Why isn't Holacracy working at Zappos?

[kelstarrising]

The company culture needs to ready, allowing them to embrace something like Holacracy, recent article claims that 14% of the staff left after introducing Holacracy.

There are a lot of misconceptions about Holacracy at Zappos. I would encourage you to not stop at one article or commenter here trying to shoot holes in Holacracy. I'm not saying it was embraced by everyone at Zappos or even the David Allen Company, but at least with Zappos, some staff left around the time Holacracy was introduced because of a volunteer severance program designed to weed out employees who weren't committed to staying.

 

[mcogilvie]

People often don't see the difference between MBWA and micromanagement.
I totally agree that the best results are achieved by managers who care about these results. Not about their power or position but about the results.

The issue of micromanagement didn't even occur to me in this context. Although I do see micromanagement occasionally at my university, people are self-motivated and responsible. If they know something needs to be done and they know how to do it, it will get done. It's a luxury, I know.

 

[TesTeq]

I'm not saying it was embraced by everyone at Zappos or even the David Allen Company, but at least with Zappos, some staff left around the time Holacracy was introduced because of a volunteer severance program designed to weed out employees who weren't committed to staying.

Holacracy is a very interesting concept but - as I understand - it requires a lot of courage to get rid of the employees who don't buy such revolution.
I wonder how Holacracy self organization works in places where there is a lot of "unpleasant" work to do.

 

[mcogilvie]

I like the ADKAR approach towards change management link below

https://www.prosci.com/adkar/adkar-model

ADKAR looks ok, although like a lot of management stuff, it seems boring to read at best. You do get the feeling that at the end of the process, you will be agreeing that you need to be ground into fertilizer for the common good. That is the problem with a lot of this kind of stuff. Managers try to hide why things are happening (and sometimes even what is happening), and people either figure it out quickly or come up with something worse. Integrity isn't something you get from a one-day seminar, and process is often used as a substitute.

 

[bcmyers2112]

There are a lot of misconceptions about Holacracy at Zappos. I would encourage you to not stop at one article or commenter here trying to shoot holes in Holacracy. I'm not saying it was embraced by everyone at Zappos or even the David Allen Company, but at least with Zappos, some staff left around the time Holacracy was introduced because of a volunteer severance program designed to weed out employees who weren't committed to staying.

Kelly, I think a lot of people are naturally mistrustful of management philosophies/methodologies because, like me, they've suffered through bungled roll-outs of whatever was the latest managerial fad at the time. Although, again, I think a lot of the problems I've lived through have been attributable to incompetent leadership, a culture that wasn't ready for change, or a combination of the two.

For example, I was working at a radio station some 25 years ago when the organization decided to implement TQM. At the time I was a part-time reporter, announcer and master control operator. I remember being subjected to endless meetings about "benchmarking" initiatives and discussions about "KRAs" and lengthy efforts to draft a mission statement... all the while, our radio station continued to do suicidal things like air the wrong programs because someone put the wrong satellite channel in the feed list for a particular time slot. Or like continuing to use worn-out tape reels (this was back when tape was still a thing, folks) that distorted the sound to the point of unintelligbility no matter how often we begged people to get new reels, forcing master control operators on the fly to decide between continuing to air a program that was literally distorted to the point of being unintelligible or finding a substitute program even though we weren't supposed to be making such decisions. The very things that TQM was designed to correct weren't corrected because there is no strategy, philosophy, approach or methodology that can't be misapplied by those who overestimate their own competence.

Ultimately I think it's because leadership is a misunderstood skill that isn't properly cultivated in those with leadership positions. But that's outside of the scope of this discussion -- or at least beyond what I have the time or inclination to discuss. But I think it helps explain why so many of people, myself included, are suspicious of things like Holacracy.

The reason why I'm keeping an open mind is twofold. First it's because, as I said, I used to be a journalist and I know from experience that journalists are under pressure to find stories that are big, or at least interesting. And while I've rarely encountered journalists who intentionally distort facts to advance their careers, I've known many, myself included, who have unconsciously succumbed to the temptation to sensationalize. Think about it this way: the idea that Holacracy at Zappos has been a disaster is a far sexier story than one in which Zappos is trying a major transformation and like any such effort, it's run into hiccups and the jury's still out. I'm not saying one or the other is true -- I'm just trying to point out the realities that journalists face, and why we should be critical consumers of media, even respectable outlets.

The second reason I keep an open mind is because of the number of times I've discussed GTD in online forums where people have declared the methodology to be bunk because: you can only have one action per project; you must link actions to projects; you must never link actions to projects; it's only for managers because it's all about delegation; it's not for demanding tasks because next actions can only be quick; it requires you to stick your left foot in a bucket of oysters at 5 am every Tuesday, face east, and sing "Alleluia" at the top of your lungs; and other demonstrably untrue statements that people refuse to let go of because, hey, why believe something true that requires you to change your mind and perhaps learn something?

I'm not saying Holacracy is good or bad -- just that I think GTD gets an unjustifiably bad rap in some quarters, and for that and other reasons I've learned to be skeptical.

