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Zappos gives managers the boot

Can Zappos be even more effective without managers?
Can Zappos be even more effective without managers?
Office Space

Zappos the Online retailer takes their cue from Sinatra and does it their way. The obsessed with customer-service the company calls executives “monkeys,” and they have staffers ring cowbells to greet guests. One way they test new hire loyalty is to offer cash to quit!

The online retailer is now, introducing a radical new approach as to how they organize the company. They are getting rid of the "traditional manager." Their goal is to do away with the standard, stereo-typical corporate culture and hierarchy and simply chuck job titles... or at least on the inside.

This atypical set up is being called a “holacracy.” It was developed by a former software entrepreneur. It seems the idea is to replace the traditional corporate chain of command with a series of overlapping, self-governing “circles.”

Theoritically, this gives employees more of a voice in the way the company is run. Zappos executives say that the move is an effort to keep the company, which employees 1500 people, from becoming too stiff and rigid, too unwieldy and too bureaucratic as it grows. In other words, too big for it's britches.

At the foundation, a holacracy's goal is to structure the company around the work that needs to get done and not around the people who do it. The result is employees do not have job titles. They are instead assigned to multiple roles that have very specifit job expectations. And instead of working on just one team, employees are part of multiple circles that each perform certain dutys.

Zappos’s John Bunch. said “As we scaled, we noticed that the bureaucracy we were all used to was getting in the way of adaptability.”

Holacracy, the actual idea is the came from the mind of management consultant Brian Robertson. A software entrepreneur who says he fired off the concept after realizing he was “more interested in how we worked together” than just keeping his own job.

What that results in is, there is no management in the traditional sense. Instead, they have people called “lead links.” These lead links have the ability to assign roles or remove them, but what they can't do is tell people what to do.
The major decisions about what a role entails and how the teams/circles will function are made by a governing process of individuals from each circle.

Zappos makes note that while a holacracy may remove the traditional manager, the company will still have and needs structure. An employees’ work still gets monitored and "Poor performers," Robertson says, "stand out when they don’t have enough 'roles' to fill their time, or when a group of employees charged with monitoring the company’s culture decide they’re not a good fit.

Bunch, meanwhile, makes the point that while the media is latching to the idea that Zappos is "getting rid of managers," what the company is actually doing here is “decoupling the professional development side of the business from the technical getting-the-work-done side.”

Both will tell you that while the system lacks the traditional manager, it does not however, mean that leaders will not emerge. For the most part, the main goal is to get more people to take charge.

On the flip side, some believe that eliminating the corporate hierarchy may look good on paper, it may just wind up to be more difficult than it seemed. A professor at Stanford’s Graduate School of Business and author of the forthcoming book “Scaling Up Excellence“ Bob Sutton, says “show me any group of five human beings or five apes or five dogs, and I want to see the one where a status difference does not emerge. It’s who we are as creatures.”

Sutton does agree with the idea to remove as much friction and internal competition, he does comment that, “creating situations where you’re clear who has decision authority is important. Without that," he says, “you get more politics.”

But let's give this to the reader, would you want your comapny run this way? How would you feel if this structure came to your place of employment? Are you ready to move to Vegas and let Zappos offer you money to quit? Let us know, your opinion counts!