
210 Zappos employees – 14% of the staff – take buyouts after CEO ultimatum - jhonovich
http://www.businessinsider.com/zappos-employees-take-buyouts-new-self-management-structure-2015-5
======
logicalmind
I work at a company that was in bad shape during the financial crisis. A
temporary CEO was put in charge. Ultimately, a number of companies were merged
to create one company that could survive. In the end, one of the CEO's of the
merged companies became the CEO of the final company. His first act as CEO was
to offer everyone in the company a tenure-based package to leave the company.
I don't know the full numbers, but nearly everyone in the IT department took
the deal. And I am aware of many people in other departments who took the deal
as well. Rumors were that between 30 and 40 percent of staff took the deal.
Once this happened, the company got rid of that CEO and had to then offer
alternative packages to people to stay. Basically the same amount you would
have received if you left, but paid out to you over a few years to guarantee
you'd stay.

It was unclear what his intentions were. To determine loyalty to the company,
possibly. But what actually happened was that people who were good at their
job, and could find work elsewhere, left. So they would have had all of the
top talent leave the company and the remaining employees would be the people
who did just enough to get by. The company is still trying to make amends with
the employees.

~~~
exelius
I think the idea with Zappos is that they're supposed to be such a great place
to work that you wouldn't want to leave.

And in Zappos' case, I get why they offered severance deals. They were
embarking on a radical experiment in organizational structure, and not
everyone is going to be on board with it. Rather than having a bunch of people
at the water cooler talking shit about the changes, you offer them money to
leave so that people who aren't on board with the changes get out of the way.

I would guess that many of the people at Zappos who took the deal were
managers themselves. If you're a middle manager, you have skills around
managing people but maybe not so much with doing the actual work. If your
skill set doesn't align with the new job you're being asked to do (which is
effectively a demotion), and the company offers you a buyout to leave, what
would you do?

~~~
Spooky23
I'm surprised the number of people taking the deal isn't higher. If I need
religious zeal, I'll go join a religion.

~~~
dingbat
well another way to look at it is that there is already a fundamentalist
organizational religion that most people adhere to, they're just unaware of
being part of one already

~~~
some1else
Please identify this "fundamentalist organizational religion" a bit clearer.
Did you mean capitalism, b-school, emergent hierarchical organizations..
tribes?

~~~
dingbat
its pretty simple, there is obviously a very ingrained faith in the standard
organizational structure w/ management, staff. its so obvious that is how
things should be (its "fundamental"), that its difficult to consider that
belief is possibly also a matter of faith, even if that standard structure was
itself emergent in some respects.

its possible the commenter i was responding to was referring more to the "rah
rah" aspect of zappos as a whole, rather than religious zeal re: this new
organizational concept. those are different things in my mind, also both are
exhibited by the directive "to all employees: read this book and indicate you
have done so".

anyway it isnt a comment on whether or not the zappos idea itself is useful
and/or just another fad coated with new terminology (i have no idea). just
that when you can identify someone else as engaging in religious zealotry, its
fun to consider what that zealotry is being compared to, which probably turns
out to be something like "everybody knows its supposed to be this way", aka.
some sorta implicit religion.

------
bane
I'm not sure how to gauge this. I think Holacracy may be one of the dumber
pseudo-science management theories that's ever come out. If it works for
Zappos I'll eat my hat I guess, but I have a feeling that all we'll hear about
it is that "it's working great!" as the ship goes down in flames.

Holacracy and other ultra-flat org structures always share two features:

\- It consolidates power in the people at the top (the people who do not
participate in the flatness of the new structure)

\- as social animal, humans will _always_ naturally self-organize into de-
facto hierarchies that may or may not be aligned with the needs of the
organization

Prediction, the 14% that took the buyout are probably the ones that couldn't
fit into the new clique driven de-facto structure and were kissing years of
promotable work goodbye. These folks will likely be successful wherever they
go. Meaning that the people left behind have either cemented a position in the
new structure through force of personality (not competency) or are not
otherwise employable elsewhere and will suffer as the assholes fight it out on
the bridge.

Here's an employee review

[http://www.glassdoor.com/Reviews/Employee-Review-The-
Zappos-...](http://www.glassdoor.com/Reviews/Employee-Review-The-Zappos-
Family-RVW6462350.htm)

