23 11y ago
More like they see the writing on the wall when a charismatic founder rolls out some strange philosophy.
mabbo 11y ago
I think you've got a very poor picture of what management is about- perhaps you've had a string of very bad ones. Power isn't the benefit of the role unless you're a sociopath or an asshole. Managing people is a complex problem that requires a specific set of skills which take time and practice to get right. I've known (and reported to) incredible managers who not only got us to achieve more than our team would have otherwise, but made us enjoy our jobs more in the process. I've also had managers who've lacked in that skillset, and had the exact opposite effect. And it was never because they were assholes or sociopaths- they just didn't have the skills they needed for the job. I may take on the management role someday, not because of some dream of lording over people and giving orders (that part actually turns me off) but because it's a new domain of complex problems.
- meric 11y ago
  I got promoted into a team lead once - I told my employer I wasn't ready, and he told me I was underestimating myself. I took advice and decided to give it a shot. I hired some great people to join the team. We finished the product in time for the deadline but everyone was spent, and people left, because I didn't have the management skills to know when people wanted a mentor so they can learn, when people weren't performing and should have been warned, when people needed a raise, etc. And so the team weren't happy because of those things. Long story short, the job was too hard, and we hired an experienced person to perform the role instead, and I get to go back to my old role. :)

deleted 11y ago

[deleted]

ebbv 11y ago

When the holocracy was first introduced early last year and it resulted in more employees than predicted immediately leaving, Hsieh apologists said "It's ok, Zappos will be stronger for it." But over the course of the year, people keep leaving, and people keep making excuses. I think we have enough proof that the flat management structure doesn't work as well as a traditional hierarchy for a company of Zappos' size and in its industry. But I guess some people won't believe it until the company actually goes down the toilet or backtracks.

codeonfire 11y ago
Is the company unable to function? Can I not go to zappos.com and buy something? Zappos just reduced their payroll expense by tens of millions of dollars probably due to deadweight attrition. So I think they will be doing much better.
- ebbv 11y ago
  As I said: > But I guess some people won't believe it until the company actually goes down the toilet or backtracks. You fall under that category. The criteria that Zappos website has to actually go down in order for it to have been a bad decision is a pretty bad way to make a judgment call. If you ran a company that way you'd never fix a bad decision until it was too late.
bkirkby 11y ago
note: i'm a former engineering manager at Zappos. (still with the company, just not a manager any more) you're making many mistakes in your opinion: 1. correlation and causation. this latest round of people leaving is only because there was an extension to the offer made in may for a group of people. far less left this last time than anticipated. 2. you aren't running the test long enough. because of this second offer, the hard work of self-organizing was largely being delayed. it actually feels like we are just beginning (at least in tech). 3. you are measuring the wrong thing. in no way does an attrition rate reflect the success of self-organization. any organization can be made better byt he right people leaving. the metrics i'm interested in are: 1) employee happiness, 2) customer delight, and 3) innovation rate. feel free to email me in a year to get an idea of what those are like then. (notice, a profitability metric is just an assumed by-product of those measurements, although it's not what we focus on).

bovermyer 11y ago

The more pressing question is, why does this keep popping up on the HN front page every couple days for the last week?

blantonl 11y ago

I think one important issue is how these managers, who's roles and titles were diminished with this holacracy approach, will sell themselves as managers in future roles outside of Zappos. These days no one really envisions working for the same company for 30 years. It will be tough for leaders within Zappos to show on paper their leadership progression. I think the idea of holacracy has legs, but I haven't seen any other implementation that would lend credence so far.

late2part 11y ago
I think a lot of companies like Google/Facebook/Crowdstrike/Uber will appreciate someone who was successful in an environment like Zappos' holocracy experiment.
- w1ntermute 11y ago
  That limits you to the tech industry, when many non-technical managers may look to go to other retail or apparel companies, which will be much more conservative.
- jessedhillon 11y ago
  How did Crowdstrike manage to be mentioned among the likes of those other three?
aNoob7000 11y ago
I personally think what Zappos is doing wouldn't work in a lot of businesses. Holacracy to me sounds like Agile or DevOps. Maybe one or two places are doing Agile/DevOps correctly and everybody else is just doing some kind of bastardize form of Waterfall, or as they call it at my place, "AgileFall".

