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Zappos CEO Tony Hsieh: Adopt Holacracy Or Leave
- jcrites 12y agoAn summary of the article and the concept that Tony Hsieh wrote: "We’ve been operating partially under Holacracy and partially under the legacy management hierarchy in parallel for over a year now. Having one foot in one world while having the other foot in the other world has slowed down our transformation towards self-management and self-organization. [W]e haven't made fast enough progress towards self-management, self-organization, and more efficient structures to run our business. "After many conversations and a lot of feedback about where we are versus our desired state of self-organization, self-management, increased autonomy, and increased efficiency, we are going to take a "rip the bandaid" approach to accelerate progress towards becoming a [self-managing] organization. As of 4/30/15, in order to eliminate the legacy management hierarchy, there will be effectively be no more people managers." He goes onto to describe more about how this will work. What does Holacracy entail? "Holacracy is a social technology or 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", according to Wikipedia.
- mauricemir 12y agoSo informal high school cliques vs a Hierarchy - I can guess what the average outcome will be.
- dandare 12y agoThis is my main concern. I have never studied the concept in detail but I don't see how self-organisation addresses any problem.
- mauricemir 12y agowell i have worked at a worker coop we (collectively) did have over all control but there where still managers.
- ultimape 12y agoSelf organization, when mirroring a biological system (such as our immune system) can be co-opted by cancers and auto-immune causing pathogens. No system is perfect.
- golemotron 12y ago> "Holacracy is a social technology or 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", according to Wikipedia. Yet there he is at the top of the hierarchy telling people to do it.
- gadders 12y agoWhat if the holocracy decides they like hierarchies?
- ph0rque 12y agoBrian: Please, please, please listen! I've got one or two things to say. The Crowd: Tell us! Tell us both of them! Brian: Look, you've got it all wrong! You don't NEED to follow ME, You don't NEED to follow ANYBODY! You've got to think for your selves! You're ALL individuals! The Crowd: Yes! We're all individuals! Brian: You're all different! The Crowd: Yes, we ARE all different! Man in crowd: I'm not... The Crowd: Shhhhh!
- rkuykendall-com 12y agohttps://www.youtube.com/watch?v=Zjz16xjeBAA https://www.youtube.com/watch?v=Zjz16xjeBAA Quote starts at 1:20. One of the funniest movies I've ever seen.
- kbenson 12y agoI admit I was thinking while reading the email that it would be rather funny if their ad hoc emergent groups elected managers to manage them, and replicated a hierarchical structure.
- rickcusick 12y agoRight? My irony detection meter pegged when I read this article/email. Beautiful needs, tragic strategy.
- athrun 12y ago
- peteretep 12y ago> there will be effectively be no more people managers I hope they've got some shit-hot HR and legal
- ExpiredLink 12y agoThe opposite of formal management and hierarchy isn't "self-management" and "self-organization" but informal power structures and hierarchies. Ultimately, less security and more social pressure and control for the individual. Brave new world of work.
- mauricemir 12y agoYes non conformists do not do well in these sort of organizations
- 21echoes 12y agogood thing Holacracy is everything except "informal", then.. literally the core idea is that you take the implicit jobs of management and make them explicit & open, and allow them to be claimed by more than just one individual.
- angelbob 12y agoIt's an interesting idea. It has many standard pitfalls, as a 1970s paper, "The Tyranny of Structurelessness" points out: http://www.jofreeman.com/joreen/tyranny.htm http://www.jofreeman.com/joreen/tyranny.htm Basically, informal systems are, by their nature, harder to regulate. And "unregulated" is not the same as "works well and fairly."
- jcrites 12y agoSimilar ideas are expressed in Valve's Corporate Handbook, which describes a company culture where there is no hierarchy, either: https://www.valvesoftware.com/company/Valve_Handbook_LowRes.pdf https://www.valvesoftware.com/company/Valve_Handbook_LowRes....