~~~
ryoshu
Seems to work for Valve, with a few obvious problems:
[http://en.wikipedia.org/wiki/Valve_Corporation#Organizationa...](http://en.wikipedia.org/wiki/Valve_Corporation#Organizational_structure)

~~~
bane
Here's Valve's reviews

[http://www.glassdoor.com/Reviews/Valve-Corporation-
Reviews-E...](http://www.glassdoor.com/Reviews/Valve-Corporation-
Reviews-E24849.htm)

Here's some choice quotes:

"While it's true that Valve has no official job titles or promotions,
compensation varies greatly among employees and many teams have an obvious
pecking order. There is no formal management structure, but it's clear that
some people have substantially more control over project direction and the
work of others."

"Because teams are intended to be self-forming, it's rare that enough people
will want to assume risk to all collectively embark on a new project. It's too
safe and too profitable to just contribute to something that's already
successful. Even though failure is supposed to be tolerated and even
encouraged so that employees will try new ideas and experiments, there is
little evidence of this. After a few rounds of bonuses, folks learn quickly
what is rewarded, and what is not."

"The idealistic paradise is ultimately undone by a flawed review system. The
lack of managers means that a peer review system is necessary, and Valve is
very proud of theirs. But their review model is best described as a
"popularity contest masquerading as data""

"Those who get stock options do extremely well, and the others do not. It’s an
unacknowledged two-class system."

"The rational response to this uncertainty is to find a patron – somebody who
can guarantee you a good review if you do their bidding. These patrons (the
knights) guarantee themselves good reviews by doing the bidding of a higher-
level patron (a baron), and the barons pledge fealty to the board members.
This unofficial structure necessarily evolved and you opt out of it at your
peril. The irony of a hierarchical structure spontaneously forming in Gabe
Newell’s company after he has spoken so strongly about the problems of
“command-and-control type hierarchical systems” is delicious. As was noted in
“The Tyranny of Structurelessness”, “structurelessness becomes a way of
masking power”, and this masked power is more insidious than formal power."

"So, I quit in order to get better compensation, an acknowledged hierarchy,
and appreciation for my work."

"This organization has a purposely opaque, hierarchical, secretive, and very
rigid management structure."

"Some projects can go on literally for 5+ years wandering around pointlessly
without shipping, with little to no direction, and no accountability. This
company is terrible at writing and shipping large scale software"

"The random mass firings of 2013 tanked moral, and the stream of talent
leaving the company during 2014 didn't help."

"The yearly review process lacks feedback, transparency, and coverage. This
company has no formal HR, so good luck if you need to give genuine feedback
about troublesome coworkers."

"The lack of solid structure in management reduces the company to schoolyard
politics where bullies and loudmouths reign." (Title: "It's like being in high
school again")

"The culture at Valve is a bit like a cult. There's a party line and if you
veer from that, it is discouraged with one-liners rather than discussion."

"The incentives are setup so the people who place themselves around upper
management the most and are the loudest about what they're doing (that jives
with what upper management likes) will be compensated several times more than
those who don't."

~~~
epsylon
It's interesting to note that these come from various ex but also current
employees. Talks a lot about the culture over there.

> "The random mass firings of 2013 tanked moral, and the stream of talent
> leaving the company during 2014 didn't help."

I think this one is talking about the departure of Michael Abrash (and several
others) to Occulus.

~~~
bane
And pretty much all of the kinds of obvious things that you'd expect to see in
a "self-organizing" environment are called out.

\- de-facto hierarchy takes its place (at valve it seems that there are
several overlapping hierarchies, all of which are toxic)

\- highly centralized power at the top results in the de-facto highest people
jockying for favor and acting as gatekeepers

\- innovation stops

\- complex projects take forever

\- risk taking gets turned into position jostling

\- unclear structure leads to unclear reviews

\- nobody to resolve disputes

\- secrets and rumors dominate information flows

\- these problems remain unacknowledged

Look at reviews for other large flat organizations and you'll see the same
issues echoed over and over again. Anybody who's worked for a reasonably sized
"flat" org will recognize all of these problems as persistent and near
universal.

Zappos will be no different. It's just a terrible way to organize labor.

------
basseq
Thought experiment: ignore the holacracy angle and offer everyone in _any_
company 3-months severance if they quit by a certain date. What percentage
would quit?

I wouldn't be surprised if the average was 10-20% and a vast majority of these
people are taking advantage of what they see as a good deal irregardless of
their feelings on holacracy as a management style.

