When a city doubles in population, innovation and creativity increase by 15 percent per capita. This is the opposite of what happens to a company. Zappos CEO Tony Hsieh was intrigued by that piece of information. He knew he had to change his management style to transform the company to resemble more like a city. It took a while, it was painful, but the results have shown that is was the right call. This is what he did.
Zappos has always been ahead of the game. “Create fun and a little weirdness” was one of their ten commandments. Meetings included comedians, animal costumes and live music, creating a young and vibrant atmosphere, the perfect place for a bold, creative mind.
But it wasn’t enough. Zappos CEO Tony Hsieh knew he wanted more. A deeper change in the way they work, one better suited for today’s workplace.
He knew he was on the right track when he met Brian Robertson during a conference. Robertson is an advocate of self-management, a lead technique that lets employees take the decisions on their own, without specific guidance from their manager. He took the concept to the next level, creating a new management style based on “the agile software development movement of the late ’90s, which advocated a workflow that allows engineers to develop ideas without the direction of a manager,” Business Insider writes.
Robertson studied on his own and later founded HolacracyOne, a company designed to offer tools and coaching to the companies of the future. He was inspired by “holarchy” a word used for the first time by Arthur Koestler in his book “The Ghost in the Machine” published in 1967.
No hierarchy, just collaboration
His management system gets rid of grandiose titles printed on business cards and resumes. In turns everybody into a lider. It’s not based on hierarchy, but on roles. Individuals are encouraged to join several teams, according to their taste. Decisions aren’t made at the top of a hierarchy, but by the self-organized teams. Several NGOs and organizations already use this. Yet, such a revolutionary system takes a while to implement, even in modern companies, like Zappos.
Tony Hsieh offered his employees a way out, a severance pay. 14 percent of them, who didn’t believe in holacracy management style took it soon after the read the moment. The change was brutal, they didn’t believe in the new direction the company was heading. It was “painful and uncomfortable,” Robertson says.
Hsieh himself wrote that transforming Zappos “would feel like upgrading an airplane as it flies through the air”. Three months after the implementation of this system, something unexpected happened.
“Multiple people came up afterwards to hug me, some with tears in their eyes — often the same people who were yelling at me and disliked it in the beginning,” Robertson told Business Insider. “Instead of people challenging it, they were sharing what they were learning — they were talking about how they liked it.” Soon, the company planned to suspend all hierarchies.
“Like all the bold steps we’ve done in the past, it feels a little scary, but it also feels like exactly the type of thing that only a company such as Zappos would dare to attempt at this scale,” Hsieh told his people.
With the management style changed, Zappos CEO might be one step closer to achieving his dream of building a company like a city. His statement is profound and dashing, and 86 percent of his people follow him. To make things work, each of them needs to be at their best and to add collaboration to the equation.
Along with diversity of thought, fun and a little weirdness, collaboration enhances innovation. At Quandora, we promote the same core values. We believe that power (read as: knowledge) should be in the hands of the many. We try to help those avid learners, who seek answers and are always interested in knowing more. With proper collaboration, the road to modern management is paved.
Happy Knowledge Sharing!