- bozoclownn 12y agoThere is always a hierarchy. Either it is explicit or it is implicit (which does not mean I'm pro explicit hierarchies)
- iamwithnail 12y agoI think that's kind of right - it's the explicit awareness of hierarchy or other structures that works. (I'd argue that actually you can have hierarchy-less (sp?) organisations, but they require particular consideration - but you'll still overlay other assemblages - social hierarchies or whatever, on top of it. I did a bit responding to the Tony Hsieh email from our perspective as a company that's trying to implement Holarchy right now: http://blog.granttree.co.uk/post/117079306181/zappos-two-point-no http://blog.granttree.co.uk/post/117079306181/zappos-two-poi...
- TheOtherHobbes 12y ago"Interestingly, none of the organizations I have researched for the book Reinventing Organizations are employee-owned; the question of employee ownership doesn’t seem to matter very much when power is truly distributed." Excuse me while I raise a questioning eyebrow.
- scott_s 12y agoThat's the stance taken in a famous feminist essay from 1970, "The Tyranny of Structurelessness": http://www.jofreeman.com/joreen/tyranny.htm http://www.jofreeman.com/joreen/tyranny.htm HN discussion: https://news.ycombinator.com/item?id=7409611 https://news.ycombinator.com/item?id=7409611
- a3n 12y agoYeah, and the problem with implicit hierarchies is that people are always wondering who has the power today. It's like the Roman Senate.
- mg1982 12y agoManagement theory is like cottage cheese - they keep finding surprising new ways to make me hate it.
- Rainymood 12y agoYet, it's surprisingly high in protein, and it makes me fart.
- gobacktoreddit 12y agoGo back to reddit.
- kzhahou 12y agokzhahou
- dk1138 12y agoThis is a push to up-end the company culture, which is its own steep challenge. Kudos it they can do it. Management has a role. Business politics is a real thing. Power struggles are not stymied by an egalitarian approach. Any company will have decision makers at all levels of influence and control. In some situations, managers are those with time and wisdom to be able to sort out what is a regular ask and what is going to be an uphill challenge. One of my favorite quotes from one of my managers was "I'll finish the fights you start." My autonomy in that role came from reinforcement from a wiser, steadied hand. I believe good people managers have a distinct place in employee growth. Good people managers create employee groups that generate self-organizational habits, self-manage based on goals, and have increased efficiency. Poor people managers get in the way of this. Good people managers know when to step in to advocate for business importance where inexperienced employees may be able to generate good work product, but not be good advocates (yet!) They also understand longer term missions that may have been disclosed to them, so that they can prioritize correctly. This prioritization is vital. I don't think the people lead themselves to the verdict that their work/problem is low on the totem pole. Quite the opposite, people own the role they are in and advocate as best they can. Self-organization and self-management require a distinct understanding of the business and where one's work lies in the scheme of things. Without management acting as a buffer, this could create a lot of noise.
- bshimmin 12y agoI wonder what proportion of Zappos' 1500+ employees actually spent 30 minutes reading that email.
- Rainymood 12y agoImagine this line 80% in "Good job that you've made it this far reading the memo. Please send me back an e-mail with your name + banana in the title, and attach an image of a banana or else you're fired. Thank you!" I wonder how much staff they would have to fire ...
- jkot 12y agoI would not respond even if I read that email. Such company would be broken, and this seems like good way out.
- JanezStupar 12y agoWhich would be exactly what he wanted.
- strictnein 12y agoHe'd want the worthwhile employees to leave?
- JanezStupar 12y agoIt is completely possible to be worthwhile, incompatible and not welcome at the same time. I am not passing judgement.
- oblio 12y agoAnd it wouldn't work because 1% of the employees would read the whole email and then tell all their friends to send an email with a banana image attached. On a parallel note, say hello to games in the age of internet.
- deleted 12y ago[deleted]
- InclinedPlane 12y agoA counterpoint to "holacracy", "The Tyranny of Structurelessness" by Joreen: http://www.jofreeman.com/joreen/tyranny.htm http://www.jofreeman.com/joreen/tyranny.htm
- ccheever 12y agoone of the points he makes in the memo is that holocracy doesn't mean that there is no structure. it's just a different structure than the traditional hierarchy.
