(Photo courtesy: Quartz)
Zappos CEO Tony Hsieh has turned the online retailer into a billion-dollar destination for shoppers all kinds.
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Over the past 14 years, Zappos has innovated in customer service, mobility, cross-channel marketing and engagement strategies, and order fulfillment and delivery options.
While Zappos’ unique approach to business has made many retailers see the company as a notable threat to their livelihood, a new move being made by the company is making many scratch their heads in puzzlement.
In a recent recap of the company’s “All Hands” meeting in November 2014, Hsieh unveiled his plans to reorganize the company. Well, disorganize the company, if we’re technically speaking.
According to a detailed story published on Quartz, Hsieh discussed how the traditional retail structure was taking a backseat to “Holacracy,” which reporter Aimee Groth explained as “a radical ‘self-governing’ operating system where there are no job titles or managers.”
Rather than having a C-suite and other top-level executives, Zappos will follow a flatter model designed to distribute power more evenly. The article noted that the company will consist of approximately 400 circles in which employees can have multiple roles.
The goal? Complete transparency across the entire organization.
With some thought, it seems like the concept of a Holacracy could be crazy enough to work. After all, most retail industry studies and surveys note that organizational silos are a key inhibitor to omnichannel excellence and overall growth.
But with 1,500 employees, wouldn’t some kind of organization be required to keep everyone in line and on the same page in terms of what their responsibilities and focus areas are?
According to a 2012 study conducted by Stanford Graduate School of Business professor Larissa Tiedens and Emily Zitek, an assistant professor at Cornell University’s Industrial and Labor Relations School, sometimes employees prefer hierarchies to other organizational structures.
Participants were asked to go through several exercises and activities, such as remembering organizational charts and connections among employees. Based on this information, participants were asked to comment on how they thought the specific companies were doing. Overall those who studied hierarchical companies had a more positive view of the overall business.
An INC article reporting on the findings added: “It turns out, people like hierarchies because of the clarity they provide: They’re easier to memorize and more predictable. The charts that reflected more egalitarian structures confused the participants.”
So based on this research, do you think Zappos’ business makeover is going to be a success? What impact do you think it’ll have on innovation, collaboration and communication?
Share your thoughts in the comments below!
