May 26th, 2015
Categories: E-Commerce, Employees, Management
“Holacracy is a radically different management system that changes how an organization is structured, how decisions are made, and how power is distributed. 300+ organizations are already running with holacracy”– http://holacracy.org/
The policy at Zappos, according to Rachel Emma Silverman, has been to pay a month’s salary to any new hire who wants to quit because Tony Hsieh, whom Silverman called “the leader,” only wants employees who are “truly excited” to work there. From one to three percent accept the offer. Now, for the same reason, he’ll pay at least three months severance to any employee who isn’t comfortable with a change in management structure and 14 percent—210 people–accepted the severance. Zappos is an online retailer, originally headquartered in San Francisco and now in Nevada, that sells shoes and clothing.
In her Wall Street Journal article “At Zappos, Some Employees Find Offer to Leave Too Good to Refuse,” I first heard about Holacracy. Silverman wrote: “The exodus comes amid the company’s transition to an unusual management structure called Holacracy, in which employees essentially manage themselves, without traditional bosses or job titles.”
Silverman continued: “The company has acknowledged that the transition to this new form of self-management has been a difficult one. In March, Mr. Hsieh sent a 4,700-word memo to staff stating that Zappos, an independent subsidiary of Amazon.com, was taking too much time switching to this new management structure.” That’s when he offered the severance.
On May 20th, Silverman wrote a front page Wall Street Journal article, “At Zappos, Banishing the Bosses Brings Confusion,” which goes into the concept more fully. In the second article Silverman quotes 26 year old Brironni Alex: “I am managing the work, but before I was managing the worker.” Silverman continued: “Ms. Alex says the changes give her more time for a workplace diversity committee and to perform on the Zappos dance team.” Alex is also on the team to convert the company to the new management system.
The article was illustrated by a wall of cut-off neckties because of the retailer’s “no neckties allowed” policy. I saw this at a steakhouse in Dallas, Texas some 20 years ago so I was surprised a company that tries to distinguish itself by being hip fell for such a tired idea.
It’s unusual enough to motivate employees to stay by paying them to leave. It will be interesting to follow the success of the self-management style which is great for self-starter types that most people claim they are during job interviews. Entrepreneurial types would also excel.
Have you heard of Holacracy before? Do you know anyone who has worked in such a management system? Have you instituted a new system or worked at a company that did? What was it like? Do you think people make such changes to keep employees alert and on their toes?