~~~
velodrome
_What percentage would quit?_ The ones that could land another job by the quit
date. They would essentially get a 3-month "bonus" for doing nothing. I would
say this is only possible if the these people were looking to jump ship
anyway.

~~~
Phlarp
What percentage of any competent IT team _can 't_ have a competitive offer in
writing by the end of the day?

Even if your anticipated time between jobs is 1-2 months, you can still
confidently quit by the deadline and end up with six weeks paid vacation and a
six weeks bonus.

~~~
Retric
In the US I would guess around 95%.

Extend things to 1-2 months and that probably drops to 20% or so which is very
good odds.

However, the difference between a 'competitive' offer and a 'good' one at a
company you want to work for is huge. If your spending between 1/3 and 2/3 of
your waking hours at work you need to make them count.

~~~
ghaff
Furthermore, Zappos is in Las Vegas. It wouldn't be my idea of a place to live
but some people like it and it's certainly hugely cheaper than most of
California. So someone leaving Zappos in IT/software development probably has
the option of going to work for one of the casino groups or moving.

------
sageabilly
This sounds a lot like the flat structure they have at Valve, except at Valve
they have had that since Day 1 and everyone is used to it. I can't imagine the
headaches and the absolute confusion that would result from trying to take a
traditional management tree and flatten it. It seems like by its very nature
the kinds of people you hired when you had tiered management might not be able
to easily transition to a flat management, nor would they want to. Having
worked in both environments, I can see that there's advantages and
disadvantages to each, but I personally prefer having a manager to bounce
things off of and to (for lack of a better term) shield me from any unpleasant
office politics.

I suppose I've just had good managers when I've had them, which is of course
going to make things work out well for me.

~~~
ValentineC
There are articles on how Valve has "hidden management" cliques though [1].
I'm not sure if this was ever addressed by Valve itself.

[1] [http://www.develop-online.net/news/valve-s-perfect-hiring-
hi...](http://www.develop-online.net/news/valve-s-perfect-hiring-hierarchy-
has-hidden-management-clique-like-high-school/0115316)

~~~
calinet6
It's very similar in holocracy: the people who are natural leaders will fill
the management needs of the organization; it's just more chaotic, less
predictable, and not as good. The lack of structure brings out the worst in
human behavior.

In my experience, it is a horrible system in which to exist. It's highly
ignorant of psychology and behavior theory almost intentionally, and it
creates far more drama and politics than any organizational system I've ever
seen. It's not a good thing.

~~~
jmtame
Are you speaking from experience? It seems that if you completely do away with
job titles, the politics would go away right?

~~~
detaro
Politics isn't tied to job titles. There still are people with different
amounts of influence that try to influence others for their own goals. FWIW,
Jeri Ellsworth (who was hired to do hardware stuff, didn't do well there and
was fired in the end) described office politics at Valve "like back in high
school". Not saying that it can't work, but it also is not without its flaws.

~~~
cthalupa
I wasn't aware of who Jeri Ellsworth was, but a cursory look says that she was
fired by Valve.

Were her comments before or after she was fired? I'm not sure that if it was
after, we can necessarily count on it being objective. I've heard plenty of
people make comments that aren't exactly the most accurate after they've been
fired.

~~~
dalke
[http://www.develop-online.net/news/valve-s-perfect-hiring-
hi...](http://www.develop-online.net/news/valve-s-perfect-hiring-hierarchy-
has-hidden-management-clique-like-high-school/0115316) , which is one of the
parent posts, gives some of the timing details.

Even if it were before, would you "necessarily count on it being objective"?
It seems like an impossibly high standard, given how many people make comments
that aren't exactly accurate before they've been fired.

~~~
cthalupa
> given how many people make comments that aren't exactly accurate before
> they've been fired

That's certainly fair. I'm not making a comment one way or the other - I don't
know her, I don't know the story, and I have no knowledge that leads me to
believe one way or the other.

I just naturally am a bit more skeptical of comments made about companies from
employees who were fired. People at a company can certainly make untrue
comments, and people who were fired can certainly make true ones.

It's just that, in my experience, there's a higher chance of negative bias in
someone who was let go from a company.

