Online Retailer Tosses Out Bosses in Favor of ‘Holacracy’

Will ditching the traditional boss-employee management system work? Some workers are not sticking around to find out.

Many workers dream of getting rid of their boss (have you seen the “Horrible Bosses” movies?). At Zappos, workers don’t have to imagine a world without bosses because they no longer have any.

That’s right. Zappos has no bosses. The online retailer has ditched the traditional boss-employee management style and embraced a radically different way to run a business known as “Holacracy.”

According to Holacracy.org, it’s essentially a self-management system “that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micromanaging boss.”

Its promoters say the new system’s “transparent rules replace office politics” and “rapid iterations replace big re-orgs.”

Although that system may sound enticing at least in theory, not everyone at Zappos is happy with the change. Nearly 14 percent, or 210 of Zappos 1,500 employees, have recently opted to leave the retailer rather than get on board with Holacracy, which was implemented earlier this year, The Wall Street Journal reports.

“Employees say the new system has been confusing and time-consuming, especially at first, sometimes requiring five extra hours of meetings a week as workers unshackled from their former bosses organize themselves into “circles” and learn the vocabulary of Holacracy,” the WSJ said.

The workers who recently resigned from Zappos were offered a minimum of three months’ severance pay.

Zappos is also offering about 9 percent of its employees, many of them tech workers, a lucrative “SuperCloud offer” to leave the company, Quartz reports. This is to “help the company complete its migration to parent company Amazon’s technical infrastructure, giving [employees] until the end of the year to make their decision with the promise of a bigger payout,” Quart said.

At a recent company meeting, Zappos CEO Tony Hsieh addressed the organization’s shift to Holacracy.

“It seems crazy to the rest of the world,” he said, alluding to his goal of self-organization for Zappos. “The typical story of corporate America is that you are a different person on the weekends and then come into the office. At Zappos, we want people to bring their full self to the office.”

It’s not yet clear how the retailer plans to compensate its workers under its new organizational structure. According to Quartz, Zappos employees will retain their current salaries for now, although “it’s unclear how this will work out for former managers, who ostensibly need to find new roles to fill by the end of the year.”

Zappos may implement a “badging” system where workers can earn badges based on their particular skills, instead of earning a salary for filling a titled position, since most job titles were also thrown out when bosses were banished.

What do you think about Zappos’ new no-boss business strategy? Share your comments below.

Stacy Johnson

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