Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

What is holacracy and why does it work for Zappos?

Sarah K. White | Aug. 6, 2015
Zappos made headlines in 2013 when it announced plans to transition to holacracy -- a management-free corporate structure. One of the biggest motivating factors behind Zappos' decision to restructure isn't that different from what plenty of other well-established companies are seeking: cultivating a startup culture.

It's intended to help people peruse their passions within the workday, by expanding their work outside their primary job. Sams likens it to your college major, where you typically take the majority of courses in your main discipline, but there is always room to take a few classes in other areas, ones that you may be particularly passionate about.

The Role Marketplace can also help with employees seeking raises or those who might want to transition departments down the line, by helping employees earn badges. "Badges are a way for us to determine who can fill those roles. A lot of times a lead link will have a role available that they want to open up to the entire company," says Sams.

For every job posted on the Role Marketplace, there are certain qualifications that limit who can take on the role or side project. These badges equate to skills, so theoretically, you could set your sights on a specific job, figure out the requirements, and earn those badges to make for an easier transfer. Badges make it easy for others to identify your skills so that you can show you're qualified to take on a new project or role within the organization.

You can't completely escape traditional structure

It's easy to sense that Zappos is grappling with its new structure and how to define it both internally and externally. And they're the first to admit it, "It's definitely been a transition and there's been a learning curve, but we're getting closer and closer to that goal," says Sams. For example, when dealing with outside organizations and clients, employees at Zappos still need some way to designate their role, even though the company got rid of titles.

And it makes sense, defining roles is ultimately unavoidable -- at least until every other company adopts this holistic approach to business. Even then, you want to be sure you are connecting with the right people in a company, which leaves titles somewhat relevant even in a boss-free environment. "We don't have internal titles anymore, we do try to determine what people's external titles would be for the purpose of [communicating] with vendors and external partners, so it is beneficial to have some type of external titles," says Sams. However, unlike traditional job titles, Zappos' titles are based on your job skills and what you do with the company, rather than your position within a hierarchy.

You'll notice that a sense of management or leadership comes back into play when it comes to raises and firings. Which makes sense -- just because you are in charge of your own direction within the company, doesn't mean you can simply grant yourself raises as you see fit or fire people at will. But rather than going through your direct boss for compensation, you go up in front of a circle of individuals, as though you're defending a dissertation or making your case as to why you shouldn't be voted off on the island. "It's in the employees hands to go through that process if they feel they should be compensated a little more," says Sams.


Previous Page  1  2  3  Next Page 

Sign up for Computerworld eNewsletters.