Skip to main content

Go to work, but ditch the boss?

By Dave Logan
updated 8:51 AM EST, Wed March 5, 2014
STORY HIGHLIGHTS
  • Zappos is trying out holacacy, an organizational system that does away with hierarchy
  • David Logan: Holacracy tries to fix many things we all hate about companies
  • He says as a company gets larger, innovation per person tends to go down
  • Logan: Holacracy might just work at Zappos because of its unique culture

Editor's note: Dave Logan teaches at the University of Southern California Marshall School of Business and is the author of four books, including "Tribal Leadership" and "The Three Laws of Performance." He is also senior partner of CultureSync, a management consulting firm, which he co-founded in 1997.

(CNN) -- A few months ago, after drinking scorpion shots with Zappos' CEO Tony Hsieh, he gave me a tour of the Downtown Project, a formerly blighted neighborhood in Las Vegas being revitalized. Hsieh and others are investing $350 million to help turn the desert town into the smartest city in the world. Sound ambitious? It is.

Hsieh's interest in cities strikes many people as a curiosity, given his track record at Zappos. Talk to him (especially over scorpion shots), and you find out it's actually the reverse. "Every time the size of a city doubles, innovation per person increases, but when a company gets bigger, innovation per person goes down. Why is that?" he asked.

"In a city," he explained, "people and businesses are self-organizing. We're trying to do the same thing at Zappos."

Dave Logan
Dave Logan

Part of that goal involves moving Zappos to holacracy -- an organizational system that throws out all job descriptions, job titles, management (as we know it), and the organization chart, and starts over. Since Zappos' announced this move, people have wondered whether holacracy is just another fad or something to be taken seriously.

Let's take a closer look at holacracy. (Full disclosure: I endorsed Hsieh's book "Delivering Happiness," and he wrote the preface for my book, "Tribal Leadership." He's spoken to my USC classes, and I've spoken at several Zappos events.)

You should care about holacracy because it tries to fix many things we all hate about companies, including:

1. The organization chart on the wall has nothing to do with how people do their jobs.

2. The title you have probably doesn't reflect what you do, unless you own the company.

3. Your manager knows nothing about what you do much of the time, and yet makes decisions that determine your success.

4. Traditional management creates "my life sucks" cultures.

If any of these problems sound familiar, then you and Hsieh (and many of us in the leadership world) are on the same page, so far at least.

Holacracy was pioneered by Brian Robertson and outlined in his upcoming book, "Holacracy: Evolution for Organizations." The basic building block is a role, which is a breakdown of the organization's work. Roles work together in "circles" that self-organize. Circles can spawn sub-circles, and connect with other circles with "links"—roles that form conduits between circles. People "energize" roles, and one person can energize multiple roles. Circles have regular governance meetings in which people talk about roles, accountabilities, authority and policies.

If this description (which I ran by Robertson word-for-word) sounds like he's been reading the rules of Monopoly translated into computer code by way of Burning Man, you're not far off. Holacracy is complex, and designed to be so. It is hard to implement. To date, Zappos is by far the largest adopter of holacracy.

When it works, holacracy is amazing, so it's no wonder business leaders are paying attention. David Allen, author of "Getting Things Done" and founder of a consulting and training company that runs on holacracy, told me that after a tough adjustment period: "The company becomes much like a well-tuned machine that, to some degree, is self-correcting. You don't have to spend a lot of time going through channels to get things handled."

So, will it work at Zappos? Probably. Holacracy requires a great culture, and people who value egalitarianism. It's not communism (despite what some critics are saying), but it does throw out conventional ideas of power and hierarchy. It helps if people are grounded in customer service, can tolerate weirdness, and can take a leap of faith into the unknown.

If this description isn't your company, then holacracy will not be a great fit.

Holacracy is not coming to a company near you, at least not in its current form. Few have the value set of Zappos and very few have great cultures. It remains to be seen whether it can scale to a company of Zappos' size.

The real story here is that there are many new organizational forms out there, holacracy being one. Most emphasize ownership thinking, agile methods and great cultures. Like cell phones in the 1980s, these new organizational models are big, bulky and hard to use. Many don't work at all. But over time, some of them will become sleek, easy to use, more powerful, and even elegant.

Holacracy may just surprise us.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Dave Logan.

ADVERTISEMENT
Part of complete coverage on
updated 2:25 PM EST, Fri November 21, 2014
Maria Cardona says Republicans should appreciate President Obama's executive action on immigration.
updated 7:44 AM EST, Fri November 21, 2014
Van Jones says the Hunger Games is a more sweeping critique of wealth inequality than Elizabeth Warren's speech.
updated 6:29 PM EST, Thu November 20, 2014
obama immigration
David Gergen: It's deeply troubling to grant legal safe haven to unauthorized immigrants by executive order.
updated 8:34 PM EST, Thu November 20, 2014
Charles Kaiser recalls a four-hour lunch that offered insight into the famed director's genius.
updated 3:12 PM EST, Thu November 20, 2014
The plan by President Obama to provide legal status to millions of undocumented adults living in the U.S. leaves Republicans in a political quandary.
updated 10:13 PM EST, Thu November 20, 2014
Despite criticism from those on the right, Obama's expected immigration plans won't make much difference to deportation numbers, says Ruben Navarette.
updated 8:21 PM EST, Thu November 20, 2014
As new information and accusers against Bill Cosby are brought to light, we are reminded of an unshakable feature of American life: rape culture.
updated 5:56 PM EST, Thu November 20, 2014
When black people protest against police violence in Ferguson, Missouri, they're thought of as a "mob."
updated 3:11 PM EST, Wed November 19, 2014
Lost in much of the coverage of ISIS brutality is how successful the group has been at attracting other groups, says Peter Bergen.
updated 8:45 AM EST, Wed November 19, 2014
Do recent developments mean that full legalization of pot is inevitable? Not necessarily, but one would hope so, says Jeffrey Miron.
updated 8:19 AM EST, Wed November 19, 2014
We don't know what Bill Cosby did or did not do, but these allegations should not be easily dismissed, says Leslie Morgan Steiner.
updated 10:19 AM EST, Wed November 19, 2014
Does Palestinian leader Mahmoud Abbas have the influence to bring stability to Jerusalem?
updated 12:59 PM EST, Wed November 19, 2014
Even though there are far fewer people being stopped, does continued use of "broken windows" strategy mean minorities are still the target of undue police enforcement?
updated 9:58 PM EST, Mon November 17, 2014
The truth is, we ran away from the best progressive persuasion voice in our times because the ghost of our country's original sin still haunts us, writes Cornell Belcher.
updated 4:41 PM EST, Tue November 18, 2014
Children living in the Syrian city of Aleppo watch the sky. Not for signs of winter's approach, although the cold winds are already blowing, but for barrel bombs.
updated 8:21 AM EST, Mon November 17, 2014
We're stuck in a kind of Middle East Bermuda Triangle where messy outcomes are more likely than neat solutions, says Aaron David Miller.
updated 7:16 AM EST, Mon November 17, 2014
In the midst of the fight against Islamist rebels seeking to turn the clock back, a Kurdish region in Syria has approved a law ordering equality for women. Take that, ISIS!
updated 11:07 PM EST, Sun November 16, 2014
Ruben Navarrette says President Obama would be justified in acting on his own to limit deportations
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT