Zappos has been in the news a lot lately as a result of 210 of their employees opting to quit rather than work in the company’s new “Holacracy” or bossless workforce. Does a leaderless workforce make sense from an organizational development perspective? Can Zappos, or anyone, pull it off?
I think the odds are against them.
First, for those of you who missed it, Zappos announced in late 2013 that they were making a shift that would eliminate all titles and managers from the company and move to what they call a holacratic structure. For more on the Zappos announcement and what holacracy is all about, you can read this Forbes article.
Zappos gave people until to the end of March of this year to either get onboard with this new management structure or take a three-month severance package and leave. Surprisingly to many, 210 employees, or 14% of their workforce, took the severance rather than stay and try to make it work in the new regime.
It would be really interesting to know which employees took the package. Was it their middle management? It’s unlikely to be senior leadership. Maybe it was their up-and-coming high-potentials who suddenly saw their future growth opportunities vanish along with all those management titles. Unfortunately, I haven’t seen anything providing a breakdown of who left.
Zappos isn’t the first company to go this route. Some commonly cited examples are W.L. Gore & Associates Inc. (the makers of Gore-Tex) and The Morning Star Co. Holacracies are more typically seen in smaller organizations, though, and many experts feel they aren’t scalable. Jan Klein of the MIT Sloan School of Management provides some examples and insights into why holacracies fail in this article.
From a leadership perspective, this concept seems dubious to me. Organizations need leaders and leadership. That’s been proven again and again. And there are natural leaders within many organizations who will rise to the top. What happens to these people at Zappos?
Organizations need these leaders and these leaders and potential leaders need organizations that will support them and recognize them. Think for a minute about those high-potentials we all want to bring into our organizations. We know that high-potentials have a certain psychological profile. One of the aspects of that profile is their need to assume responsibility and see growth potential. I’m not convinced a holacratic organization can offer that, and I don’t think someone with that profile will see the appeal of a flat, bossless company.
What about you? Do you think Zappos can make this work? Do you think a bossless workforce can succeed in a large company? I’d love to hear your thoughts.