Quick, stop what you’re doing and imagine what your company would look like if there were no managers or job titles. Would it be total chaos or would there be an even more increased level of efficiency? Zappos is betting it’s the latter, as the company moves toward converting its entire workforce to what’s known as a holacratic model.
The online shoe and clothing shop, an independent unit of Amazon.com, has never been one to shy away from unconventional business techniques and is widely regarded as a corporate culture trendsetter. Now all eyes are on the company as it banks on the New Age leadership style to break down barriers and increase employee productivity and entrepreneurship.
With that in mind, here are five things you ought to know about the company’s transition to this model.
- What IS holacracy? Is it new? Holacracy, the brainchild of entrepreneur Brian Robertson, is a practice aimed at radically shaking up organizational structures, decision making and distribution of power. While holacracy as a concept itself isn’t brand new, you’re probably hearing whispers about it now because Zappos is the biggest company to date to adopt it.
- When are they expected to complete the transition? At the moment, roughly 10 percent of Zappos’ employee base currently adheres to this structure, but the goal is to roll it out to all its approximately 1,500 employees before the end of this year. And that’s probably all they will be known as — employees. Because as of the end of 2014, none of them is expected to retain a job title.
- What’s the point? The idea behind holacracy is to prevent growing startups such as Zappos from becoming bureaucratic, a trait typically associated with larger organizations, by eradicating management and injecting transparency. The idea is to focus an employee’s attention on the task itself rather than on trying to impress the boss.
- Who makes decisions? Who’s the boss, you ask? No one — and that’s the point. Instead of going up the chain of command, decision-making is entrusted to groups of employees, also known as circles. Workers assume whatever roles they want within these circles. Who decides which tasks to distribute? The group as a whole does.
- Do people get promoted? Or fired? Seeking a promotion in a holacracy sounds counterintuitive. In terms of expanding one’s professional scope, however, an interesting caveat is that employees don’t have to focus solely on their area of expertise; they are also encouraged to seek out other functional areas that may be of interest and pursue those simultaneously as well. Apparently, if someone proves to be incompetent at a number of different tasks, the group can decide to let the person go.
Interesting questions to consider
There are other questions for which we don’t have easy answers. For instance: How do you advertise for an opening without a job title? How do you effectively convey job roles and expectations to candidates? What does career pathing or career advancement look like in a holacracy? Or is there simply no upward movement available? Do all groups or circles operate under the same rules and, if not, what standards are people judged by? What do performance appraisals look like? How is pay determined? Who will take the blame if there’s a big oops? Who do you go to if people problems or tensions arise? How big is too big for holacracy to work effectively in a company?
Tell us what YOU think. Do you see holacracy as a trend with the power to challenge our traditional notions about hierarchy and revolutionize the way we’ve always approached leadership? Or does it sound like a management nightmare? Tell us in the comments below or tweet us @CBforEmployers.Related