------
jquast
My experience working for one of "the big 3" automakers is that the very best
employees take the buyout offer, confident that they can find a better job for
better pay elsewhere. Years after the employee buyout programs began in the
auto industry, they were requesting buyout packages of their own to save the
company as a whole.

I believe this is the beginning of the "death spiral" described by PG in his
"What happened to YAHOO" essay.

~~~
venomsnake
Not that bad. Best employees not always are the best "flat structure"
employees.

And a lot of the great ones may want to hang on just for the fun of it.

------
gergles
Every time this comes up, I have one simple question that I have yet to have
answered to any degree of satisfaction.

(Someone who endorses this structure) explain to me in one sentence with fewer
than 20 words how a 'lead link' is not the same role as a 'manager'.

~~~
1123581321
A lead link can appoint people to roles, but the people have autonomy in that
role. A manager has the authority to both appoint roles and micromanage
execution.

Also, there is a parallel to lead link called rep link who is appointed by the
lead link's circle to check against bad decisions/behavior by the lead link.

~~~
keithpeter
Another way to look at 'micromanage execution' is as 'support and mentoring in
the role' based on honest feedback on perceived performance. How do people get
support for challenges?

~~~
1123581321
Providing support and feedback is a role responsibility. There can be as many
responsibilities and roles to fulfill them as the team needs. If a circle
member has a need for support and they are not getting it, it gets brought up
at a tension meeting and quickly resolved (new responsibility assigned, role
assigned, person's role changed, whatever's needed.)

Edit: I forgot to add that anyone who perceives a person is not receiving
support for their responsibility can raise a tension. It's not just the
manager's and the employee's job.

~~~
keithpeter
_" If a circle member has a need for support and they are not getting it..."_

How does circle member recognise that they need support? What indicators/who
provides feedback?

My (limited) experience as a manager was mainly about
nurture/support/challenge of colleagues. We could not allow them to fail/fail
to 'ask' for support because of implications for clients (we did not sell
people shoes).

~~~
1123581321
The tension meeting makes it hard to avoid asking for support because it's so
easy for people to bring up small problems as they're noticed and get quick
resolution. Also, responsibilities are worded as objectively and measurably as
possible (like good KPIs) to increase transparency into how people are doing
in their roles. If a circle in an org like yours needs to avoid showing
weaknesses to clients and to suss out problems before they're noticeable, they
would be able to define those as responsibilities and assign them to the right
people.

That said, I think one of the bets holocracy makes is that a group of people
with a better understanding of their responsibilities and who receive quicker,
clearer feedback will naturally be more proactive about problems. A circle is
pretty unlikely to assign themselves the kinds of restrictive processing and
reporting that are traditionally used to control interaction with clients in
organizations that don't have perfectly reliable people. But in the short
term, the control method would probably have more consistent results and that
is not acceptable to every organization.

~~~
keithpeter
_" I think one of the bets holocracy makes is that a group of people with a
better understanding of their responsibilities and who receive quicker,
clearer feedback will naturally be more proactive about problems."_

Who provides the feedback? Based on what credentials? Explain why that person
not a manager.

~~~
1123581321
Tensions, which are problems or issues or defects, are provided by anyone who
notices.

In addition to that, some roles may have responsibilities to provide
particular support and feedback. For example, in a team of developers, a
developer who has a code reviewer role may have the responsibility of
providing feedback on others' code.

Other kinds of feedback-providing responsibilities could be proofreading,
listening to sales calls, QA on manufactured items, feedback on negotiations,
etc. Anyone could be assigned these roles/responsibilities.

Traditional managers usually see these responsibilities as their job and other
employees don't easily get involved in the manager-employee feedback
relationship.

~~~
keithpeter
_" Tensions, which are problems or issues or defects, are provided by anyone
who notices."_

Interesting but 'deficit model' approach. No mentoring available for
performance that does not cause what you define to be a 'tension' but that
could be improved with little effort. I'm thinking of double-loop learning
(Argyris) as opposed to single-loop learning which I interpret as covering
proof reading/QA/Sales call monitoring.

~~~
1123581321
Yes, I haven't seen anything requiring scrutinizing assumptions as a core
role/responsibility, so it would have to be something the organization wants
to do. I do think the model empowers employees to question assumptions very
nicely once it is their responsibility, though.

