The thing that strikes me about it is how this article makes Zappos sound so much like Scientology or other cults. Maybe it's just because I have a paranoid, skeptical, anti-ideological streak, but the similarities are striking to me. Let me count the ways:
You have the eccentric supreme leader, who claims to be just another equal among the group, yet issues edicts that the whole organization must follow. Scientology has Hubbard, Zappos has Hsieh.
You have the doctrine based on moving the organization and individuals towards a pure state, untainted by the way the rest of the world operates. Scientology has 'clear', Zappos has 'teal' and 'self-management'.
You have the lingo that only people within the fold understand. Everything that everyone does is couched in terms that are invented by the group, or especially words that are redefined with specific meaning, creating a kind of dialect for group members that diverges from the mainstream. This makes it difficult for them to communicate with outsiders or leave the group, and also makes it difficult for outsiders to investigate and understand the group. Scientology has words like 'tones' and 'ethics' and 'holidays', Zappos has 'circles' and 'lead links' and 'roles' and 'distractions'.
You have people who don't fit (i.e, accept and submit to the doctrine and leadership) be driven out. If you're one of these people, it's treated as a personal failing on your part: you haven't haven't been willing to accept the doctrine, which is taken to be self-evidently correct and ideal, and cannot be allowed to taint the group. Scientology has its 'suppressives', and Zappos has 'the Beach'.
Are there more? Maybe. Am I just imagining them, and it's really no stranger than any other company that's a bit insular... like Apple for example? I don't know. But reading this article definitely tripped my 'cult' alarm.
Rather, what strikes me is that for all the excitement over the buyout, Zappo's seems to have survived with management-by-holacracy for surprisingly long time with seemingly good results. One would have thought, based on the conventional wisdom at the time, that without a sclerotic managerial bureaucracy the organization would be completely unable to coordinate and manage itself. This does not seem to be the case.
Holacracy a cult? Why not traditional management a cult? The difference being simply that traditional management is broadly accepted as "normal" by society at large.
Ostracism via "the Beach" is just a different kind of social power than the traditional hierachical institutions, with different tradeoffs. Generally you think of these kind of power-diffuse societies as unable to scale, but Zappos has 1500 employees.
I don't know if it's a cult. That's why I hedged my whole comment with "maybe I'm imagining this but...".
It's too early to say whether it works. There's a saying I'm trying to remember, something about 'you can only see the rocks at low tide'. Almost anything will look wonderful in good times, and it's easy to attribute that success to whatever you're doing at the time. It's not until bad times that its flaws become visible.
Zappos was built to its current state on a hierarchical structure. They haven't yet had its decentralized structure tested in any significant way. If Zappos hits a slump in sales for whatever reason, how will the organization respond? Will Holacracy survive a crisis like that? That's where you'll really see if it's a useful system to govern a company.
Yep. But hierarchical bureaucracies are also rife with inefficiency and dysfunction. Coordinating the activity of groups of human beings at scale is just a hard problem. It could be that holacracy is effectively not much different than hierarchical bureaucracy, but with different tradeoffs and personalities. Then Zappos has to bear the weight of defending holacracy when it is not demonstrably the case that a traditional management structure would necessarily have done better.
Or it could be that it is significantly worse, and that the inertia of the brand keeps the boat moving (albeit slowing?). A shift to a newer model could be seen as a way to reduce headcount and contain costs.
> Holacracy a cult? Why not traditional management a cult? The difference being simply that traditional management is broadly accepted as "normal" by society at large.
You can't define 'cult' without an element of normative determination. It's right there in the first sentence on the Wiki page for cult, and in every dictionary definition I could find.
Also, the term does not necessarily carry a derogatory tone. I've seen many small spiritual groups self-describe as cults.
Traditional management structures are shit, but at least you know how they work, and there are lots of well-worn coping methods for dealing with them. The problem with crazy new management styles is that they often hide their true nature underneath a veneer of newness (for example, "flat"), and that true nature can sometimes be completely different from the ostensible version.
True. In practice, power in Zappos and holacracy is probably much more centralized, more arbitrary and less transparent than that of a hierarchical organization because there is no explicit structure. There is nothing protecting the lower rung people from the whims of those in the top.
> Holacracy a cult? Why not traditional management a cult? The difference being simply that traditional management is broadly accepted as "normal" by society at large.
Well, the only difference between a cult and a religion is age. And possibly whether they tell you to see a doctor if you get sick, not sure what the parallel to that would be.
You know, I honestly got that vibe about Hsieh companies when I tried reading his book Delivering Happiness. There was this cultish feel that your life had to be centered around your colleagues. Hang out with them during work, hang out with them out of work, that's how you make a happy family with team chemistry. I couldn't imagine being happy in a company with that culture. I have a lot of friends and interests outside of work too.
