The online shoe retailer Zappos has always set out to be an innovative employer as well as a successful business. Along with quality benefits and perks, CEO Tony Hsieh grants his staff the freedom to do their jobs according to their terms. In fact, recently the Zappos boss put a radical new corporate structure into place that eliminates all traditional managers or job titles. Instead of a traditional hierarchy, employees now work in “circles” that encourage more collaboration and agility.
While many of the retailer’s staffers transitioned smoothly into the new “Holacracy” system, others took advantage of an offer from Hsieh to make a clean exit. The CEO allowed anyone who couldn’t adapt to the loose structure to leave with at least three months’ severance, a proposition that some 210 employees accepted. The number of departures amounts to 14 percent of Zappos’ staff, which is no small amount considering how unaccustomed the company is to turnover. After all, the business media consistently ranks Zappos among the best places to work. The fact that so many people left at once could be a sign that the company’s culture has been damaged by this latest structural experiment.
Then again, it’s likely that many didn’t want to pass up an opportunity to collect three months’ salary for simply walking out the door. What’s more, the improving job market gives these former Zappos staffers a stronger safety net than they would have enjoyed even a year ago. “Some Zapponians took it because they are not in line with the vision of the company, others took it to pursue other passions including starting businesses,” said Zappos technical advisor John Bunch. “Ultimately, however many people took the offer is the right number because they are doing what is best for them and for Zappos.” The company hopes these dedicated staffers will thrive in their new environment. If they do, similarly manager-less systems could start popping up in other parts of business.
- Does Zappos’ “Holacracy” idea seem like a good plan for the company?
- What type of decision-making will likely be used within Zappos’ new structure?