Holacracy at Zappos

I’m surprised at the great amount of interest (and misinformation) floating around about Zappos’ adoption of Holacracy. Speaking for strictly for myself (and not as some official untitled, managerless representative of the company), I can say this:

What it isn’t

• It’s not “getting rid of the managers/bosses“

Management, as a concept, is not equal to supervision or career development, and even those things still need to be done. In my role, that’s actually a pretty small part of my responsibilities. I spend much more time setting strategy, removing my team’s roadblocks, researching, hiring, and coordinating with other groups than I do standing over someone and asking them what time they got in. We use agile for development give visibility to progress. I certainly try to mentor my team on their performance, but I have never liked to be the dad to their misbehaving children. They’re all competent adults. I try to help them get their work done, and I try to ensure that our strategy is well-aligned with that of the overall company and the skills and interests of my team.

What Holacracy is intended to do is de-couple the “getting work done” part from the “employee management” part. The theory is that, by arranging work around things needing doing instead of hierarchical functional departments, the right people are working together, and people skilled in “people management” are handling evaluation, progression, salaries, etc.

• It’s not just another word for matrix management.

Matrix management, which is in my opinion a recipe for disaster, is drawing dotted lines on a traditional org chart and hoping everyone works cross-functionally and the political details just work themselves out.

Holacracy is similar in the idea that you can work with one group and work for someone else– if working “for” someone is being evaluated and mentored by them. But, in Holacracy, the distinction is very clear. The person manager has nothing to do with your responsibilities. The lead link of your circle does not deal with your sick leave. Of course, there will be some conferring on performance between the people managers and the circles, but that, too, will be clearly defined.

• It’s not anarchy.

If anything, Holacracy is far more structurally defined than any management system under which I’ve worked. There are governance and tactical meetings. Each is very specifically designed to allow issues to arise and be dealt with quickly. What should rarely happen is that issues are left to fester. Someone will be defined as the person who decides such things. If not, that’s an issue, too. And it, too, will be dealt with.

So, what’s good about it?

While the rollout at Zappos is still ongoing, I’ve heard a lot of feedback from people working under the system now, and there are some commonly mentioned benefits:

• Less micro-managing: Once the outputs of the circle or role are defined, they are pretty much left to their own devices to get them done. If, and only if, a problem arises, they can be aired and resolved. It feels much like agile in that sense. There’s a greater sense of autonomy.
• “Technology/marketing/media/you-name-it management” is decoupled from “human resources”: Honestly, I’m not keen on tracking vacations, approving expense reports, or being on the hook for other professionals’ output. I like mentoring people. Maybe I can sign up for that specific accountability in a people circle role, but if I do, it’ll be clear to everyone.
• A voice for the introverts: The structure and process of Holacracy ensures that everyone gets their opportunity to throw in their $.02. *See below. No more timid guy who knows the servers are at full capacity keeping it to himself.
• A limit to the voices: You get your opportunity, but you don’t get to dominate or derail the discussion. You can’t object just to object. Holacracy defines what a valid objection is and when that has to stop. No more opinionated gal who loves to hear herself talk stealing the floor for the whole meeting.

What’s bad about it?

• Learning curve: It takes a while to understand the flow and get the circles functioning, and people can get impatient and frustrated.
•  Mental resistance: Change is hard. If you happen to like the status quo, this isn’t it. I hear lots of reports of people seeming to intentionally try to torpedo the meetings out of sheer resistance to change. Luckily, Holacracy is built to deal with that.

There are still plenty of areas that we just don’t know about. Zappos is the largest company, by far, to adopt Holacracy yet. Questions have been raised about the scalability of the system, the difficulty of truly retiring the old hierarchy, what to do when Holacracy theory clashes with realities of hiring and retention issues or dealing with non-Holacractic externalities, and much more.

As an employee, though, I’ve come around to a feeling of potential for the whole thing. It’s new and different. The theory makes sense. If we push through the initial discomfort, maybe we have a real, sustainable competitive advantage and can accelerate our innovation and growth while maintaining the culture that makes Zappos unique.

Again, these are my personal thoughts on the subject. If you have questions or comments, please feel free to drop me a line:

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