------
kelukelugames
I just finished Tony's book "Delivering Happiness". I admire how positive and
optimistic he is. And I even agree with forcing self improvement on the
employees.

But he also stresses running the company like a family aka cult. One of the
advantages of moving to Vegas from SF was the employees were forced to spend
more time together. He even said Zappos is his tribe. I wonder how these
experiments would fare at a larger company.

~~~
lojack
Yeah, I read this article and for whatever reason had a sense of this being
very cult-like. The terminology being used is similar to how cults load the
language to make everyone feel like they are part the in-crowd. And, his offer
to pay severance to anyone who wanted to quit just felt like how a cult leader
will say "the door is always open if you want to leave."

Of course, he isn't actually building a cult, but I find the similarities of
indoctrination very interesting.

~~~
AceJohnny2
They are provenly-effective techniques to make a disparate group of people
work towards a common goal...

Whether the techniques and the end-goal are good or bad is left as an exercise
to history :)

------
UnoriginalGuy
Strange it isn't former CEO as you wouldn't have a CEO in a flat company.
Seems hypocritical to me, but maybe it isn't and I don't get the distinction.

~~~
encoderer
Just because you don't need management doesn't mean you don't need leadership.

~~~
kzhahou
Good managers lead.

~~~
zer0defex
Not every leader is a good manager.

------
spacehome
Offering money for employees to leave is an interesting strategy. I worry
about unintended consequences, though. One consequence is that the very best
people (who have easy times finding jobs or striking out on their own) will be
much more likely to leave than less competent people who may feel they would
have a harder time on the open job market.

~~~
bbreier
This sentiment is echoed a lot in relation to Zappos' policies, and I think it
holds water. But it crossed my mind that the existence Dunning-Kruger effect
might actually result in the inverse.

[http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect](http://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect)

------
7Figures2Commas
> Hsieh sent a nearly 5,000-word company-wide memo...

> To get their severance, employees had to be in good standing with the
> company. They were also asked to indicate by email that they had read the
> management book "Reinventing Organizations" and disagreed with its manager-
> free vision or else state that they were not reading it.

Crazy.

I wonder how many more employees would have left if Zappos was based in a
region where workers have greater mobility.

~~~
grecy
Wow, I wish my company would do something like this - middle management is
clearly slowing us down and adding very little value right now.

I can't wait to read that book.

~~~
7Figures2Commas
You're making a flawed assumption many people make: because many managers are
poor managers, management is bad.

Be careful what you wish for. A company without management is like a boat
without a captain. You might appear to be fine for some time, but eventually
you'll be hopelessly adrift at sea.

~~~
logfromblammo
The _Costa Concordia_ had a captain....

A company without management may drift around aimlessly in Brownian motion,
but at least it does not order "ahead flank" onto the rocks.

    
    
      There once was a manager,
      Who had a little curl,
      Right in the middle of her forehead.
    
      And when she was good,
      She was very, very good,
      But when she was bad, there were layoffs.

~~~
deedub
ha! perfect. It's so interesting that I assume over all that was a negative
comment from you, but so positive to me. My favorite leaders place bets like
that! I'd rather believe in a leader and be a part of a team that all believe
in the same idea so much that they accept that themselves or their
comrades(Some with families!) jobs are on the line. But this means you have to
be in a pretty transparent company.

If everyone doesn't work together, with a hard time constraint, to achieve the
shared vision they believe in it seems really hard to do amazing things at any
sort of market dominating speed.

I accept those bets happily.

------
wiremine
Previous discussion about their move to Holacracy [1]:
[https://news.ycombinator.com/item?id=9431090](https://news.ycombinator.com/item?id=9431090)

[1] [http://holacracy.org/how-it-works](http://holacracy.org/how-it-works)

