Holocracy at Zappos

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Recommendation

• This case is about online retailer Zappos (a part of Amazon).

• The company was highly popular for the culture of service it had promoted since
its inception.
• Its success was attributed to its unique culture, where the employees were given
complete freedom to fulfill the needs of the customers.
• Its culture helped Zappos attract a lot of talented people.
• In 2013, the CEO of Zappos, Tony Hsieh, announced that he was looking at
adopting ‘Holocracy’ across the organization.
• It aimed at replacing the conventional structure of command and control in the
organization with a self governing process by distributing power.
COMPANIES VALUE
• Culture of service: 3
• Zappos was known for the ‘insane’ and ‘fanatical’ lengths it went to please its
customers.
• Every employee was expected to deliver ‘WOW’ service
• Company believed that such a service would result in word of mouth publicity
that would reach everyone associated with the business
• Call centers work on “personal emotional connections” for each caller rather
than on scripts
• Zappos has transparent and open door services for anyone (16 tours/week)

ISSUES ZAPPOS FACED

• Low percentage of people accepted Tony’s offer i.e. 14%
• Out of this 14%, 20% is of tech department
• Which leads to the disruption in the schedule of project undertaken “Supecloud”
 PROS AND CONS OF HALOCRACY 4
PROS CONS

More freedom to choose desired role and which has Difficult for employees to relate with their work
both accountability and purpose without job titles

More accountability will increase productivity and Rather than having a big position the employee the
competitiveness employees took on a large number of small positions
in a variety of teams, where they were required to
keep track of countless objectives, tasks and meetings

Holacracy makes it easy to find and understand In most cases an increase in responsibility would lead
resources which are needed to succeed as individuals to an increase in wages. When using Holacracy things
and team members become a little more unclear on how much an
employee should be compensated for their work.

Removing job titles will reduce clashes between Increased level of accountability might not be desired
employees which will further reduce inefficiencies by all the employees

More engagement of employees which increases

levels of job satisfaction
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According to us Halocracy will work for Zappos
• Zappos can carry on with its philosophy of Holocracy.
• May be it is difficult to implement in short run but in the long run it will be
feasible
• For better understanding of employees, Tony should communicate the
advantage and scope of development in this pattern to employees so that
they do not leave the organisation.
• Incentives should be given to employees for accepting this change so that they
remain in company and complete the project
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Thank you