What if Government Embraced Holacracy?
Holacracy is not a lack of structure; it is a new way of structure that allows organizations to be more agile and to more rapidly adapt to change.
Holacracy at Zappos
Zappos was founded in 1999 and is now one of the largest online clothing and shoe stores in the world, with over 50,000 options to choose from. Acquired by Amazon in 2008, it now employs more than 1,500 people and has an annual revenue of over $1 billion, up from only $8.6 million in 2001. The astronomical growth that has taken place within the company is apparent.
But this growth worried CEO Tony Hsieh because he understood that as companies grow in size, bureaucracy and politics start to set in. He wanted a new way to run the company — one that would allow Zappos to stay agile and innovative in the midst of the rapid growth it was experiencing. That is when he discovered Holacracy.
Hsieh announced in December 2013 that the company would switch to Holacracy. This change included flattening the organization by removing all job titles and making managers obsolete. Individuals would self-organize by operating within a new framework and adopting a set of roles that would allow them to adapt and change more quickly. In short, they would operate under the Holacracy Constitution.
Everyone took notice as Zappos began making its transition. Along with the help of HolacracyOne LLC, Zappos began the rollout — and the world watched. As with most transitions, not everything has gone according to plan. But nearly two years later, Zappos is still committed to Holacracy and offers some great insight
into how it can be adopted into other organizations.
Zappos understood that not everyone would buy in to the new system, so it offered employees who chose to leave a severance option of three months. Most people will focus on the 14 percent who decided to take the severance, but Zappos understood that change is difficult. It takes a strong leader to make such a bold decision — but Hsieh knew it was necessary to make the transition successful.
Zappos started out with a controlled group so it had a good understanding of how the system would work for the company. This is an important step for any organization looking at Holacracy. It is still early in the story for Zappos, but given how adaptable Holacracy is, good things are likely to come. There will always be growing pains in changes as big as this one. But as Holacracy becomes fully ingrained into the company's organizational culture, we will really begin to see its benefits.