'First, Let's Get Rid of All the Bosses' -- the Zappos Management Experiment

schnell writes: The New Republic is running an in-depth look at online shoe retailer Zappos.com's experiment in a new "boss-less" corporate structure. Three years ago the company introduced a management philosophy that came from the software development world called "Holacracy," in which there are no "people managers" and groups self-organize based on individual creativity and talents. (When the change was announced, 14% of the company's employees chose to leave; middle management openly rebelled, but perhaps surprisingly the tech organization was slowest to embrace the new idea). The article shows that in this radically employee-centric environment, many if not most employees are thrilled and fulfilled, while others worry that self-organization in practical terms means chaos and a Maoist culture of "coercive positivity." Is Zappos the future of the American workplace, a fringe experiment, or something in between?

Comments

I, for one,

[vikingpower]

welcome our new <null-pointer> overlords!

Give me a raise

[dmaul99]

So how do I get a raise in such an environment? How do I differentiate myself from my coworkers? This has Lord of The Flies written all over it. Or that Simpsons episode where Martin ends up in a bird cage.

Re:Give me a raise

[xxxJonBoyxxx]

>> So how do I get a raise in such an environment?

Do you basically live at the office? Raise, unless...

>> How do I differentiate myself from my coworkers?

Do they also live at the office? Then you can't.

Re:Give me a raise

[rudy_wayne]

And there's the problem.

We've all had to deal with asshole bosses and it is very tempting to say "Get rid of the bosses and just let people do their jobs without interference". But, you can't have a hundred people just doing whatever they want. Somebody has to be in charge. Somebody has to be the final authority when tough decisions need to be made. Otherwise, you've just got chaos. It may work for s short time, but in the long run, it simply isn't workable.

Anyone who has any real world experience knows that management by committee just doesn't work.

Re:Give me a raise

[Anonymous Coward]

My wife works at Zappos. Compensation is based on "badges", designed by the employees themselves and reviewed through a compensation "circle" (committee). It's not super well defined or understood yet, and my informal conversations with her friends/coworkers indicate to me it isn't well like.

The overall mood at the organization isn't fantastic, the've lost a lot of top talent, a significant percentage the IT department is contractors now, and some very large on-going IT infrastructure projects halted or failed outright.

Re:Give me a raise

[tripleevenfall]

You don't.

People who aren't managed are not being invested in.

Obviously, the culture there is one of people being replacable cogs, who will move on when they get bored or wish to better themselves, and a new cog will be swapped in.

Re:Give me a raise

[blazer1024]

So you *can* get a raise by wearing more flair?

Re:Give me a raise

[Actually, I do RTFA]

So how do I get a raise in such an environment?

I know, RTFA is anathema, but there is a real (and stupid) answer for that:

One thing Zapponians now have to do is their own research about salaries, to find out the market rate for jobs at other companies that correspond to their roles. In a normal corporation, such things are taken care of by the human resources department. Not at Zappos, not anymore. Instead, if Murch wants a raise, she has to do all the research into what she's worth, create a badge, come up with qualifications for receiving the badge, and then design the actual look of the badge. Then it all has to be approved by the People Pool & Comp circle. And who happens to be the lead link of that circle? "Now, instead of trying to convince your boss that you deserve more money," said Murch, incredulously, "you have to convince Tony Hsieh [Zappo`s CEO]."

Re:Give me a raise

[bluefoxlucid]

The bigger problem is that management is a legitimate job. I'm studying project management--studying because I studied it and it's being a fucking pain in the ass to get into--and so I know a lot about budgeting, about team building, about managing human resources (e.g. do you hire someone or send your people to training? How do you track skills and competency?), about negotiating contracts and purchases, and a whole lot of other shit. To get rid of the managers is to put the responsibility of critical work onto a group of people who have other shit to do.

My understanding of management also leads me to conclude that everyone should have some understanding of management. I see too many managers just deciding it's an authoritarian chain: you do what I say because I said it. From my perspective, as a manager, it's my job to make sure shit gets done; that means that you need to understand why we do things the way we do, and I need to understand any important facts that will affect how to get things done. If we have a difference in understanding, knowledge must transfer: you must understand that we do these work breakdown structures and risk assessments to avoid doing excess work, missing work, or producing worse output for more effort; and I might learn along the way that I missed some critical information, which changes what work we do, how we do it, and how much time we estimate it will require.

