Zappos gets rid of managers!

http://www.washingtonpost.com/blogs/on-leadership/wp/2014/01/03/zappos-gets-rid-of-all-managers/#!
http://en.wikipedia.org/wiki/Zappos

I think chances are that this is just a fad/stunt, or if they are serious it will still turn out badly for them. :) I haven't read up on "holocracy" (a company organized around tasks/projects rather than depts/people), but to me it doesn't seem to be a natural fit for a mixed e-commerce firm with strong-willed people like Zappos. They have over 1,500 employees - I think it would be pretty hard to monitor and control such a diverse org without some sort of management chain. How would you resolve disputes, or make a controversial decision with ambiguous data? At some point a single leader has to make a call. I can also see performance evaluation and career development becoming a mess. Though they could theoretically save a lot of time/effort on less bureaucracy - but I thought they were an agile, lean Internet company already?

While I think the US workplace in general would benefit from more employee empowerment and democracy, we all know that such freedoms/privileges can be abused (and do not benefit productivity in all cases). While not really "fair", it probably makes more sense to empower and give more freedom to your top 20% performers (who really keep the company going), rather than everyone. More freedom could be an incentive for the other workers to strive toward too. I do like the Zappos idea of "lead links", or pseudo-managers who just assign tasks and resources, but don't have the authority to tell workers how to get stuff done. That is empowering, as few people like/need a micromanager (probably bad for performance and satisfaction anyway).

We are social animals, and have natural tendencies towards hierarchy. Of course even in a holocracy, there will be unofficial pecking orders, politics, and such. Could it degenerate into Survivor? :) But maybe Zappos could pull it off due to their "family culture." They really want their workforce to be like-minded Zappos fanatics. A lot of firms give lip service about creativity, team-first attitude, and passion, but I think they do a better job than most (especially compared to stuffy old firms like GM or Chase). Maybe it's just superficial propaganda, and deep down the workers are just going through the act and grumbling, but at least it's on their minds - even if they don't walk the talk 24/7 (who does?).  

I only know 1 person who worked at Zappos (a project manager), and she gave the place pretty bad reviews (especially top leadership). Maybe in that case, it's good to minimize their ability to do harm with a flat structure! But for the record, employee reviews on glassdoor seem generally positive. Though in a holocracy, what the heck do the former middle managers do then? Repurpose them to man the phone lines and pack boxes? I imagine they will have more time for business development and strategic analysis, but as we all know, middle managers may not be the most gifted employees in those areas, especially if they are past their prime and no longer strong with innovative thinking.

http://www.glassdoor.com/Reviews/The-Zappos-Family-Reviews-E19906.htm

Well, after AMZ bought Zappos, they do not report on division-specific financials, so we do not know how well their strategy and culture are working. But before they were acquired, I believe they were roughly a break-even business. Free shipping and unlimited returns are costly, though I guess their corporate strategy believed that reputation and customer loyalty are worth it in the long run. In general, it's an audacious assumption that enough online customers care more about service rather than low price to keep Zappos going. If that value proposition is inaccurate, then org structure is moot.