 

[John Forrister]

Would you be willing to comment about how well Holacracy works at David Allen Co.? Do you have an opinion about how well it works elsewhere that you'd be willing to share ...?

Sure! Holacracy started making a positive difference for us right away. We had a steep learning curve at first, because it does require changing some behaviors. (So does GTD—ask anyone who has gone from a comfort zone of inbox 5,000 to habitually driving the inbox to 0.) In 2015 we identified a couple of areas to refine, and carried out projects to successfully handle that.

I attended a small conference at the Downtown Project in Las Vegas in 2014, attended by several companies at various stages of Holacracy installation, including Zappos. Also in attendance was a representative from a non-Holacracy but self-managing company called Morningstar, the largest tomato processor in the world. (If anyone wants to widen their lens on self-managing companies beyond Holacracy, have a look at this on Morningstar. https://hbr.org/2011/12/first-lets-fire-all-the-managers This was published in 2011, almost a full year after David Allen Company installed Holacracy as its operating system.) And Harvard Business School's Ethan Bernstein led challenging case study discussions on a couple of companies. It was very inspiring, while quite realistic about the issues facing any organization switching to new forms of management. No time for slot machines.

While some in attendance have thrived with Holacracy, some have since opted out of Holacracy. You can read up on Medium and Downtown Project and find plenty of ammunition to shoot down Holacracy and any other self-management approach besides traditional top-down hierarchy, even if this thread's slant on Zappos hasn't convinced you that Holacracy is a huge mistake.

But... inquiring minds want to know. Since you asked for my opinion, I'd say it's smart to start with discernment about sources.

 

[John Forrister]

That said, David Allen Company was perhaps uniquely positioned to adopt the Holacracy operating system. We were already trained to think in terms of outcomes and actions, and had the GTD methodology to track our individual commitments which happened to align with the larger organizational purpose.

It may be that there are two types of people who are most likely to fight Holacracy or other forms of self-organization. Top-level managers who want to retain rather than distribute their authority, and low-level employees who don't want to take responsibility for their impact on the organization.

In other words, those who are getting a payoff from traditional management may be the most vociferous critics of alternatives, based on their limited study and little or no experience.

Coincidentally, those who are getting a payoff from stress and overwhelm don't want to recognize that a Mind Sweep and processing their inbox to zero to generate a current inventory of commitments is useful, or even possible.

 

[TesTeq]

It may be that there are two types of people who are most likely to fight Holacracy or other forms of self-organization. Top-level managers who want to retain rather than distribute their authority, and low-level employees who don't want to take responsibility for their impact on the organization.

So I suppose you would assign Steve Jobs to the "top-level managers who want to retain rather than distribute their authority" group. And Bill Gates.
No Holacracy would transform Apple 1997-->2011 and no Holacracy would build Microsoft Windows empire.
And no Holacracy would save Steve Ballmer's Microsoft and no Holacracy will save Tim Cook's Apple.
Why? Because extraordinary organizations need the Pragmatic Visionary type leaders. Without them they are just "yet another" hardware manufacturers, software developers or consulting services providers.

 

[TesTeq]

The second reason I keep an open mind is because of the number of times I've discussed GTD in online forums where people have declared the methodology to be bunk because: you can only have one action per project; you must link actions to projects; you must never link actions to projects; it's only for managers because it's all about delegation; it's not for demanding tasks because next actions can only be quick; it requires you to stick your left foot in a bucket of oysters at 5 am every Tuesday, face east, and sing "Alleluia" at the top of your lungs; and other demonstrably untrue statements that people refuse to let go of because, hey, why believe something true that requires you to change your mind and perhaps learn something?

I'm not saying Holacracy is good or bad -- just that I think GTD gets an unjustifiably bad rap in some quarters, and for that and other reasons I've learned to be skeptical.

I like these excuses why GTD does not work. ;-)
But there is a deeper problem: people don't find excuses why TV set does not work. They actively try to fix it. But people complain about GTD as early as possible. Why? Because GTD requires consistent effort.
I see the same problem with Holacracy. There are more people that like to be told what to do than people who want to take all the responsibility. So Holacracy is not compatible with the human nature "follow the path of the least resistance". Like GTD.

 

[bcmyers2112]

@John Forrister: Thanks for giving some insight into Holacracy at DAC. Before this thread I knew next to nothing about Holacracy. Now I understand it a bit better and have added "learn more about Holacracy" to my someday/maybe list.

 

[kelstarrising]

@John Forrister: Thanks for giving some insight into Holacracy at DAC. Before this thread I knew next to nothing about Holacracy. Now I understand it a bit better and have added "learn more about Holacracy" to my someday/maybe list.

By the way, I was one of the biggest protesters of Holacracy when it was brought into DAC. I nearly quit the week we had our roll-out training (seriously!). I found it cold, impersonal, and disruptive to everything we had built. What changed my mind was seeing it in practice and the potential for distributing leadership and making decisions in a healthier and more objective way. Brian Robertson even shares my story in his practitioner trainings, saying I was one of the biggest objectors he had ever encountered and how remarkable it was that I shifted to becoming one of the biggest champions of it within DAC.