Zappos: A Workplace Where Holacracy Rules

Zappos: A Workplace Where Holacracy Rules

Life at Zappos:

Zappos adopted a system of self-governance that effectively has eliminated all management. This spring, Zappos CEO Tony Hsieh — an entrepreneur known for his opinions on management — sent an all-staff email explaining how the entire company was embracing a concept known as “holacracy.”

Holacracy is based on a term and concept coined by anti-totalitarian political writer Arthur Koestler. Its central tenets include individual autonomy and self-governance. In a holacracy, employees aren’t told how to work. Instead, they belong to voluntary groups called “circles,” or peers who help vet new ideas or problems. Everyone has equal say, and employees are evaluated and rewarded by peers, instead of by a boss.

“We don’t have to put someone on hold and ask permission,” says an employee. “We don’t have a manager that you need to be transferred to. How refreshing is that?”

 

Holacracy may sound like a recipe for chaos. But in fact, meetings are highly structured. Anyone can add items to the agenda, which is documented using online software so everyone can monitor every decision. There are meeting leaders, known as “lead links,” but their role is essentially limited to directing meetings according to a set of rules. They also help the circle keep track of its time and money resources.

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