Has anybody operated under Holacracy and speak to it?

~~~
EdwardDiego
We tried it, disliked it as a whole, and dropped it while retaining those
ideas we found useful.

But then, we're a small company, with an already (nearly) flat structure, and
already built around largely self-determining teams. So what Holacracy offered
above what we already had was rigid structure, and cumbersome terminology.

It also has a weird religious vibe in that the Holacracy franchise holders who
we turned to for input on our implementation of it refused to work with us
unless we adhered to the defined process 100%. No modifying it to suit our
company.

The formal governance meeting process caused a severe backlash when rigidly
adhered to because it only allowed one "reaction round"[1], so if someone
else's reaction caused a new viewpoint to arise in your mind, but you had
already spoken, too bad. Our facilitator who had attended the training rigidly
enforced this process, and several people, myself included, felt silenced.

So yeah, as we weren't a traditionally pyramid structured company to begin
with, we had very little to gain from it - we tried it because we had started
with 5 employees and no governance beyond "let's ask the boss", and we had
grown to a point where we needed to get _some_ governance in place, because
while intra-team decisions were fine and dandy, how we made decisions
affecting everyone was really unclear.

So in the end, we dropped it. We have kept some of the ideas we found useful,
for example the separation between governance and tactical meetings, and the
idea of the 'lead link' or their equivalent being opposed by the 'rep link'
equivalent, in our case, it's our proxy product owners (PPO) and their eternal
opponents are our scrum masters. It's a healthy tension between what the
business wants and what the team wants.

The other valuable thing we've kept was the objection and objection testing
process - if someone has an idea, objecting just because you don't like it is
not considered valid. You need to be able to present a coherent argument as to
how the proposal, if adopted, would harm the company. It means that the "Bah
humbug" curmudgeons can't stall innovation. Basically it boils down to "Would
it hurt us to try this?" as a test for a new idea.

So now our governance consists of a small group of 'executives' for want of a
better word, and what we call "The General Circle". The "executives" is our
boss and two 2ICs (to increase our bus factor to keep our business team happy)
one with an HR and finance focus, the other with a businss analysis / product
development focus. This group's primary focus is the relationship with our
business team, but it also handles the aspects of running a company that
require handling an employee's confidential information, like pay reviews and
HR issues.

But every other cross-company decision is made by the General Circle, a group
consisting of the PPO and scrum master from each team, plus our finance and HR
specialists. These discussions are totally open to anyone else who wants to
attend, and our financial performance is tabled as a matter of course, with
more detailed numbers and budgets available for the curious. PPOs are
theoretically appointed by the General Circle (our existing PPOs were in their
roles before this governance guff, so no new ones have needed to be appointed
yet), while Scrum Masters are selected by the team however they like. I think
all our teams rotate it every six months or so.

Oh, and we also like the election process from Holacracy - write down a
person's name on a piece of paper, with your name on it, and then in the
discussion, you say why. After everyone has explained their reasoning, people
can then change their votes if they heard a good point that persuaded them.

[1]:
[http://wiki.holacracy.org/index.php?title=Governance_Meeting...](http://wiki.holacracy.org/index.php?title=Governance_Meetings#Reactions)

------
Yizahi
If it is something like on GE airplane engine plant in Durham I can understand
this. But they do have managers, only less than usual.

If Zappos won't have managers at all then: Who will decide how much employees
will be payed, and based on what data? Who will decide exactly what customers
need and exactly what will be actually done and what won't be done or
deferred? Who will decide who will be hired who will be fired? Who will decide
in situations when one project requires something or someone from another? The
list goes on...

If someone (or multiple people) does this then he is not very different from
managers in my company and I bet they never even heard about Holacracy or
Valve, Zappos and GE experiments in management.

------
jedmeyers
Are warehouse workers considered to be 'Zappos employees'? Will they also be
managing themselves?