codingdave 11y ago

People do not like change, in general. So when a company completely changes the way it operates, and at the same time offers a buyout to anyone who doesn't like the changes, I'd be asking the question the other way - what are they doing that they kept more than 80% of people in that scenario?

late2part 11y ago
It's worth noting that Hsieh's momentum is a bit hurt right now. His efforts to revitalize old Vegas don't seem to be working, and this 21st Century Motor experiment seems rough as well.

joshmn 11y ago

People leave managers before they leave companies.

leeny 11y ago

Anyone have visibility into which teams had the most attrition?

spilk 11y ago

In this no-managers/no-hierarchy model, how does one increase their salary?

jes5199 11y ago
Same way the rest of us do: by getting a job at a different company
sopooneo 11y ago
Here's an article attempting to answer that: http://www.businessinsider.com/how-zappos-determines-salaries-in-holacracy-2015-7 http://www.businessinsider.com/how-zappos-determines-salarie... But from my reading it sounds like the truth is at least partly: by fudging it.
sageikosa 11y ago
Reputation? Which, in itself, will lead to a new unaccountable hierarchy of mutual back-scratchers...
- TulliusCicero 11y ago
  This is exactly the problem with excessively 'flat' organizational structures that seek to do away with hierarchy. You can't get rid of social power, you can only change how it's distributed. Spreading it out more equitably among all employees sounds good until you realize that it makes decision making even more opaque: when everyone is responsible, nobody is.
hueving 11y ago
there is still a hierarchy of important people that will always emerge. It's just much harder to see now. Once you impress these important people, you can have a raise.
- SideburnsOfDoom 11y ago
  > there is still a hierarchy of important people that will always emerge. It's just much harder to see now. Indeed; and in fact it is now obligatory to mention the excellent Essay of ancient wisdom on the subject: The Tyranny of Structurelessness http://www.jofreeman.com/joreen/tyranny.htm http://www.jofreeman.com/joreen/tyranny.htm

pcote 11y ago

I don't blame these people for leaving. Self-governance is hard. Most kids are taught to obey their authority-figure teachers. They eventually grow up to obey their authority-figure bosses. So when a company like Zappos goes flat like this, it flies in the face of over two decades of training for managers and subordinates alike. That being said, the new setup is great for people who are used to that level of independence. Were you a freelancer? In an early stage startup? Came from schooling where you were in charge of your education? If that's you, the new Zappos is a natural fit. It also puts you in a tiny (lucky) minority of the potential candidates who are.

oh_sigh 11y ago
Pretending that Zappos has self governance is laughable. All they have is governance that lacks transparency
draw_down 11y ago
It is slightly shocking to me the amount of people here willing to take this organizational change at face value. Maybe it's exactly as theorized, but maybe you just don't know the failure modes yet.

marknutter 11y ago

I assume this keeps popping up on Hacker News because of schadenfreude, but I'm going to say something controversial (and from a completely uninformed viewpoint), and that's "good riddance". Of all the managers I've ever had, maybe 1 or 2 of them have been any good at it. And by good at it, I mean they made me better at my job. All the other managers I've ever dealt with succeeded primarily in making my job harder to do. Good managers are glorified butlers. Their job is to do everything and anything they can to accommodate those whom they manage, and recognize that because they aren't actually creating anything, they defer to those who can and do whatever they can to help them do it. If they came from a creator position, then their main challenge is to not forget what it was like to be a creator and advocate for them as though they still are. One of the major problems with the whole concept of managers is that they are typically higher than the creators in the corporate hierarchy, and often get corrupted by that. They are proud to be managers because it's a promotion in most organizations, but they have to deal with the uncomfortable fact that they no longer actually make anything (or never did to begin with). Thus, they try to find other ways to make themselves feel valuable, and that often involves inventing extra work for the creators to do. If I ran a company, managers would be butlers. Their compensation would be directly tied to the level of happiness of the creators they are serving. I might even let the creators they serve set their salaries. I currently have a manager whose salary I would set higher than my own because he completely embodies this type of management style. If anybody on the team needs anything, he does it with a smile. He is our advocate, our cheerleader, our mediator, our friend, and our faithful servant. It's not a coincidence he's gotten employee of the year (based on embodying corporate values) two years in a row. I really appreciate what Zappos is doing here and I sincerely hope it works out. The worst thing that could happen is they lose their resolve and give up on it. That would be a very unfortunate signal to the rest of corporate America that the status quo is working just fine, and it would make me very sad indeed.

