
The Zappos Exodus Continues After a Radical Management Experiment - socalnate1
http://bits.blogs.nytimes.com/2016/01/13/after-a-radical-management-experiment-the-zappos-exodus-continues/?_r=0
======
sremani
I suggest people read the comments on article.

1\. Zappos offered a very attractive payout and most people at an average
company would take it.

2\. 14% in first few weeks and 18% thus far, so after first few weeks the
"exodus" nearly halted to the low 4%, that is low.

3\. Radical ideas, take some time to adaption.

~~~
hobs
You cant come to the company with a radical new plan and have no idea what the
answers to basic questions like "How am I going to be compensated?" before
switching over to that strategy, that's highly questionable.

------
kabdib
The Zappos Holacracy documents I read were nuts. Bad, batshit crazy.
"Tensions" and "next-actions" and "accountabilities" and Policies and Domains
and . . . the Holacracy Constitution reads like they were going for flat, but
freaked out and decided to obfuscate a power structure after all. The
Glassfrog documents are the hesitation marks of ditching a hierarchy. It's
like they want people to execute a script rather than actually do work. At its
core, Glassfrog is afraid of itself.

Try some of the documentation here:
[http://www.holacracy.org/constitution#art1](http://www.holacracy.org/constitution#art1)

(Oh, and it looks like there are companies that will consult with you and help
you move to a Holocracy. Big surprise).

I work in an org that is flat. There's none of that nonsense. You don't need
it. You really don't.

~~~
ErikVandeWater
The documentation reminds me of one of my favorite quotes:

"Consultants invent these kinds of phrases to label things we’ve all known all
along—it’s a perversion of business life that fancy words always cost more
than plain ones, even though the plain ones are more valuable."

From Agile Development with Rails, 4th edition.

~~~
bhauer
> _From Agile Development..._

I assume the irony is intentional?

~~~
ameen
Thanks for the laughs for the day. Even as a Rails Dev I've been wary of those
calling themselves as Agile Consultants.

------
dangrossman
I found the Super Cloud bit interesting. 350 employees haven't been able to
move an e-commerce store onto Amazon's infrastructure in 27+ months. "For well
over a year, Van Beek wasn't even sure the migration was technically possible
... the difficulty of this effort is almost unfathomable". Are the services
Amazon makes available to its own teams substantially different from AWS? If
so, why not just use AWS, and figure out the internal billing?

~~~
ww520
It's probably rewriting Zoppos retail app in Amazon's retail platform. That's
like a redesign, re-architect, and rewrite of the whole app, plus the whole
backend pipeline. That's a huge task. Also retail is driven by huge amount of
data: product category, inventory, pricing, customer info, experiment data,
marketing, ad, clicks, billing, etc. Migrating those data without interruption
with live operation is like changing engine in mid flight.

~~~
BinaryIdiot
You're right it's pretty challenging but 27+ months and 300+ engineers
challenging? I would have suspected to take half the time which makes me
wonder what their architecture originally looked like and what they've been
doing for so long.

~~~
bane
What I think you're hinting at is that a development organization with nobody
driving direction devolves into a pile of people working on pet projects
rather than doing the terrible boring work of shipping product.

[https://en.wikipedia.org/wiki/Conway%27s_law](https://en.wikipedia.org/wiki/Conway%27s_law)

~~~
AndyNemmity
I don't see how Conway's law relates to what you said. Can you please
elaborate? Do you think if no hirearchy is driving direction then there is a
lack of communication between groups that work on projects?

~~~
jhou2
Holacracy implies no organization. It is a freeform, organic, shapeless
philosophy with possibly no direction.

The migration project has taken 27 months with 300 staff, about 8100 man-
months, with apparently little to show for progress. Lots of people in a
project with no tangible features, like a blob.

I would say Conway's law fits perfectly.

------
golemotron
Once the fad is over, will we admit that hierarchy can be beneficial? People
don't want to admit that. Ideological bias.