~~~
jccalhoun
Those are the kind of things I wonder about when I hear about zappos or valve
or other companies that claim to be without managers. Is the person who cleans
the restrooms getting to be part of this (although in the modern world the
companies probably pay another company to do their janitorial work)

~~~
enjo
That's exactly how it supposedly works at Ricardo Semler's companies. Everyone
participates in self-organization.

------
ilamont
Original source: [http://lasvegassun.com/news/2015/may/05/200-accept-
buyouts-z...](http://lasvegassun.com/news/2015/may/05/200-accept-buyouts-
zappos-after-companys-managemen/)

The _Sun_ also has an article about Hsieh's Downtown Project:
[http://lasvegassun.com/news/2015/may/05/hsieh-outs-
downtown-...](http://lasvegassun.com/news/2015/may/05/hsieh-outs-downtown-
projects-successes-talks-about/)

------
melvinmt
I thought that 'holacracy' was a made up word from Silicon Valley (the TV
show) where they have a fictional company called Hooli, but apparently it's a
real thing.

------
sytelus
Lot of people seems to be thinking that these 14% are leaving because they
miss having a manager. Employees who take buyout in this situation are usually
the ones in people manager roles. Many of them might also believe that they
probably would not do as great in "individual contributor" roles as they did
in management role. Some of these may be good managers and some may be just
great politics player. However rarely would be the individual contributor who
would want to take ultimate step of leaving because of the fear of not having
a manager. If Zappos had 1:5 managers to people ratio then 14% makes sense
using this theory.

Beside, in any large enough company, I think offer of fat severance is likely
to be taken up by 5% or more of its employees at any point in time who were
thinking about leaving anyway.

Management-less company needs to hire employees with specific cultural and
social mindset. So this needs to happen at the birth time. Trying to do this
at later date can feel like circumcision at 18.

------
ValentineC
Buffer's recently switched to self-management as well. Their early
reflections[1] on switching is a good read.

[1] [https://open.bufferapp.com/early-reflections-buffers-
switch-...](https://open.bufferapp.com/early-reflections-buffers-switch-
working-without-managers/)

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makeitsuckless
So 14% read Lord of the Flies instead and decided to get the hell of the
island.

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janesvilleseo
So just the managers and supervisors left then?

~~~
Maxels
I can't even tell if this is being spun as a positive or a negative. That is a
radical change and if anything it seems like a low number of people to take
the severance.

Whether the new policy will work out in the long term remains to be seen. I
believe I read that Google tried a flat hierarchy for a few months and found
that it did not work quite how they wanted.

Also, what will Tony Hsieh be doing in the new managerless structure?

~~~
taylorwc
Google did indeed try it[0].

"In 2002 they experimented with a completely flat organization, eliminating
engineering managers in an effort to break down barriers to rapid idea
development and to replicate the collegial environment they’d enjoyed in
graduate school. That experiment lasted only a few months: They relented when
too many people went directly to Page with questions about expense reports,
interpersonal conflicts, and other nitty-gritty issues."

[0] [https://hbr.org/2013/12/how-google-sold-its-engineers-on-
man...](https://hbr.org/2013/12/how-google-sold-its-engineers-on-management)

------
mgkimsal
Seems a bit low - I'm thinking more people would have taken the buyout but
aren't very confident in the job market right now.

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cpr
Does anyone know how this relates to Ricardo Semler's efforts with Semco?

([http://en.wikipedia.org/wiki/Ricardo_Semler](http://en.wikipedia.org/wiki/Ricardo_Semler))

~~~
jasonmp85
From what I've read, Semco employees help set their own compensation and
hours, something that will not be happening at Zappos (at least not in such a
direct fashion). Semco is a workplace democracy, not a holacracy. It isn't a
worker cooperative (like certain MONDRAGON group members), so there isn't
shared ownership, so it has that in common with Zappos.

In a nutshell, the holacracy system will have "circles" of individuals which
act as semi-autonomous groups to achieve results. Each circle might function
democratically. Semco is a more traditional company with a workplace democracy
overlay on top. This piece goes into more detail:
[http://jonathangifford.com/maverick-ricardo-semler-10-key-
de...](http://jonathangifford.com/maverick-ricardo-semler-10-key-democratic-
changes-semco/)

EDIT: And oh yeah, both Zappos and Semco are privately held. The linked
article discusses this in the comments, but in recent years we've had more
illustrative examples of how profit incentive sucks character and morals from
a company, e.g. Cook shouting down an investor questioning the need for green
initiatives, or Schultz telling investors they could sell if they don't like
his support for same-sex relationships. These two held on, but countless
others surely sacrificed their values at the altar of shareholder value. In
short, I'm not holding my breath that we'll see workplace democracy or
holacracy at a public company anytime soon.

~~~
digikata
Wikipedia has Zappos down as being acquired by Amazon in 2009

~~~
kelukelugames
Yes, Amazon owns Zappos. In Tony's book, he explains that legally Zappos still
gets to what Zappos wants.

------
sixQuarks
I applaud him for experimenting and trying unconventional ways of doing
business.

------
dsr_
I look forward to seeing what happens. It's perfectly natural for people to
feel apprehension about a major change like this, and offering 3 months salary
as an incentive is quite generous.