andygcook 11y ago
What you're describing is akin to servant leadership - https://en.m.wikipedia.org/wiki/Servant_leadership https://en.m.wikipedia.org/wiki/Servant_leadership
- 11y ago

mwsherman 11y ago

Others have said this well but I’ll emphasize that the article doesn’t present the case that it’s failed or failing – there is a ways to go to find that out. If their service starts to suffer, then we have a signal, perhaps. This may turn out selecting for the right people. I’ve learned as a manager in a growing company that a lot of people really like traditional hierarchy, and for understandable reasons. I’ve learned to respect and work with that. It’s not my way, per se, but I get it.

morgante 11y ago

I'm not sure why this seems surprising at all. In fact, it seems like exactly the intended result: the company is getting rid of managers. That doesn't say anything about how employees are faring in the new model. This is like posting an article asking "why are so few people smoking in restaurants?" right after a no smoking rule was introduced in restaurants. Unfortunately, I do think they will run into some adverse selection issues. The best employees are also the ones who can easily find a new replacement job and collect a free 3-month exit bonus. Not to mention that many top performers probably rose into management and are facing the possibility of a pay cut.

repeek 11y ago

What is/was the goal with the shift to holacracy? Was Zappos stagnating? What efficiencies did they expect to realize?

InclinedPlane 11y ago

There's a fantasy in the corporate world, and Zappos is a perfect example of it. The fantasy is the idea of the "family" company, of the non-mercenary employee, of the company full of wholly intrinsically motivated people who just want to work together and make something great and that's the reason they get up in the morning and go to work. There's some truth to that at every company, but ultimately money and ownership matters. And it's delusional to think that employees do, or should, feel unbridled affection for their employers. The only way that ever makes any sense in big companies is when every employee is not only hugely empowered but also has a substantially stake in the company. Using "revolutionary" new forms of management like "flat" or "holocracy" or what-have-you aren't going to magically transform a company into something entirely different. At the end of the day there are people who can fire anyone and people who can't, there are people who live in mansions and drive luxury cars and people who don't. The only way to have an actual co-op is to, you guessed it, legally be a co-op. You can't just play make pretend.

toyg 11y ago
Oh, you can alright. Stock-options in startups, for example, are little more than pretend, considering the actual chances you'll see any money from them. In the end, to be honest, I'd rather have pretend-decision-sharing than pretend-ownership, i.e. businesses that are egalitarian on paper but not in reality. Europe is full of "service co-ops" where people are members in theory but simple employees in practice, orgs built just to game taxes or minimum-wage regulations. That's the worst.

saretired 11y ago

Can't judge whether holocracy has improved Zappos' financial results--and what else actually matters?--since Amazon doesn't break out Zappos separately. But I find it easy to believe that Zappos was ordered to reduce expenses; salaries are the easiest place to start cutting, but obviously if cut too much or recklessly results can suffer over time.

Animats 11y ago

Covered 9 days ago.[1] That time it was a NYT article. [1] https://news.ycombinator.com/item?id=10905091 https://news.ycombinator.com/item?id=10905091

jaysonelliot 11y ago

It seems like the reporter from The Atlantic came up with a hypothesis and set out to write an article to "prove" it. I don't see any reporting, as in speaking to current or former Zappos employees, learning what Holocracy is, or investigating its long-term effects. In other words, this is just an opinion piece. Extrapolating a general condemnation of an entire business system like Holocracy from a single data point is bad journalism, to say the least. Casually lumping all "flat" structures together and cherry-picking research to support a hypothesis (hierarchies work!) is lazy, and does the reader a disservice. I'd be very interested in some actual reporting to see how things are going at Zappos. It's possible that Holocracy is not turning out well. It's also possible that the turnover was exactly what they needed, and a positive new model of work is emerging. Unfortunately, this article didn't do any reporting, so it's unable to serve as anything more than a traffic-generating question mark.

