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.

by , / October 9, 2015

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.

IntroductionHolacracy 101: An Overview | Holacracy in Government | Holacracy Resources | Final Thoughts

Dustin Haisler Chief Innovation Officer, e.Republic Inc.

Dustin Haisler is the Chief Innovation Officer of Government Technology's parent company e.Republic. Previously the finance director and later CIO for Manor, Texas, a small city outside Austin, Haisler quickly built a track record and reputation as an early innovator in civic tech. As Chief Innovation Officer, Haisler has a strategic role to help shape the company’s products, services and future direction. Primarily, he leads e.Republic Labs, a market connector created as an ecosystem to educate, accelerate and ultimately scale technology innovation within the public sector. Read his full bio.

Tim Howell Contributing Writer

Tim Howell is a former government technology and innovation guru for multiple government agencies across the state of Texas. His leadership and tech savvy quickly landed him at the bleeding edge of the public-sector market. Recently, he has taken his years of experience and success and founded made4gov.  By rethinking government content and promoting healthy discussions, he helps government agencies adapt to new technologies and meet the growing demands of citizens. Tim is also the author of the Innovation PACT, The No-Nonsense Guide to Sustainable Innovation. You can download the first section of Tim’s new book at http://www.innovationpact.com/free.

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