My primary concern would be about the scale of the company: self-organizing
over a thousand people is going to have some rough patches.

------
harrystone
Absolutely the nicest way to say "join my cult or get out" that I've ever
heard of.

------
varunjuice
Given 3-5 year tenure of a typical employee at a typical tech company, this is
less than expected attrition at a company.

It is not inconceivable that anyone who wanted to leave the company between
now and the end of the year took this.

------
zxcvvcxz
Say what you want about the particular policy, but I'm glad Tony has the
opportunity and authority to implement it. "Management by committee" is the
best way of reverting to a non-spectacular mean. It's much better to have
companies that have variance, i.e. larger organizations actually define a
direction and do it, thereby taking risk.

Plus as an employee I'd be more inspired working with an actual leader, rather
than a faceless bureaucracy. We got big co's for that.

------
cateye
Exactly the same things happen in very traditional companies but they give it
an other name. People are becoming "redundant" because of organizational
changes. It can be operational changes like outsourcing a department or
strategically like changing the span of control.

It is weird that Zappos create a hype by suggesting that they are "radically
inventing" something. That's really bullshit.

I don't understand people that are really enthusiastic about Zappos.

------
dmgbrn
I'm curious as to why? It sounds like an exciting experiment!

Incidentally, when the startup I work for reached a size where most companies
would have started hiring managers, we reached a consensus as a company to
give the holocracy thing a try. It's been working very well for us, but we're
still < 100 people, so we'll see if it sticks as we grow. Me, I might bail if
we turn into a big boring manager having company.

------
jakejake
"I don't clean toilets anymore, I'm in charge of strategic marketing now. I'll
be taking this office"

On the one hand, I can see this being the ultimate meritocracy. Perhaps the
person cleaning toilets is actually a marketing genius? On the other hand, it
could be like an episode of Hell's Kitchen where nobody is in charge and the
whole operation goes to shit.

------
netcan
I don’t have the tiniest hair of a dog in this race. But, I like the idea of a
company trying radical things. It’s very easy to declare radical change. A 14%
voluntary acceptance of a severance package (I would be more impressed if it
was 6 months) is a sign of actually going for radical, I think.

A company of that size is an interesting proving ground and if this succeeds,
good.

------
tempestn
Has anyone read the book they reference, and do you want to give us a
synopsis? I'm hoping it answers some of the practical questions surrounding
how this Holacracy would actually work.

[http://www.reinventingorganizations.com/](http://www.reinventingorganizations.com/)

------
fooey
well, Zappos had just been on the list of places I was considering applying to

glad this happened first

------
boulos
I wonder how many of these 210 people were managers that were still there.
"Getting rid of managerial roles" would certainly imply that any that were
around might be expected to leave the company.

------
fecklessyouth
>John Bunch, technical adviser at Zappos and leader of the Holacracy
transition

...right

~~~
smacktoward
A.K.A. "Designated fall guy when the whole thing goes kablooey and the CEO
needs someone to pin the blame on."

------
drivingmenuts
I just hope there's a budding writer at Zappo's who can fill in the details on
day to day life in a holacracy. I keep trying to wrap my head around it and
coming up blank.

~~~
DanBC
I woder if it will all end up like "Lord of the Flies"?

------
stove
I wonder what percentage of the 14% are existing managers that perhaps can't
or don't want to move on to different roles?

------
mathattack
I love the idea, but can a company that big really survive without management?
Didn't Google backtrack on a similar idea?

~~~
jevanish
Yes. Google tried not having managers and A/B tested against a team that had
managers. Manager teams outperformed. Some of that is in this video
[http://youtu.be/l6ISTjupi5g](http://youtu.be/l6ISTjupi5g)

------
jmount
Isn't this just what companies like to call "a voluntary layoff?"

------
n_time
so was the ladder to power and ownership at zappos just knocked down?

is this just a bigger gap between the real power holders and "the rest"?

------
jonsterling
Called it.

------
serve_yay
I stopped buying shoes from Zappos because I don't like their selection of
shoes any longer. Not because I thought their management structure needed a
drastic, messy public overhaul. I dunno, it just seems silly and fanciful to
me but then again I'm not Tony Hsieh.

~~~
underyx
Their management structure could be the very reason that their selection
doesn't fit your needs anymore.