~~~
mocko
I second the "fad" perspective.

As a DevOps guy with a great deal of startup experience I briefly worked at a
hierarchy-less organisation and found it soul destroying. In the absence of
any hierarchy decisions tend to be made by whomever can shout the loudest;
projects go unmanaged; the needs of minorities (in my case long-term
operational requirements for hosting the damn product) get ignored and appeals
to reason with the company's owners were politely ignored.

My inner cynic wonders if founders love this fad because it saves the payroll
they'd need to spend on experienced managers and absolves them of any
responsibility to run the internals of their organisation, freeing them up to
focus on overall strategy.

The result (admittedly based on a limited sample size - I'm not trying that
again) was chaos. Real lord-of-the-flies stuff. One of the first questions I
now ask when startups approach me is "what's your org structure like" \- and
if they haven't got one I run like hell.

~~~
Animats
_" In the absence of any hierarchy decisions tend to be made by whomever can
shout the loudest."_

This. Classic problem with volunteer organizations. If you have the time, you
can have formal meetings using Robert's Rules of Order, which are designed to
force decisions by voting after discussion. But that's unwieldy within an
operating organization.

The military is formally very hierarchical but, when planning operations, is
much less so. There's a military custom that, when discussing a proposed plan,
the most junior people speak first. (The elder Moltke is credited with this
custom.) This, of course, is to reduce the tendency of people to agree with
their superiors. More than that, it's to find holes in a plan before the enemy
does. Once the decision is made, everyone is expected to carry it out fully,
and not drag their feet, whether they agreed or not.

~~~
XorNot
I suspect this works in the military because the military doesn't tolerate
rebellion - even minor rebellion - much at all. But it has unique, specific
privileges that enable this - it's definitely not a model you can apply
elsewhere with ease.

------
maxxxxx
I don't know how a flat organization works in practice but to me it sounds
like you end up with top management secure in their jobs and having their
equity and everybody else has to constantly struggle to stay relevant. This
may work for some people but most people prefer having some security in their
position.

~~~
bane
Because humans, flat organizations _always_ end up with an informal
hierarchical structure, and that structure very rarely optimizes for
organization success and almost always optimizes for success of the people
who've clawed their way to the top of that hierarchy.

~~~
AndyNemmity
I don't know what an informal hierarchical structure means, and can tend to
guess at things that I think it might mean.

What are the differences between an informal hirearchy, and a formal hirearchy
that makes them unique?

~~~
frandroid
An informal hierarchy is where one gain power through influence and
manipulation (e.g. creating a fight between two other people so you're the
only one who still have good relations with both of them and you're the only
one getting the benefits of these relations). The problem with this is that
you end up with invisible hierarchies with a lack of accountability. At some
point few people understand why a project is stuck and it takes a while to
unearth. God forbid that a small clique forms and finds a way to exploit
failures in the oversight to drain the company for their own interest,
blocking real progress within the company but with the inability to either
point fingers or fire people.

Now with formal hierarchies everyone generally knows who's responsible for
what, but in larger companies you can still end up with inter-divisional
fights, rivalries, etc. e.g. Microsoft under Ballmer. But at least a higher up
can roll their sleeves and clean up house because they have that power, e.g.
Satya Nadella.

~~~
bwilliams18
Basically, in both informal and formal hierarchies the same sorts of problems
can occur, but in an informal hierarchy the phrase "you can't tell me what to
do" is often times a valid response.

------
melted
It'll be same as with Agile: when it doesn't work, consultants will just tell
you you've been doing it wrong.

~~~
trhway
it doesn't work with me (or in my presence) - i don't even need a Scotsman, i
grew up in the USSR and it is like telling me that USSR (or China or Cambodia
or Cuba ...) were doing socialism/communism wrong.

Recently many orgs inside our BigCo have been through couple years of the best
Agile/Lean/Scrum/<whatever crap> the money can buy. It was a zombie-like
horror show and a spectacular failure across the orgs. And one wonderful day
the management and PMs just seem to have waken up and just magically forgot
all these words. We're back to normal planning and developing features like
nothing happened in those 2 years. Magic.