The most interesting question was when they upped and moved the company to Vegas and you really had to make a life decision about whether to go, knowing full well that your support group would be your colleagues, and you would be also their support group. Like triple the isolation and dependence? But it was for business reasons! Just coincidentally had very demanding cultural requirements as consequences.
Yeah it has that vibe. But I think that is kind of part and parcel of what's necessary to make change and have buy in from the group you're trying to coöpt into your vision.
I think there are lots of industries where holocracy could be just as good as the top down model is. For example, retail, hotel work, taxi companies, etc. Anywhere where mom and pops could have a business... That is wherever your average non MBA graduate can have a modicum of success you could probably create a workforce of equally qualified workers who could self assemble into workgroups according to their dispositions and aptitude. It's not far off from how the workgroups were supposed to work in practice in communist doctrine. Of course in their practice 5 year plans meant top down control.
Importantly you don't need highly paid managers to manage low level operations. Operations which don't require a whole lot of external supervision if you indoctrinate the workers to self regulate.
Its a good test really. If you find yourself using jargon for ordinary things that could just as easily be said in plain words, its a warning sign. This is doubly true if it seems like the reason for this is obfuscation or to make it sound less troubling than it would otherwise to an "outsider".
Now if you get to the point where ordinary words are being redefined to mean something complete different (or even opposite), you are already late for the door. Run.
How is the pay at Zappos? How do you ever get promoted and/or get a raise? My cynical self suspects that this is the dream of company owners. The owner himself is safe in his position and the little guys have to constantly fight for relevance until they have been used up.
It seems it's probably a good workplace to start your career but I doubt it works for a long career.
You only missed the part where members are isolated from friends, family and others who might point out that "this isn't really a good thing." What you listed is necessary infrastructure, but the isolation is the key to making any cult work, and it's why deprogramming is a thing, or at least a meme.
They uprooted everyone and moved to Vegas, leaving behind friends and family, and ensuring everyone who moved only knew Zappos people when they landed there. Maybe it's not a boat in the ocean level of isolation, but it is isolation. One startup founder who moved his startup along with Zappos (it was a multi-startup move, kinda like a corporate migration) eventually committed suicide...
>One startup founder who moved his startup along with Zappos (it was a multi-startup move, kinda like a corporate migration) eventually committed suicide...
As I read this, the sibling comment immediately under yours[1] is talking about the Zappos move to Vegas, and how it resulted in your colleagues being your support group, and you theirs...
True. It especially comes across to me like that because it all seems so focused on itself. As an adolescent who cannot think about anything except for his own feelings about love, betrayal, depression, etc.
I think however that the general tendency to play with power is a worthwhile one. If people have to play games with each other, they probably also become better in games with the outside world. It is important that they don't develop an idiom only understood my themselves however. A hierarchical structure might also be good training material.
Then, if friendly interaction with customers and getting new customers seeps into the entire organization through nonhierarchical means, this would be a great win. I can imagine that a dynamic structure that reflects the company goals directly, will be really good!
It's smart from a culture management perspective though. Creepy (intimidating?), possibly unethical at times, but effective... Cult structure as a filter for all but the ultra-loyal sure seems wrong from the outside, but internally it fosters unity and rock-solid hierarchies under a guise of self-actualization. Isn't that what every human organization tries to pull off?
You have the eccentric supreme leader, who claims to be just another equal among the group, yet issues edicts that the whole organization must follow. Scientology has Hubbard, Zappos has Hsieh.
You have the doctrine based on moving the organization and individuals towards a pure state, untainted by the way the rest of the world operates. Scientology has 'clear', Zappos has 'teal' and 'self-management'.
You have the lingo that only people within the fold understand. Everything that everyone does is couched in terms that are invented by the group, or especially words that are redefined with specific meaning, creating a kind of dialect for group members that diverges from the mainstream. This makes it difficult for them to communicate with outsiders or leave the group, and also makes it difficult for outsiders to investigate and understand the group. Scientology has words like 'tones' and 'ethics' and 'holidays', Zappos has 'circles' and 'lead links' and 'roles' and 'distractions'.
You have people who don't fit (i.e, accept and submit to the doctrine and leadership) be driven out. If you're one of these people, it's treated as a personal failing on your part: you haven't haven't been willing to accept the doctrine, which is taken to be self-evidently correct and ideal, and cannot be allowed to taint the group. Scientology has its 'suppressives', and Zappos has 'the Beach'.
Are there more? Maybe. Am I just imagining them, and it's really no stranger than any other company that's a bit insular... like Apple for example? I don't know. But reading this article definitely tripped my 'cult' alarm.