Employee Brand culture: Zappos with a whole new holacracy

January 21, 2014

There are no job titles or managers, making everyone responsible.

Among those of us who follow trends in employee brand culture, few companies stand out as innovative—if not as iconoclastic—as Zappos. The Internet retailer has long been known for its devotion to promoting passion, humor, fun, and organizational silliness among its employees. Unlike other new leading companies such as Google and Yahoo with their legendary employee perks, Zappos’ recent announcement that the organization planned to re-organize its internal structure with a non-traditional structure based on a “holacracy” comes as no surprise.

According to the HolacracyOne, LLC website, holacracy is “a distributed authority system – a set of “rules of the game” that bake empowerment into the core of the organization…everyone becomes a leader of their roles and a follower of others’.” In effect, there are no job titles or managers, making everyone responsible for completing tasks on time as agreed. It makes transparency the ultimate goal.

The idea is that at Zappos, and perhaps other companies with highly integrated and interacting cultures, the holacratic structure will encourage more fluidity between people. In effect, a holacracy eliminates the classic hierarchical org chart. Decision are now by consensus, guided by a leader, but informed and managed by an entire group. Responsibility is shared between the circle and people in multiple circles foster collaboration.

With a large part of Zappos’ employee population focused on customer service, and all members of the organization likely sharing a similar mindset towards getting the goods out on time and to the right customer, a holacracy makes perfect sense.

But what about those businesses that need to have a more traditional silo structure? Companies where product development, manufacturing, sales and operations need to be discrete entities with their own management decisions? As brand consultants we usual counsel companies like this to break down silos to allow for more brand integration.

Perhaps the lesson from Zappos’ holacracy is less about doing away with org charts, departments and command-and-control management top down, and more about thinking differently about the best way to serve the customer. As Theo Priestley, the controversial technology evangelist, quips about holacracy, “you can’t run a 21st century business in an 18th century structure and expect it to outperform the competition either.” But no matter how many Venn diagrams a company draws, the customer should always be at the intersection of all of them.

How is your company organized? Would a holacracy work for you? How is your business structure changing? Let us know.

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