~~~
hderms
How do you characterize your normal mode of development? Just curious if you
would mention a brief overview of how you do things

~~~
trhway
like it has been for the last 25 years starting at the University and through
the places i worked in Russia and here - natural cycle of plan, design,
implement of the stuff slated into the next release (ie. the dirty word of
"waterfall"). It has mostly been pretty large projects with multiple teams
involved (though even in 1988 in high school with a friend developing a small
game we followed the same "process").

As someone said "you can't successfully run marathon by running a series of
sprints". One can try him/herself to run even a couple of miles by running it
as a series of sprints to understand the foundational principle from systems
analysis about the cost of low latency and synchronicity (normally one would
expect that software engineers are aware about it without self-mutilating
experiments, yet here we're ... to really feel the pain make somebody tell
you, strictly each 20 seconds, where to run the next sprint) - those being the
2 main paramount features of Scrum ( note : Agile,insisting on low latency
while relaxing somewhat the requirement of synchronicity, is a little bit less
disastrous on its own, ie. when isn't attached to Scrum).

~~~
melted
For me it's more like this: prototype, design, implement. I do some
lightweight planning while I prototype. All of this is anathema to Agile.
Prototyping alone could mean going dark for a week or two. Design, likewise,
has no useful status to communicate. Implementation fits pretty well, but it's
maybe 1/3rd of the work. I don't think I'd be able to deliver quality software
any other way.

~~~
thawkins
Agile, supports prototyping, and design, its just a task, maybe you where
being too litteral about things.

~~~
melted
Sure it does, about like the USSR supported freedom of speech. What do you
report in your daily standup? What if your prototyping takes four weeks
instead of two? How about if your problem is particularly gnarly and it takes
six weeks? What if it's only reasonable to devote, say, two people out of the
team of six to prototyping? Do they report status (which they already know) to
each other? "Syncing up" with them is useless for the rest of the team. What
if I'm already an adult and therefore don't need adult supervision? Why would
you want to interrupt my "make time" with your bullshit, useless standup, thus
knocking me out of my zone for an hour or more?

On the teams that I ran, we relied on a weekly meeting, lasting about 30-45
minutes to go over what we did last week and what the plans are for this week.
The rest is handled perfectly well with ad-hoc communication. Those teams were
far more "agile" than any of the Agile teams I've seen, since people expended
all their effort on achieving the goals as opposed to figuring out what
they're going to say in the next standup.

~~~
bane
That's basically how I run my teams also. Weekly tempo-setting meetings to go
over status and adjust planning as needed.

Plans are made with broad brush strokes and are expected to be fluid and
details are figured out during development. Planning sets goals, and are used
to time box the work (even if the boxes are different sizes, so no adherence
to stupid 2-week one size fits all sprints). Pre-planning makes it easy to get
stakeholder buy-in without having to go into deep philosophical development
notions. Ad-hoc communications and _gasp_ my involvement with the teams covers
90% of the rest and if major problems occur, the appropriate parties are
pulled into a meeting to discuss and resolve.

My teams are pretty consistently the most productive performers in my
organization, use the fewest people and resources, and produce the highest
quality product at the end of the day. As a result, my teams are consistently
in demand to work on things, and once they're out of my hands and back into
some scrummaster's their performance goes back to normal.

I've noticed an inverse correlation on all of these metrics the more
"Agile/Scrum" the teams seem to be. Between standups, retrospectives, scrums,
and whatever activities the other groups get mired down in, the consistent
complaint is that nobody seems to have time to actually get anything done.

The problem is that Agile is supposed to be about liberating teams from
process and tools and documentation and so on and focus on people and product.
However, the Industry that's exploded around "Agile" has simply created
another pile of rigid processes that bring everybody back to square one again.
Even worse, most people in the industry are so young they think this is better
than what the old fuddy-duddies greybeards used to do and don't have the
perspective to realize they've just become trapped in another set of process
ceremonies that get applied to everything without regard to the nature of the
task at hand.

I just got out of sitting in another team's sprint planning meeting and they
spent 2 hours trying to figure out how to fit O&M and R&D into their next
sprints...30 minutes of which was spent figuring out how to model the Epics.

Agile is a great idea in theory. Agile in practice is a terrible one.

------
TheCowboy
This might be a case of how not to flatten an organization's structure, but
there is always heavy turnover during any restructuring.

There is a key paradox of implementing a "holacracy" in an existing
organization. An organizational hierarchy is trying to force non-hierarchy on
itself.

A prerequisite for such rapid change seems to require an organization that can
rapidly adapt to change. But part of the argument for flat organizations is
creating adaptable businesses.

I haven't read what problems prompted Zappos to push for these changes. Was an
overly bureaucratic hierarchical culture holding a Zappos back from continued
success? Is this admitting that something was wrong with their supposedly
strong culture, but missing the actual problem?

This seems part of a larger trend on insisting hires and workers should have
an almost cult-like desire to be with their current employer. And leaders who
obsessively manage their company's culture and its perception. People who
don't buy into the whole result are treated as non-believers unfit to be part
of their "mission".