- pacala 12y agoAre you sure it's a counterpoint? The concluding "Principles of democratic structuring" are very much a recipe for implementing structurelessness effectively. The final words: > When these principles are applied, they insure that whatever structures are developed by different movement groups will be controlled by and responsible to the group. The group of people in positions of authority will be diffuse, flexible, open, and temporary. They will not be in such an easy position to institutionalize their power because ultimate decisions will be made by the group at large. The group will have the power to determine who shall exercise authority within it.
- anonymousDan 12y agoThe really interesting part of this article for me is that they are adopting such an approach even though they are a public company. The previous adopters that I'd heard of were all private, and I never could quite figure out how they intended to handle the compliance requirements that come with being a public company (e.g. to prevent insider trading).
- PhasmaFelis 12y agoI have only skimmed the memo, so I may be missing something, but calling this an "ultimatum" and saying things like "adopt holacracy or leave" seems awfully overdramatic. If a CEO says "Hey, we're rearranging the org chart now," and you can't can't bear the thought of working under the new org chart, then unless you're in a position to talk him out of it, your only real option is to quit. Nobody has to mention the option explicitly; it's understood. That's not an "ultimatum," it's what being an employee means. This guy is explicitly bringing it up because he's offering extra benefits to anyone who chooses to quit. He's being more accommodating than the average CEO, not less.
- mannykannot 12y agoIt may not technically be an ultimatum, but it quacks like one.
- escape_goat 12y agoI am sorry that I cannot leave a comment of greater value, but this makes me wonder if Zappos needs to reduce the number of employees they have, and if this is a good way to essentially perform a stealth layoff by getting rid of those least willing to be true believers. I have no reason based in fact to believe that this would be the case; this is just speculation based on my previous impression of Tony Hsieh with respect to his controversial impact on downtown Austin. He seems to be rather invested in being a visionary (if not messianic) figure.
- lnanek2 12y agoIt does flat out say anyone who doesn't like it will be given an offer. I assume that refers to the offer you get when you first join where they pay you to quit. So the letter does flat out say, join the holocracy, no more management, if you don't like it, we have a retirement offer for you.
- PhasmaFelis 12y agoSure, but explicitly saying "if you don't like it, have a retirement offer" seems a lot more pleasant than the implicit "if you don't like it, don't let the door hit you in the ass on the way out" that comes with basically any major corporate communication. Those are always your two choices when changes come down from on high. All this guy's doing is making option #2 explicit.
- boothead 12y agoThis is the most important part for me: And precisely for that reason, lots of natural, evolving, overlapping hierarchies can emerge ―hierarchies of development, skill, talent, expertise, and recognition
- TheSpiceIsLife 12y agoI'm a bit pressed for time right now but wanted to leave a like to Ken Wilber[1] who did a lot to popularise the term holarchy. If you haven't heard of him or read any of his books ya'll might find him interesting. 1. http://en.wikipedia.org/wiki/Ken_Wilber http://en.wikipedia.org/wiki/Ken_Wilber
- mgkimsal 12y ago" Self-Management is not a startling new invention by any means. It is the way life has operated in the world for billions of years, bringing forth creatures and ecosystems so magnificent and complex we can hardly comprehend them. Self-organization is the life force of the world, thriving on the edge of chaos with just enough order to funnel its energy, but not so much as to slow down adaptation and learning." I think he's referring to evolution here, but it has no end goal in mind. It just happens, and just as often as organisms adapt over time, many simply die off.
- pesenti 12y agoSo does that apply to the CEO as well? Is he going to drop his title?
- TheOtherHobbes 12y agoPerhaps he'll become the CHO - Chief Holacracy Officer.
