Just a few days ago, 50 Zappos employees quit their job. What caused 18% of Zappos employees to decide they couldn't handle the heat? CEO Tony Hsieh explained his innovative project management style that gave employees the choice of a severance package or participation in his "Holacracy". Hsieh made this offer to his employees last March, and since, over 18% of his workforce has chosen to resign. The CEO's new PM style consisted of no managers, no titles-- the standard hierarchy virtually eliminated. Many internal and external changes took place at Zappos that called for a refresh in project management strategy. Rather than having the standard hierarchy, Hsieh thought that a total renovation would be a great move for the growing company.
Hsieh first heard about Holacracy at the 2012 Conscious Capitalism CEO summit. Hsieh decided that this was the best method because it encourages long term self management and self organization. This system prevents the bureaucracy that was beginning to play a more and more in the company. The CEO wanted to avoid losing the start up edge that was so valuable to the company while still empowering each employee to work with an entrepreneurs spirit. Because this environment is not suitable for everyone, a generous severance package was offered to employees. The new approach allows for employees to be more independent and self motivated through tech projects. The CEO hopes that this will encourage creativity and innovation while still sticking to the company's values and goals that made them so successful from the start.
Source: http://www.businessinsider.com/tony-hsieh-explains-how-zappos-rebounded-from-employee-exodus-2016-1
Very cool, but what do you think is the takeaway here? Is this just a unique CEO, or is Holocracy a best practice for self-organization. This reminds me of AT&T asking people to leave with pay if they don't want to learn new digital programming skills. I like what Hsieh says, "Holacracy happens to be the tool we're using today, but the bigger theme is about self-organization and self-management." He also says there is more structure than less. "It's actually a hierarchy of purpose. Instead of a pyramid, power is distributed across different circles dedicated to specific functions — we have about 500 circles at Zappos, and they fit in a hierarchy relative to one another." It should be interesting to see how bureaucracies morph into something more fluid.
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