Managers not communicating such information to engineers and other subordinates results in IT people saying a lot of stupid shit about what management should do to fix the shop--most of which would fuck things up a hell of a lot worse. Engineers not communicating to managers results in managers telling engineers to do stupid shit, not caring that it can't be done or that it can't be done in so little time. Impediments to communications are the primary way to fuck up by the numbers.

The manager is a tool for both their superiors and their subordinates. Management *is* a technical job, and half the damn time it's being performed by unskilled idiots.

Re:Give me a raise

[TheRaven64]

The problem is regarding management as a position of importance that people are promoted to. Management is a specialisation, just like accounting or programming. You wouldn't say that a good manager should be promoted to being an accountant or to being a programmer, or that people who are accountants are the most important in the organisation. Manager is an administrative position and should be regarded as such, not as a leadership role that is somehow more important (and worthy of more pay) than the people that they are responsible for. HP did this (long ago) with parallel technical and management tracks. Managers were often less senior than the people that they were managing.

Re:Give me a raise

[swb]

An enlightened perspective, and I think you're right.

I see too many managers just deciding it's an authoritarian chain: you do what I say because I said it.

This will never be fixed until managers are paid and treated the same as the people they are managing. As long as they are compensated and treated as figures of elevated status, they will tend to act in authoritarian ways.

Re:Give me a raise

[Aighearach]

But, you can't have a hundred people just doing whatever they want. Somebody has to be in charge. Somebody has to be the final authority when tough decisions need to be made. Otherwise, you've just got chaos.

In a restaurant that I'm familiar with, the actual "manager" works from home, (read: doesn't work) and whoever the most senior person physically in the building at any time is the "Person In Charge." That is the person designated as the official "call 911/contractor/inspector" if something goes wrong. This is not a real problem, it is just something you're presuming is a problem. You don't have to "be in charge" to be the designated front-person for dealing with (some class of problem.)

Employee-owned businesses, which are usually corporations where all the stockholders are employees, don't have any problem at all. Where you need a management function, you can consent to placing responsibilities on a particular worker, without making them a "boss" or giving them direct power over other employees. When you take away the generic ability to throw a temper tantrum and fire people, it actually doesn't reduce the ability to make authorized decisions to achieve real and consensual management goals.

Of course, nerds already know about this in detail because Kim Stanley Robinson explored the subject for about the last thousand pages of the Mars trilogy.

Re:Give me a raise

[PopeRatzo]

My boss is an asshole. Holacracy? Been there.

Assholacracy.

Re:Give me a raise

[bluefoxlucid]

What you are describing usually works when a company is doing great. Then management can be upfront about the department's goals and criteria, and in general be transparent on what is expected out of its employees. However reality is such that if there are some problems, being upfront about these often leads to best employees leaving for greener pastures

No, it doesn't.

There is a reason we do work breakdown structures: it seems like a waste of time, because you all think you know what you're doing; but it's gets us a full view of all the work we have to do, so we can understand if we don't have the capability, if it's going to take a lot more work than we think, if we need to hire more people, to consider a smaller target, or whatnot. It lets us organize our work so we understand what we're doing, so we have everything planned ahead, and so we know where our blind spots are and can use rolling-wave planning to further decompose the work in those blind spots as we finish earlier work and come more to understand what we're doing.

There's generally a reason we do everything, even the things the engineers disagree with. There's a reason we make decisions against the team's judgment--hopefully not for incompetence. There are clear reasons for specific processes, for forms, for encryption policies, for software restrictions, firewalls, everything. There's a reason you're not allowed to burn CDs. There's a reason you've been told to use a fully-featured $50,000 commercial software and not a half-functional open source package--requirements and deliverables, other projects requiring those features, future plans, risks and opportunities.

When you hunker down and say "Do what I say and don't question it," you're sending the signal that the employee's expertise is unnecessary. You're also cutting off your ability to use their expertise, which is going to lead to a corporate collapse.

Re:Give me a raise

[rbrander]

>Somebody has to be in charge.
>Somebody has to be the final authority when tough decisions need to be made.
>Otherwise, you've just got chaos.