- maxwell 12y agoHolacracy® replaces single, static titles and departments with multiple, dynamic roles and circles. He's probably the "Lead Link" of the "General Company Circle", e.g. https://glassfrog.holacracy.org/circles/25 https://glassfrog.holacracy.org/circles/25
- talmand 12y agoSo his static job title changes from "Chief Executive Officer" to "Lead Link of General Company Circle"? Can someone else step up and replace him as Lead Link? If not, doesn't seem very dynamic.
- _delirium 12y agoSounds a little bit like the theory behind some communist parties' organization. Instead of a strict hierarchy, with leadership titles like Chairman or President and such, there are functional working groups or committees ("circles") with possibly intersecting membership. Then people have functional roles in those committees. The idea being that you aren't at a certain "rank" in the organization, but rather you are doing something specific in a specific sub-group of it. It does have the problem you mention, that the leadership in practice will often end up not very dynamic. There's no leader, but the "lead link" of some particularly important "circle" will de facto be the leader of the organization, even if their official title is only something like Secretary.
- talmand 12y ago"All animals are equal, but some animals are more equal than others."
- coldpie 12y agoI've only worked for small companies. My current company has roughly 30 employees. My eyes glazed over during the 2nd paragraph. Is this what it's like when you have a lot of employees to manage? Sending Half-Hour Emails with Capitalized Words I've never heard of? Holacracy? Glass Frog? Teal Organization? Reinventing Organizations? Huh? Just let me do my work, damn.
- smackfu 12y agoIn a typical management structure, sending out org-wide emails is often a sign of bad management, since management is not trusting their lower tiers of management to get their message out and is essentially acting like the voice of god. In a holocracy, who knows.
- a3n 12y agoI imagine these emails are going to have to come almost exclusively from Hsieh, as one of the few remaining formal managers.
- ebbv 12y agoTop level executives get bored and feel ineffective and look for things to do. CEOs especially can fall victim to wanting to be "bold" and being obsessed with whatever their idea of being a leader is at the time. They read articles and books which are written for them full of buzzwords and pseudo-science, and use these to justify taking action which they believe firmly will make a big difference, but really amounts to rearranging furniture. Just read the linked email. It's non-stop buzzwords and references to "the book". This is the talk of a cult member not someone acting rationally. If you didn't know this was a CEO of a successful corporation, and instead you were told it was an internal Scientology memo, would you doubt it? Self Management may or may not be a good way to run a company (it probably largely depends on the company), but there should be rational, compelling reasons for why it's the way to go. The articles included in the email are just Malcolm Gladwell style pseudoscience meant to lull top level executives into a hypnotic state of euphoria.
- tomjen3 12y agoProbably all it means is that some new management fad has come and replaced whatever was the previous fad (six sigma? Lean organizations?). If you want to a lot of dough, read the books and memorize a few buzzwords, buy a suit and name yourself a consultant. I doubt anything will actually change below a superficial level, but everybody wants to seem important and the way management does that is by making sweeping changes (we engineers aren't any different, we just want to build impressive and geeking things).
- JonFish85 12y agoWell this reeks of consultant.
- smoyer 12y ago"Holacracy is a social technology or 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.[1] Holacracy has been adopted in for-profit and non-profit organizations in the U.S., France, Germany, New Zealand, Australia, and the UK." - https://en.wikipedia.org/wiki/Holacracy https://en.wikipedia.org/wiki/Holacracy
- engineerDave 12y agoLOL using the root of the word you're looking up to define the word you're looking up, classic!
- smoyer 12y agoWikipedia's "top notes" says "This article has multiple issues".
- slowernet 12y agoBased on the "adapt or get out" tone and unironic use of jargon like "Teal Organization", I picture their emergent culture landing somewhere between Lord of the Flies and Scientology.
- vanadium 12y agoSounds like a case for some "Tension Processing."
- a3n 12y agoI don't even know what that is, and I already know what it is. Been working too long I guess.
