Holacracy and Self-Organization

Zappos has been officially using Holacracy since January of 2014, but our experiences with it have been largely shrouded in mystery to the outside world. What better way to know about what is happening in Zappos with regards to Holacracy and self-management than for us to share that with you ourselves? We will be providing you with insight into our own successes and struggles, as well as what we have learned over the years. We'll share how you can benefit from self-management, whether you are looking to change your entire organizational structure or just slightly improve how you do things.

What Is Self-Management / Self-Organization?

At it's core, “self-management” means knowing exactly what you are responsible for, and having the freedom to meet those expectations however you think is best. “Self-organization” is being able to make changes to improve things - beyond what is required of you. Simple in theory, but everyone has to truly commit for it to work!

Then, What Is Holacracy?

There are countless different methods for a company to become more self-managed and self-organized. Holacracy, which was created by HolacracyOne, is one of them. Holacracy is like an operating system for your organization. It is a predefined set of rules and processes, checks and balances, and guidelines that an organization can use to help them become self-managed and self-organized by giving every employee (instead of just management) the power to innovate, make changes, and have a voice.

Okay, So Why Did Zappos Want To Be Self-Managed/Self-Organized?

Zappos has always been focused on delivering exceptional customer service - we call it WOW service. To provide WOW service, it’s important that every employee understands our customers’ needs, and has the ability to improve the customer experience whenever possible. As our company grew, we became slower to sense and respond to customer feedback, because of the layers employees needed to go through to get things done. Holacracy is a tool that allows every employee to quickly surface and act on customer feedback, so we can continuously provide WOW service, regardless of the size of our company.

But Why Use Holacracy Specifically?

There are a lot of companies self-managing in a lot of different ways, but most of them created and developed their own unique method and honed it over several years. So, why did we go with Holacracy? Aside from it arguably being the most publicly well-known, it is one of the only pre-built, out-of-the-box options that any organization can implement, regardless of size, sector, or industry. Holacracy immediately provided us with a set of rules and processes that everyone could see, with a lot of the nuances and checks-and-balances already figured out for us.

Are You Still Using Holacracy?

Zappos is still using Holacracy and we currently have no plans to change that. However, Holacracy is built to focus on the work, rather than the people, while Zappos is *all* about the people. So, we've evolved how we use Holacracy to find ways to layer our culture, core values, and focus of people into the system in a way that works best for us. One example of how we've kept culture and people top of mind while using Holacracy was by integrating our Oath of Employment into our Holacracy practice.

“Attention Zappos! With all this exciting talk about Holacracy and its implementation across Zappos, you might be wondering… Where and how do the Zappos Core Values fit in all this? Hold that thought.

If you haven’t yet, you will soon be learning all about Holacracy. One sentiment you will hear frequently is that in Holacracy, we make the implicit, EXPLICIT! :) Or in other words, we use Holacracy to clearly state our work, our accountabilities, and our purposes. No more unspoken or “understood” expectations. All of it goes into Holacracy and GlassFrog now yo!

We all know that our culture and our core values are THE secret sauce behind not only our success, but our love for this company and for being a part of it.

That said, we want to clearly place our Core Values, the backbone of our Culture, into Holacracy and GlassFrog so there is no question that even in this awesome movement towards self-organization, our Core Values come first.”

 

Interested in Holacracy and Self-Organization?

If you want to understand Holacracy itself, you can visit this link to find a variety of resources to give you insight into the core concepts of the tool. While we may share some of our personal thoughts on Holacracy, most of the content you’ll see from us will be our take on how to self-manage in a simple, yet effective way that integrates with your company culture.

Articles and FAQ on Holacracy and Self-Organization

What are the benefits of self-management and self-organization?

High level, you have less layers between your employees and your customers. So you get faster and more creative decisions that improve customer satisfaction.

Was it easy to implement self-management?

Definitely not. It was a new venture for us and we had to overcome a lot of hurdles to get to where we are. However, the hindsight of our challenges has also taught us a lot, which will surely benefit us as we continue evolving and moving forward.

Do you really have no managers?

Yes and no. We still have leaders and a lot of people associate leadership with management. We still need people to hold others accountable and terminate people when necessary. In traditional structures only managers/execs have the authority to make changes/decisions. In our organization everyone has the authority to make changes to the company and decisions in their work.

Can people really do whatever they want?

It is a common misconception that in order to be self-managed people can do whatever they want. When true self-management is happening, people understand exactly what is expected of them and then have the ability to do what they think is best to get that done. The clearer the goals and expectations, we found, the more effective it is to self-manage. There are still rules and guidelines - job specific and Zappos culture specific - that people must adhere to. Everything we do must also remain compliant and legal. The key is communicating to employees that we want folks to find the intersection between what they are passionate about, good at, fulfills the purpose of the company, and is in the best interest of Zappos.

Articles

10 Ways Leaders Limit Success

Speak Softly and Carry a Big Stick

Holacracy is Not What You Think

The Zappos story: Is holacracy a proven structure for improving customer experience?

No Managers, No Problem: How Zappos Became A Holacracy

Beyond the Holacracy Hype

Zappos Holacracy Timeline

October 2012

Tony saw Brian Robertson, the creator of Holacracy, speak at a conference.

 

November 2012

Tony had an introductory meeting about Holacracy to explore the idea.

 

January 2013

A small group of Zapponians went to a 2-day offsite to further explore the potential of Holacracy to help decide if it was right for Zappos.

 

April 2013

Our HR department (consisting of ~70 people at the time) became a pilot group to test Holacracy within Zappos.

 

September 2013

Tony officially announced the plan to use Holacracy at our company-wide All Hands Meeting.

 

January 2014

Holacracy officially began to roll out to Zappos as a whole.

 

March 2014

Zappos’ own implementation team started training all employees on Holacracy in-house (we were originally being trained by HolacracyOne).

 

March 2015

Tony sent out a company-wide e-mail where Zappos employees first received “The Holacracy Offer”. The e-mail contained what our vision of the future was at the time. In the years that followed, we would come to better understand what self-management really was, as well as tailor Holacracy to fit our unique needs. As one example, the e-mail mentioned that we no longer had a need for "people managers", because Holacracy uses "Lead Links" in their place. As we would later learn, we still very much had a need for the skills, knowledge, experience, and leadership that most formal managers had.

It shared what our vision of the future was at the time. In the years that followed, we would come to better understand what self-management really was, as well as tailor Holacracy to fit our unique needs. As one example, the e-mail mentioned that we no longer had a need for "people managers", because Holacracy uses "Lead Links" in their place. As we would later learn, we still very much had a need for the skills, knowledge, experience, and leadership that most formal managers had.

 

June 2015

Holacracy training became part of our New Hire onboarding process, ensuring that every new employee to be hired would go through Holacracy training as well.

 

September 2015

Holacracy was finally rolled out to the last team in Zappos, marking the technical end of the “implementation” period.

 

October 2016-17

The majority of the company went through an updated training to get everyone on the same page about what has changed over the years, what’s most important, and what self-management should look like at Zappos.

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