Tony Hsieh doesn’t want to be CEO of Zappos anymore. Okay, that’s not quite true. In reality, he doesn’t want the title “CEO.”
In a move that some outlets are already touting as the hot, new management trend of 2014, Hsieh will flatten his organization and implement a Holacracy.
Hola what? Yeah, a Holacracy (it’s capitalized because it’s a brand, folks), which is “a distributed authority system—a set of ‘rules of the game’ that bake empowerment into the core of the organization,” as defined by HolacracyOnce LLC. “Unlike conventional top-down or progressive bottom-up approaches, it integrates the benefits of both without relying on parental heroic leaders. Everyone becomes a leader of their roles and a follower of others’, processing tensions with real authority and real responsibility, through dynamic governance and transparent operations.”
For Zappos, about 10 percent of the company currently operates under a Holacracy. By the end of year, all 1,500 employees will operate under the system.
However, Alison Griswold, a reporter for Business Insider, says it won’t work. She says that the fundamental issue is that people don’t self-regulate or discipline themselves that well. Another reason is attrition.
“Companies bled talent as successful managers jumped ship instead of losing their titles,” she wrote. “At the same time, poor and mediocre managers that the companies hoped to effectively demote continued to be seen as de facto leaders.”
Over on Medium.com, Alexis Bowers with HolacracyOne addresses some of the common myths surrounding the operating system.
“Holacracy specifies how to decide, not what to decide,” Bowers wrote. “There are principles an organization can align with when designing systems like compensation that will align well with Holacracy, but there’s no one prescribed answer.”
And it’s not a cure-all, either.
“It is simply a technology that specifies how an organization can build its bones and structure itself,” Bowers wrote. “It probably doesn’t do all of the magical things that folks think it will do, but it can be pretty transformative. Holacracy will not make unicorns pop out of cupcakes, but if practiced regularly, there is increased transparency, efficiency, and more distribution of power and authority.”
Back up there. It won’t make unicorns pop out of cupcakes? Well, then, maybe it’s not for me. Maybe it’s for you, though. How would you imagine your organization operating under a Holacracy? Please share your thoughts in the comments.
(Image from the HolacracyOne Facebook page)