~~~
randycupertino
It's that the CEO is kooky and likens himself a management guru, so he wants
to try out his ideas while cultivating press.

------
metafunctor
The concept of paying for people to leave does not make sense to me. I see
companies doing it, and seems to me that they're doing it so they can reduce
headcount without having to actually fire people.

Thing is, the people who will take the buyout will be the ones who are
confident that they can find another job. The company is left with the people
who don't really care about their job, are afraid they may not be able to get
hired anywhere else, or both.

Does this actually ever work?

~~~
spacecowboy_lon
No I recall when British telecom had generous voluntary redundancy several
years pay plus 6 years pension payments. One guy I know got over £200k mostly
tax free

They lost a lot of key technical people who took a huge pay off and joined a
competitor.

And I know that for some specialties (radio planners) who where not allowed to
go - the competition brought them out by paying $100,000k starting bonuses.

------
faike
I'm concerned Hsieh decisions show a blatant lack of concern for maintaining a
meritocracy. Also it doesn't really seem like Zappos cares about attracting
talent. I might even venture to say the decision is driven by the chance to
maximize profits. Imagine how much money you save by firing all your manager.
I've worked at companies that stress how important their bullshit "culture"
is. It's usually to distract from shitty compensation and rare promotions.

------
vskarine
Interesting opinion on the subject: [http://themodernteam.com/flat-will-kill-
you-eventually-why-e...](http://themodernteam.com/flat-will-kill-you-
eventually-why-every-company-needs-structure/)

~~~
nosuchthing
Another nice opinion article which cites the tendencies of "flat"
organizations to create opaque hidden hierarchical political structures, with
some references to Github, Valve, and 60's commune and feminist groups.

[http://www.wired.com/2014/03/tyranny-
flatness/](http://www.wired.com/2014/03/tyranny-flatness/)

    
    
      Critics say flat organizations can conceal power 
      structures and shield individuals from accountability. 
      This idea dates to the 1972 essay The Tyranny of 
      Structurelessness by Jo Freeman, who describes her 
      experiences in “leaderless” feminist organizations in the 
      1960s. “There is no such thing as a structureless group,” 
      Freeman wrote. “Any group of people of whatever nature 
      that comes together for any length of time for any purpose 
      will inevitably structure itself in some fashion.”
    