A perfect statement of the authoritarian belief system. I say "belief system" not to be insulting but to point out that such statements are often phrased, as here, to have no exceptions, there's no "usually" qualifiers anywhere. So a single counter-example proves them to be incorrect statements. As there are many counterexamples, its a belief system, not a fact.

Decisions can be made by voting, or consensus, for instance. The workability is highly dependent on the group size, the problem, and particularly on whether the group contains a lot of people with authoritarian belief systems. Such people rarely want to contribute unselfishly to a group dynamic, they're constantly looking for "angles" to improve their own personal situation at group expense and the group dynamic quickly breaks down.

But if you can pull a group together where such people are absent or muzzled, they are frequently far more productive that groups lashed to a boss under an authoritarian system. They often have "leaders" - sometimes a number of them, each a Leader at a different type of problem - that other people follow happily because you get results if you follow them - but not bosses that compel obedience.

Re:Give me a raise

[LWATCDR]

I got a better idea of what a good manager was from reading the book "The Soul of a New Machine".
The problem with good managers is they look like they are doing nothing.
A good manager fixes problems before they happen. You are going to need a logic analyzer next week and it shows up on your desk on Friday of this week.
It is just transparent.

Re:Give me a raise

[king neckbeard]

The point I believe he's making is the idea that management positions are "better" than non-management positions is flawed, and that management should be seen as more of a lateral difference instead of a vertical difference.

Re:Give me a raise

[vux984]

Yes, it is a leadership position. But i think his point still stands. It is ~just~ another position. And its not implicitly more important, or deserving of higher pay than all other positions.

If I run a small medical practice the most important positions are the doctors. If its large enough and successful enough, it'll hire an office manager who will deal with supplies, staff scheduling, deal with contractors (window cleaners, floor waxers, IT, etc...)

Its a more demanding and complicated job than receptionist, but its not more important and demanding than being a doctor. They are paid more than the receptionists, but less than the doctors. And its *just a job*.

The small medical practice has it right... the primary productive 'employees' the doctors -- need a manager, and so they hire one. But the manager isn't their "boss". He's their manager.

Yet in corporate America, there's this pervasive lunacy where they take the equivalent of one of the Dr's, strip him of all his medical duties, "promote" him to manager, and then pay him more... and then layer on this bizarre notion that the manager should be the boss.

That works in a fast food restaurant because the manager has likely been trained on every position, can train new people for those positions, can spot fill any position as needed, as well as being responsible for dealing with customer issues, providing leadership, managing supply levels, scheduling, cash management, key holder, etc. He deserves to be paid more.

But in a lot of scenarios the small medical practice has it right. The producers should be the ones in charge of hiring, evaluating, and replacing their managers.

An engineering or architectural firm would be run the same way... the engineers or architects would hire a manager. And the manager is an employee, not their boss.

But in big corporates -- that seemingly obvious structure comes apart. And who ever is assigned to be manager is lord and master over all under his domain... he can be the least qualified person in the room, but he decides who does what, and how well they are doing it, and even what metrics to use to measure them ?!!! WTFBBQ?!!

If I had a manger in a software development team role, I'd want a structure where I'd look to him as my peer; there to do an important job of his own, where we evaluate each other; and where we can replace him if he's not working out...

Re:Give me a raise

[im_thatoneguy]

The problem is regarding management as a position of importance that people are promoted to.

This is perhaps one of the single largest failures of our social organization. "Boss" has come to mean "important" or "ruler" instead of being an integral component to facilitate real work. It would be like saying that a switch is the most important and valuable piece of hardware in an organization.

In college I studied film direction and my friend was studying producing and one night while bitching about this exact phenomenon (everyone wanting to be a director or producer because "they're in charge" instead of because they were attracted to the unique specialized work of a director or producer) we settled on the "Doer and Enabler" dichotomy. Directors, Managers, Producers, Supervisors are not Doers, they are Enablers. An enabler's job is to help the doers do. An enabler should be clearing the way, organizing materials and answering questions that doers need answered. A doer obviously actually creates things and does the work.

There certainly are Doer/Enablers, if you have an art director, or a software architect they often start to straddle enabling others to execute their vision while also providing a high level plan--but for the most part management is not a doer, they are an enabler.

