14% of Zappos Quit This Week – What Does That Mean For Managing Your Business?

Zappos - Tony Hsieh and HolocracyA few years ago, I read Tony Hsieh’s book “Delivering Happiness.”  It is still one of my favorite business books that I’ve ever read.  Tony Hsieh has created one of the top cultures in modern day Corporate America.  Zappos hires for culture fit more than skills, and has no problem shaking up the mix if the team culture isn’t working.  In my opinion, Zappos is on the cutting edge of corporate culture “experiments.”

What is Holacracy?

Holacracy – This year, they decided to try something new and different, and they gave their staff the choice to decide if they wanted to participate.  They are trying a management style called “Holacracy.”  I called it a management style – but it’s actually meant to be the opposite.  It is meant to be “self management” with little to no oversight.

Earlier this year, part of the memo was leaked.  A little bit of the memo read:

As previously stated, self-management and self-organization is not for everyone, and not everyone will necessarily want to move forward in the direction of the Best Customers Strategy and the strategy statements that were recently rolled out. Therefore, there will be a special version of “the offer” on a company-wide scale, in which each employee will be offered at least 3 months severance (and up to 3 months of COBRA reimbursement for benefits) if he/she feels that self-management, self-organization, and our Best Customers Strategy and strategy statements as published in Glass Frog are not the right fit. (For employees that have been with Zappos for 4 or more years, the offer will be 1 month for every year worked at Zappos, along with up to 3 months of COBRA reimbursement for benefits.)

I have been watching the debate over this for the past few days – especially among business owners who have a staff. Most owners feel that this is not practical.  That their staff needs too much supervision to not have management, and will only do the bare minimum to not get fired.  Many entrepreneurs feel that this may be the way to attract and retain great staff.  There is no real answer yet as to who is right.

But the most interesting thing about this to me is the fact that 14% of their workforce either wanted managers or felt they couldn’t/wouldn’t be successful without managers.

I can tell you that I applaud Zappos for again being on the cutting edge of culture and management.  I will be watching this eagerly, and am hoping that Tony Hsieh writes a book about the experience and whether or not Holacracy is a management fit.

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