melted 11y ago

Because the worst thing you can do for morale is move the cheese. People probably were building up their reputations, review histories, etc, angling for a promo which would net them more responsibility and money, and now Tony comes along and moves the fucking cheese. Moreover, moves it so well that no understands where it is anymore and how to get some. That, in a nutshell, is why people are leaving.

poof131 11y ago

Holocracy is a single manager’s delusion that everyone can report to him or her. As far as I can tell Zappos still has a CEO. I also think the divide people are commenting about between manager and creator is a red flag for a bad organization. If you are managing programers you should still be writing code a few layers up (same for other creators or operators). The “I’m a people person” argument doesn’t hold by itself. The Commanding Officers of the fighter squadrons I served in flew a lot and also managed 300-700 people. Certainly managers (or ‘leaders’) need to spend time on higher level issues and looking after the team, but they should still be able to operate / create enough to understand what is going on and lead people in the execution of the job. Sure, when the captain or admiral went flying it was more of a token gesture, but when you have a carrier and 5k people to look after or an entire battle group, well at that point keeping all the balls moving is challenging enough. But a small to mid size team—if you can’t operate why should operators follow you? While certain management skills are transferable, just because you lead a team of programmers doesn’t mean you can lead a team of SEALs or vice versa. Operational experience and ability to execute are important and an MBA isn’t a substitute. Presidents of sales are still involved in selling. Why is it on the technical side where people seem to either stop executing and manage or just be a ‘creator’. Like I said, now that I’m a programmer, this is a red flag for me. Although, to be fair so is the other extreme, the super coding leader with 40 people reporting to him and no time to talk to anyone. One-on-ones every other year! Leadership by negligence.

josscrowcroft 11y ago

"Flattening workplace hierarchies ... so-called “flat” workplaces ... flattening hierarchies runs the risk of ... flattening workplace hierarchy is not only ... Workers found hierarchical companies were more predictable ... hierarchical structures in the workplace ... Hierarchies work." Holacracy does not equal an absence of hierarchy or "flat" workplace.

bkirkby 11y ago

former Zappos engineering manager here. still with the company, just not a manager any more. this latest round of news stories all stem from the offer that was given in may being extended to a select group who were deemed critical to finishing the "supercloud" migration. that extension ended in january, so another "exodus" occurred as a new round of people took the offer. since the project was a tech project, this new round was almost 100% from tech. the ones who accepted this latest round were heavily tilted toward managers. mostly product or project managers with a healthy smattering of engineering managers. out of all the engineering managers (~15), there are only 2-3 of us left. we are the ones who took on active roles in writing software and making an impact by doing rather than commanding (https://medium.com/zappos-engineering/elastic-beanstalk-vs-apig-part-1-in-an-aws-showdown-92afc6273491 https://medium.com/zappos-engineering/elastic-beanstalk-vs-a...). fwiw, from my perspective, the story is far from over. i feel like it is only now that we can really progress the hard work of self-organization. the extended offer was holding us back. it's tough to move forward with distributed authority when you know that a good portion of your peers are not interested in that distributed authority. i guess the message i'm trying to get across now is that for those of us here and moving forward, it's far from a "finished" project. it's certainly not a "failed" experiment yet. it feels like it's just starting. and we are starting to see some of the benefits of people self-organizing. one example is that for the last couple of years we've tried to contribute to open source. i'm not entirely sure why we weren't able to do so except to point at bureaucracy and traditional management putting up roadblocks. if your manager doesn't see how you working on open source is going to help them out, then you have much less incentive to contribute to open source. in a self-organized system, with the directive being "figure out what the best use of your time is for the purpose of the company," when an individual senses that contributing to open source benefits the company, then they can do it. since the tearing down of the traditional management hierarchy, we've had an open source project released and are deep into releasing a second. it's hard to say this never would have been possible under the traditional hierarchy, but it is accurate to say that it didn't happen after two years of trying and then happened within months with self-organization.