However, people generally want more money than they have so the only way to get that more-money is to become a manager. It's stupid. If I was running an experiment I wouldn't fire all of my enablers, I would simply stop making the management position necessarily an upgrade or promotion but more of a crossgrade with a similar payscale.

Just like Microsoft

[lgw]

Microsoft though this was a clever idea once as well, firing all the low-mid level managers in engineering (senior management was safe of course) and keeping just the engineering team leads. Today, first-level managers have the job title "Lead", and nothing else has changed. "Meet the new boss, same as the old boss."

Zappos is part of Amazon, of course, so this could be a contained experiment to see how it goes before a larger scale move. I suspect it will go the same way as MS. First level people managers serve a vital role (whether the individuals in that role are competent is a different question) in preventing "drama", and hiring, training, and retaining the best. Mid-level managers may be mostly useless overhead promoted out of harm's way, but someone needs to decide what projects are worth funding, and what projects aren't worth continuing, from a business perspective. Those roles will be filled again eventually. "And their beards have all grown longer overnight."

Re:Just like Microsoft

[tripleevenfall]

A good manager isn't someone that you spend your life wanting to get rid of.

What's that old quote... with the best leaders, when the work is done the people say "we did it ourselves"

Re:Just like Microsoft

[lgw]

with the best leaders, when the work is done the people say "we did it ourselves"

That's really a great quote. Bad managers think management is about "telling people what to do", but really, that's the failure mode of management. If your team has good people (and that's the job: making that happen), you need only present to business goals and any broader vision, and let your people do their jobs.

My favorite quote is "you have a good leader when the people are doing what they should. He might be telling them to do that, he might be telling them nothing, he might be telling them the opposite so they'll do it just to spite him, that's all implementation details." But really that's only half the picture: you job is to balance discipline (people doing what they should) with morale. Any idiot can make a trade-off between those two in either direction, but it's the product of both that's the long-term productivity of the team, and raising both at once is the real trick.

Disappointed: Article not what it says

[Actually, I do RTFA]

TFA is a description of what a holacracy is, and how it should work. And the people quitting when the experiment was announced. Not a detailed report of the theory in practice.

And while TFA glows about it, the reports I've read about the Zappos experiment [citations not committed to memory] indicate that after a year, it was hard to get issues like "getting from the office to the parking structure at night is physically dangerous because of changes since the holacracy took over" solved.

Excellent experiment!

[meta-monkey]

This looks like an excellent experiment for someone else's company to do.

New age ideas, old age greed

[JoeyRox]

The biggest issue I have with Mr. Hsieh is that one of his core values is employees should be motivated by factors other than compensation. I can certainly agree with the premise but the problem is he doesn't offer much in exchange for the lack of compensation. Employees are exposed to all the difficulties of a young, startup atmosphere, including long hours, uncertain work/living environment (move to downtown uprooted lots of employees), volatile policies (holacracy implementation), etc... But employees get none of the benefits that normally come with those issues, specifically compensation.

When Tony sold Zappos to Amaozn he became a centimillionaire several times over. Yet none of the rank and file earned a penny off the sale, per Tony's core belief that employees shouldn't be motivated by compensation, which apparently includes equity compensation as well. If you're going to treat your employees like guinea pigs for your social theory experiments at least give them some carrots for the distressful uncertainty it creates.

Of course the tech workers rebelled.

[Rakarra]

They rebelled because they don't want to do what they managers do. Decisions the managers make don't just go away because no one in charge is there to make them.

I had a job when I was in college where, in the latter days, I was promoted to a senior position in a campus computer lab that had managerial aspects in addition to the technical stuff I did before. I got that position because I knew my stuff, helped organize the lab, and was a senior worker there (in a workplace staffed by college students, it doesn't take long to attain seniority). I hated it. HATED. Worst time I've ever had in my career. The point in the semester where I was supposed to submit performance evaluations.. I dreaded that. These were decisions that would affect peoples' salaries. Affect whether they were kept on. Affect what they heard from the "real" managers. For a guy who wanted to code and set up servers and tinker, it was a stressful distraction.

