Even CEO Tony Hsieh’s Inner Circle Can’t Describe Zappos’ Insanely Complicated Management Philosophy
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Zappos CEO Tony Hsieh and his inner circle squabbled over the finer points of Holacracy, Re/code reports.
Zappos’ manager-less new organizational structure is so complex that even its biggest proponents seem to disagree about how it actually works.
This past January, the Amazon-owned online shoe retailer announced it would be adopting Holacracy, a relatively new philosophy that replaces traditional job titles with a system in which people hold a variety of roles agreed upon during structured meetings with their peers.
Though some have hailed Holacracy as “the future of management,” the Holacracy Constitution, which outlines the system’s rules and regulations for those who wish to adopt it, is a nearly inscrutable 30-page document that makes no mention of organizational necessities like hiring, firing, or pay.
And a new report from Re/code’s Nellie Bowles indicates that even Zappos CEO Tony Hsieh’s confidants are squabbling over the specifics of Holacracy.
In the story, Bowles recalls having dinner with Hsieh and a group of his friends, including a Zappos employee named Alexis and Don Welch, the husband of one of Hsieh’s cousins and an administrator for Hsieh’s Downtown Project to transform the Fremont East section of Las Vegas.
During the meal, an argument breaks out over how to explain Holacracy’s “circle elections,” a process by which employees tasked with meeting a certain goal decide who will serve in various administrative functions required to help them achieve said goal.
The debate that breaks out is comedic in its inanity. Here’s how Bowles describes it:
“That’s not how I’d define it at all!” said one young Zappos employee named Alexis.
“What you’re saying is not Holacracy,” another responded.
Hsieh interjected: “If this were Holacracy, this would not be allowed.”
“Okay, I’m just going to finish this fucking sentence — Holacracy affords every person sacred space,” Alexis said. “There’s also a dark underbelly — it requires every person to be transparent with their tensions, which is often thought of as masculine. Like, if I think Don’s an asshole …”
“Wait, why me? I’m going to interrupt you right now,” said Don Welch, who runs Downtown Project’s small business team. “This is why Holacracy is the fucking best — it’s the best because it makes everyone responsible for themselves.”
Later, Hsieh describes Holacracy in a way that offers little clarification.
“If you think of every employee as a human sensor of tension, everyone gets their tension processed,” the Zappos CEO tells Bowles. “If you think of the organization as a giant ball of yarn — you can plan out how to untangle it — or everyone can draw out their own tension. That’s Holacracy.”
Zappos intends to have Holacracy implemented across its 1,500-employee company by the end of the year.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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