    
      The problem with supposedly non-hierarchical groups, she 
      wrote, is that power structures are invisible–and 
      therefore unaccountable. That inevitably leads to 
      disfunction and abuse. Charismatic leaders could use their 
      position to advance their own agenda, award desirable 
      tasks and projects to an “in group,” and shift blame for 
      mistakes.
    

and more on Valve's flatness in practice,
[http://www.wired.co.uk/news/archive/2013-07/09/valve-
managem...](http://www.wired.co.uk/news/archive/2013-07/09/valve-management-
jeri-ellsworth)

~~~
MrBuddyCasino

      Charismatic leaders could use their 
      position to advance their own agenda, award desirable 
      tasks and projects to an “in group,” and shift blame for 
      mistakes.
    

And how exactly does that differ from formal hierarchies?

~~~
serge2k
because it's the privileges of management without the formal responsibilities.

------
rorykoehler
Regardless of your prejudices and perhaps negative experiences with holacracy,
I would highly recommend the book, 'Reinventing Organisations', that Zappos'
employees were encouraged to read. You can download it here:
[http://www.reinventingorganizations.com/pay-what-feels-
right...](http://www.reinventingorganizations.com/pay-what-feels-right.html)

It is a fascinating read and will help you think about how to structure your
organisation regardless of what structure you deem fit. The most interesting
insight, which I can see most of the commenters here are probably not aware of
(as I wasn't), is that in Teal organisations (such as ones who implement
holacracy), it is recognised that different structures and behaviours are
applicable depending on the situation. For example in a war an army better
have some hierarchy or they will get wiped out but in a modern company the
hierarchy is not as necessary if at all. Anyways, even if you never touch a
holacratic model, go read the book. Guaranteed to be at least a rewarding
thought experiment.

------
norea-armozel
I like the idea of parallel/independent organizations but I think the problem
I see with their use in businesses is the fact that it can impede the very
purpose of a business: to make a profit from a good or service. To achieve
part of that mission is to specialize where you have someone directing
production (managers) and someone who knows how to produce a part of the
good/service (labor). Now, I do believe managers and labor can be the same
thing at least in terms of dual roles. But to get there you can't bomb out an
existing firm's structure which is what I see Zappo's CEO doing. The turn
around is either going to take a VERY LONG TIME or it may never happen at all
with high churn of employees.

------
jfb
What a surprise: Zappos, as a division of Amazon and not a profit-seeking
free-standing company, has plenty of capital to waste on humoring their sales-
hustling CEO's lunatic ideas about human potential.

------
calibraxis
Anyone have a serious analysis, based on specifics of how they implemented
Holacracy, ideally from multiple people with direct experience?

~~~
Outdoorsman
Had the same question; found some info here:
[http://wiki.holacracy.org/index.php?title=FAQ](http://wiki.holacracy.org/index.php?title=FAQ)

...and a list of organizations currently using it here:
[http://structureprocess.com/holacracy-
cases/](http://structureprocess.com/holacracy-cases/)

------
balls187
Valve, a company that also practices a system similar to holacracy, mentions
that it's not the right fit for some (most?) people. But that style, is the
right fit for Valve.

~~~
jfoutz
mumble mumble chapter 3 mumble.

but, yes. valve does make some pretty cool stuff.

~~~
balls187
Well there in lies the beauty of Valve. From my outside observation, no one is
making a HL3 / HL2 Ep3, because that project can't get critical mass to build
(although there is a part of me that wonders if they'll pull it out for the
SteamVR launch).

It's an interesting method to build entertainment software--build something
you're passionate about and can get others passionate about it, rather than
taking money from a publisher to build something that has someone made a
business case for.

That philosophy doesn't work unless you have deep pockets, which Valve does.

------
tamana
What's interesting about holocracy is that informal hierarchies tends to play
towards women's social strengths more than formal hierarchies do.

------
cicloid
I'm more intrigued by the "Super Cloud". How different is it from the consumer
AWS?

~~~
jon-wood
My guess is that it's a collective name for all the retail systems Amazon are
running to manage logistics, inventory, and everything else that makes an
e-commerce business tick. A lot of that may well be running on AWS, although
whenever that comes up you always hear people mentioning quite a few of their
core systems have yet to be migrated.