- gknoy 12y agoReading the Holacracy page on "processing tensions" [0] feels like document written by Dogbert. Poe's law resonates so strongly here that had I not known that this was for real (since there's a book, and Zappo's is doing it), I would have thought it was satirical. I feel like I need to read it three times, and still it feels like mumbo-jumbo. 0: http://holacracy.org/blog/processing-tensions http://holacracy.org/blog/processing-tensions
- harrumph 12y ago>I don't even know what that is, and I already know what it is. To paraphrase Shakespeare, pseudoscience by any other name would smell as familiar.
- nazbot 12y agoI thought you were being facetious.
- briandherbert 12y agoWithout more context than the title and the linked email, it's pretty easy to call Hsieh's move brash or tried-and-futile. But the guy is often regarded as the premier management CEO of his generation, and homogenous culture is strongly enforced in his hiring process. Employees love Hsieh because they're (largely) on the same page, not bc of a reality distortion field. After seeing Hsieh's track record and reading "Delivering Happiness" (Zappos' story) and "The Everything Store" (Parent Amazon's story where Zappos gets a vignette), I'd rather watch and learn than shoot it down based on my engineering sensibilities.
- geofft 12y agoIt's not about engineering sensibilities, it's about human sensibilities. So many great leaders in human history have been effective, loved by their followers, good at enforcing a homogeneous culture, and abusive. http://recode.net/2014/10/01/the-downtown-project-suicides-can-the-pursuit-of-happiness-kill-you/ http://recode.net/2014/10/01/the-downtown-project-suicides-c...
- rflrob 12y agoI am impressed that the effort to enforce a corporate monoculture (if we want to be uncharitable to Hsieh) has such a humane escape clause—3+ months severance and COBRA is nothing to sneeze at. I would be curious to see if there's any kind of option for bailing later, as a sort of "I've tried it, and now I know it's not for me" option.
- saosebastiao 12y ago> But the guy is often regarded as the premier management CEO of his generation Erm...what? By whom? I only know of the incompetent Tony Hsieh that burned through cash at such a rate that his investors thought it a miracle that Zappos was still around when several large companies started looking to get into the online apparel business at the same time. It is widely rumored within Amazon that Zappos was a few weeks from bankruptcy when they were bought by Amazon, and it is pretty well known within Amazon today that they still aren't profitable. A match made in heaven? Even if you don't see the same negative picture that I do, by every "track record" objective measure you can think of, he is two orders of magnitude worse of a CEO than Zuckerberg and Larry Page, and still not even in the same league as Elon Musk, or if you want to stick to apparel, Kevin Plank. It is one thing to take puff pieces seriously, and another thing altogether to take autobiographical puff pieces seriously. > Employees love Hsieh because they're (largely) on the same page, not bc of a reality distortion field. His associate-level employees love him because they have a pretty good job that they couldn't get elsewhere. His managers hate him because they view him as incompetent and irresponsible. Everyone I know that works in or with Zappos sees this as a clear power play. He's trying to cut them out of the picture.
- talmand 12y agoIt'll be like the first season of Survivor, the one that figures out the unforeseen strategies and rules of the new game first will win.
- mfringel 12y agoWhile my eyebrows are raised past the top of my hairline right now, kudos to him for giving it a shot at a large scale. Whatever the outcome, it's going to be a very interesting case study.
- a3n 12y agoI'm glad I'm not a subject of the experiment.
- cafard 12y agoIn an essay collected in The Hall of Uselessness, Simon Leys quotes a Chinese writer's parable from the first half of the 20th Century, about a government afraid of its people that create a massive volume of laws. It had a blank first page, however, which only the initiated knew how to read. The first three entries were "1. Some cases must be treated with special severity. 2. Some cases must be treated with special lenity. 3. This does not apply in all cases." (Quoted from memory.) What does it say on the blank first page of the Zappos employee manual?
- fsk 12y ago>What does it say on the blank first page of the Zappos employee manual? All employees are equal, but some are more equal than others.
- maxxxxx 12y agoHow do salary raises get decided under this system? To me it looks like he wants to have top management, a few superstars, and the rest of the company are totally interchangeable. Does your salary get reduced when you change roles?
