The Point: What would your organization be like if your employees lead themselves? Would it be better, or would it be worse? Tony Hsieh of Zappos after hearing Brian Robertson (a software company CEO and therefore people expert) bet that his organization would be better… Considerably better! In the short term, Holacracy at Zappos appears to be a recipe for chaos, calamity, and turnover in its ranks (In other words, the opposite of success). So the question remains “Will the success-ship be righted at Zappos in the long-term?” In this post we’ll take a look at the leadership challenge of Holacracy along with 5 tips… Enjoy!
Zappos Holacracy
The Zappos Culture can be described as an obsessive focus on creating a culture that embraces the idiosyncrasies of each individual should leave few wondering why they’re continually a stalwart on Fortune’s annual list of the “100 Best Companies to Work For.” However, many are now wondering how to implement their human resources ranking system simply known as “Holacracy” (a system that has replaced hierarchies and bosses with “self-management” of organizational teams and individuals therein).
While securing “100 Best” attainment would be viewed as “Great” or even “Good” for most organizations, Zappos is looking to identify how they’ve slid from 48 to 58 (Digging deep into the results yields two particular questions showing dismal results: Do employees think management has “a clear view of where the organization is going and how to get there”? And do managers “avoid playing favorites”?) Seems like a small problem (“Who cares?” or “Pigs get fat, hogs get slaughtered” should come to mind!)
Teal replaces Orange (Which replaced black, right?)
Zappos can, and should be looked at as an enterprise that embraces risk-taking. Having taken the “tour” last year (You can too if you plan a visit: https://www.zapposinsights.com/tours), I can honestly say that the place is ripe with transformation. Memories of stuffed animals, ball pits, and individualization were everywhere… Think of it as if Willy Wonka transitioned from making candy to selling shoes!
5 Tips to Holacracy Success?
After viewing the Holacracy in play at Zappos, I offer the following 5 Tips to Holacracy Success:
Tip #5 – Embrace Change
While huddling up and having meetings is nice, identifying where change is at (Along with Where it came from? What you are doing about it? Where you want to go?) is crucial to short/long-term success. While you can’t guarantee successful outcomes to each/every change episode, properly diagnosing and setting a course of action can guarantee shorter episodes of change failure.
Tip #4 – Someone Must Lead
While it’s a nice idea to have zero leaders in an organization (as well as establishing high expectations), expecting peers to hold each other accountable can/will lead to moments from “The Lord of the Flies” to be played-out. If leaders do what others won’t, someone must step-up and lead.
Tip #3 – Recognize Shortcomings and Correct
If you don’t measure, you can’t manage effectively. Whether you take on a task such as Holacracy or not, managing by measuring is a must. “Measure what?” you might be asking… The answer is “Yes” (Measure everything important to driving towards your organizational mission/vision/values).
Tip #2 – Turnover Kills People Businesses (You Do Have People, Right?)
Zappos reports 29% employee turnover during their Holacracy efforts. Now whether that is high/higher than normal, one thing is shared and that is the majority of that number was made up for the first-time by leaders looking to lead (only this time somewhere other than Zappos). Do the right thing when facing turnover and conduct exit-interviews (Interview those exiting the organization to identify why they are departing, and modify if necessary).
Tip #1 – Recognize Performance (and Individuals)
There is no “I” in team, but there is in “Win”… While recognizing performance that drives towards aforementioned mission/vision/values for your organization should be considered a given, is there really no-need to recognize individual team member contribution to said importance?
SUMMARY
In this post, we’ve examined the leadership challenge of Zappos Holacracy, along with 5 tips to Holacracy Success. I loved my time at Zappos, and I think that if you go on the tour or work with the organization you will too! The culture is one that I only wish existed when I started my career (In case you’re wondering, I could see myself spending considerable time in the ball pit!) The challenges of the future of your business could very well be in adopting similar Holacracy moments (However, I would imagine first-to-market leaders such as Zappos will establish a solid benchmark to measure from).
Sam Palazzolo
