Tony Hsieh, CEO of ZapposIf you’ve ever read our blog before you’ll know we have a big ‘ole biz-crush on Zappos CEO, Tony Hsieh.


Hsieh’s commitment to people and the unique Zappos culture has led to huge success for the online retailer. He’s renowned for being a champion of employee empowerment and it’s one of the many reasons why we enjoy his fresh takes on leadership. However, Hsieh seems to be taking it to the next level this year.. and we’re undecided on whether it’s clever or naive.


In a continued effort to evade corporate stagnation, Hsieh revealed that by the end of 2014 Zappos will replace traditional work hierarchies with Holocracy. Holocracy ditches job titles and managerial positions in favour of “circles”. Zappos’ 1,500 employees will be divided up into about 400 circles, with different employees belonging to numerous circles.


It’s intended as a self-regulating system that focuses on the work that needs to be done and gives voice to more employees. But Holocracy isn’t necessarily new and past implementations have produced mixed results.


This article from Business Insider relates Holocracy to the mid-1980s fad of self-directed teams:

The concept of self-directed work teams (alternatively known as “self-management” and “autonomous work teams”) was popular in the 1980s, according to Jan Klein, a senior lecturer at the MIT Sloan School of Management who spent years researching the topic. Back then, it was mainly applied to factory work.


“There was a belief that if you empowered the workforce they’d be more productive, and you’d have creativity and all of that,” Klein said. “So in many factories they went in and eliminated first-line supervisors.”


It wasn’t just tiny factories that tried that. Big-name companies like Shell Oil and Cummins also jumped on the band wagon. But of all the places that implemented the system, Klein says she only knows of one that made it last long term. Almost everywhere else, she said, the effort started to flounder after just six months. And the bigger the company was, the quicker it tended to run into problems.


The fundamental issue? People just didn’t self-regulate as well as the companies had hoped. Teams weren’t good at disciplining themselves either. “We’re human beings; we just don’t do that,” Klein says. “We’re social beings, and social issues get in the way of logic sometimes.”


So, will Holocracy be a success for Zappos? Time will tell. But regardless of the outcome, we still admire Hsieh for pushing the envelope and attempting to avoid bureaucracy.


Image Credit: Mathieu Thouvenin