Zappos has quietly backed away from holacracy

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Yesterday Aimee Groth wrote a very interesting article on QuartzAtWork about the organizational evolution Zappos has been on for the last years, with the telling title: "Zappos has quietly backed away from holacracy". You can read the article by following this link:

She writes: "In the last few years, Zappos has been quietly moving away from holacracy. It has done away with its at-times rigidly (and ironically) bureaucratic meetings and brought back managers, while retaining its circular hierarchy, a key artifact of holacracy."

And "The solution? A marketplace system where teams operate like small businesses and manage their own profit-and-loss statements, rather than focusing on the scope of their holacratic authority to manage the company’s full P&L."

Aimee's observations are very interesting and, to be honest, they don't surprise me much. When we visited Zappos some years ago (when they were rolling out holacracy) several employees told us already that they didn't like holacracy at all. They told us that they were just waiting till Tony Hsieh would move Zappos to the next phase of their experimentation. And that's actually what happened!

To me it seems that Zappos is moving towards an internal marketplace that seems to be a mix of the organizational structures of Haier and WL Gore of which I recently wrote a long blog post:

Aimee told us that Rob Solomon is working alongside John Bunch (Zappos Executive) to roll out this new market-based organizational model at Zappos at the moment. You can read more about Rob Solomon in this excellent piece:

What do you think? Is this any surprising? Are they moving into the right direction this time?

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