I think a lot of geeks are like that. They don't want to be the manager. They don't want to be involved with those sorts of decisions. But there are so many things that a good manager will do to remove that burden from the geek. They can manage inter-personal conflicts. They can decide the direction that the department will go in. Most importantly, they can negotiate with other departments. If the tech department has no advocate who can explain in plain language the pros and cons of technical decisions, then other departments are going to make those decisions for the tech department without any input from them. I'm sure there are a lot of geeks who are now saying "oh, it's already like that everywhere." It's not. In particularly dysfunctional environments it can be, but in places where various departments have a good managerial staff, at least executives can understand what the risks involved are, and what is realistic. I understand the temptation to replace bad managers with no managers, but I can't see how "getting rid of all the managers" will improve that situation.

Google tried this...it failed

[businessnerd]

Google attempted something similar back in 2001. Larry Page up and fired all of his project manager (in front of all of the employees!) and left it to the engineers to form their own teams, and pretty much just manage themselves. It didn't last long. Per this article:

Page’s reorganization didn’t last long either. While some engineers thrived without supervision, problems arose. Projects that needed resources didn’t get them. Redundancy became an issue. Engineers craved feedback and wondered where their careers were headed. Eventually, Google started hiring project managers again.

This was also a big contributing factor to Page and Brin being relegated to the kids table for a while until they were mature enough to run the company on their own.

Do you want me to code, or deal with the suits?

[raymorris]

Somebody has to deal with the board of directors, senior managers, and large clients, ensuring that they're wishful thinking and lack of technical expertise doesn't destroy any chance that the project will be successful.

I can spend my time explaining to the suits what is possible and what isn't , or I can architect and code the project. Which do you want me to do? Someone has to manage expectations and point out that fast-tracking one thing means delaying another. That's called management. Somebody has to do it. If I spend my day doing management, I can't spend it coding - and vice-versa. Forcing techies to deal with political BS and "dumb" executives is a sure way to piss them off. Many of us would rather have a good manager insulate us from the stupid.

Re:Do you want me to code, or deal with the suits?

[Aighearach]

Protip: you don't have to have a boss to have somebody working the management function you describe.

That's the part people are missing; the vast majority of management functions do not require a person with nearly unlimited power and discretion over the other workers involved. A team can simply have a "external liaison" hat that somebody has to wear, and whoever is currently assigned that function does the "explaining to the suits what is possible and what isn't." In your example, I see no utility at all in involving a boss. If there is a project lead who is not only a technical lead, but actually a boss, they would actually be well-served having an assistant who can do grunt work like explaining possibilities of engineering to suits. That said, most of the projects I've been on do not have a boss inside the team at all; the worst the team leader could do is the same that any other team member could do; write an email to a suit. Instead, the team leader is the one designated to have authority over what goes into the source repository, the technical requirements for those things, and to tie-break the who-does-what when everybody wants the same toy.

Conflating bossing with the management of a resource is the base of the problem. If there is truly a conflict of interest between what the team wants and what an individual worker does, that can be dealt with in a separate process than is used for managing team resources. In fact, once that sort of issue comes up and there is that much conflict, the worker just needs to get fired (or transferred, re-educated, etc, depending on your societal norms) and that can be done by a vote; there is no requirement to have a Boss even to decide who gets hired and fired.

Of course, all of that works only when workers have a high enough morale to support a healthy work ethic. If there is high turnover then it will be Lord of the Flies. But if it is well-paid professionals, who value the work they do personally, and the work the company does, then it can run very smoothly. (I use "professional" to describe people who take their career seriously, not just white collar workers with letters)

Re:Do you want me to code, or deal with the suits?

[boristdog]

Yes and no. GOOD managers obviate the need for a "holocracy", but good people managers are rare as hen's teeth. I have a "decent" manager, but he's too much of a pussy so I have to deal with the higher-ups myself on any important issue. And for any minor issue I don't need a manager anyway.

Any group will still have leaders. I am a de facto leader of my group, they all ask me for advice on projects and situations, because the real management will just roll over and do whatever the upper echelons say, even though they no nothing about the situation. I don't "manage" but I offer suggestions.

So the traditional people manager is not necessarily the best option. I don't know if holocracy is the best option, but at least SOMEONE is trying something new. If it works, that's awesome. But to flat out say it won't work is stupid.

Re:Do you want me to code, or deal with the suits?

[neurovish]

Anyone who uses "architect" as a verb should be banned from the workplace.

...even if they provide a value-added service or enhance the synergies?