- angrow 12y agoHolacracy is not a system for determining salary, or any specific tactical question, in the same way that "Agile" isn't a system for determining what programming language to use. Holacracy just says how an organization can decide how to apportion responsibility and authority. Different organizations reach compensation decisions in a wide variety of ways, no matter their meta-organizational framework. Commonly, salaries are decided in a way very similar to the process at a "normal" company. > To me it looks like he wants to have top management, a few superstars, and the rest of the company are totally interchangeable. As I said, not much different.
- maxxxxx 12y ago"These are hierarchies of influence, not position, and they’re built from the bottom up. At Morning Star one accumulates authority by demonstrating expertise, helping peers, and adding value. Stop doing those things, and your influence wanes—as will your pay." Form the company's perspective this is probably a good thing but I think it results in a hyper-competitive situation for the regular employee.
- ryanobjc 12y agoWhen I saw a missive which is commanded to take 30 minutes to read... my immediate thought is, ok they're doomed. Every book on business management and communications repeats the "keep it simple and clear" over and over. Considering the words of the CEO are repeated by dozens if not hundreds of people, you don't want the message to shift. I read the article about holocracy, and frankly anything that is described as "difficult" and "painful to transition" and "takes years" just seems like it better delivers huge benefits. And from the origin stories of holocracy, I have my suspects of why. In the end, management is all about human dynamics. All the advantages and disadvantages of being human. You have to lean in to the advantages and minimize the disadvantages. I would probably be net negative on holocracy for my own consideration however.
- jonsterling 12y agoWow, this sounds like an incredibly unhealthy way to work. I look forward to seeing the inevitable, expensive failure & blowback.
- 6d0debc071 12y agoIt might help this email made it easy to visualise quite how the teams are supposed to approach a problem under this new paradigm. As it is, I've read the thing and I have no idea how it's meant to work. It might be a great idea, it might be a terrible one... either way, it's got a lot of buzz words, which is rarely a good sign. Uncharitably lots of it sounds like giving up on managing - we'll set the strategy and the rest will somehow work itself out.
- MetaCosm 12y agoIt seems like using "glassfrog" or something equiv is required. Makes more sense when you look at a "glassfrog" example: https://glassfrog.holacracy.org/organizations/5 https://glassfrog.holacracy.org/organizations/5
- kbenson 12y agoWhenever I read something that starts a sentence with "Leading scientists believe...", I immediately question my choices that led me to that point, and whether I want to continue reading, which I usually don't. I'm not sure I've ever read those words outside a critique and found the document they were in worthwhile.
- pg_is_a_butt 12y agotime to short zappos
- timdellinger 12y agoI applaud his boldness! I think that this will be a test of the strength of Zappos's culture as a driver of human behavior, and a test of how well they've been able to hire and retain only those people who fit in with and drive that culture. To quote Larry Niven, "Anarchy is the least stable of social structures. It falls apart at a touch."
- JoergR 12y agoMaybe people would be more open to it if the memo didn't sound like L. Ron Hubbard wrote it...
- 9999 12y agoSo all manager positions have been eliminated. People that were formerly managers have the option of staying on in some nebulous capacity. For those former managers that do not want to work at a company in a nebulous capacity, they are offering a severance package. This severance package seems more like a legal maneuver to force resignations to avoid having hundreds of former managers suddenly file unemployment claims, wrongful termination suits, etc. against Zappos. I find the language of the memo and the motivations behind it execrable. I do not believe there is anything inherently wrong with flat organizational structures and there's perhaps even some justification for using novel terminology to describe them. Valve's employee handbook is a great example of a flat org description done right. Eventually maybe Zappos will end up with a similar document. It's maybe a little harsh to judge them based on a rambling, incoherent, and cultish internal memo, but I know that I'm not inclined to work for Lead Link Grand Wizard Hsieh if this is the way he communicates.
- dang 12y agoThe concentration of middlebrow dismissal in this thread is appalling, and not at all in the spirit of intellectual curiosity. Fortunately there are at least a few comments that didn't act like know-it-alls, and they did get upvoted.