Would You Function Better Without Your Boss?

For a while there, it seemed like a job at Zappos was one of those corporate leprechauns: if you could catch one, it would bring you to a pot of gold at the end of the rainbow and you would be happy forever. Sadly even mythical creatures cannot live well enough alone. The online shoe (and accessory) retailer has reinvented itself as a “holacracy,” and people — inside and outside of the company — are more anxious than contestants in a spelling bee.

In theory, holacracy has a certain appeal. Who hasn’t, at some point, wished for a world without bosses, or that a manager would just disappear for a while? At Zappos, though, it seems like the ideal of self-governance has stumbled in practice. In late March, Hsieh said in a companywide memo that Zappos would accelerate its transition to holacracy with a “rip the bandaid” approach. “As previously stated, self-management and self-organization is not for everyone, and not everyone will necessarily want to move forward in the direction of the Best Customers Strategy and the strategy statements that were recently rolled out,” Hsieh wrote.

He offered dissatisfied employees at least three months severance if they quit; 210 of them — or roughly 14 percent of the company’s workforce — took it.

The option of a severance deal is nothing new or unique. Zappos has offered it to new employees for a while and Amazon offers one too. But, um, people weren’t stampeding for the exits before. Now they are.

Historically, just 1 to 3 percent of new hires have taken Zappos’ severance deal. Amazon said last year that only “a small percentage” of its employees end up doing the same. The Zappos exodus suggests that employees aren’t buying into holacracy, the language of which wavers between manifesto-esque and outright cultish. (See again Hsieh’s March memo: “The people management aspects of the manager role are valuable in what the book refers to as Orange and Green organizations, but do not make sense in a self-organized and self-managing Teal organization.” And: “The right question is not: how can everyone have equal power? It is rather: how can everyone be powerful?”)

So what is a “holacracy” and why is it freaking people out so much? The idea of everyone being powerful sounds pretty appealing, in a Season-7-of-”Buffy” kind of way. Most employees do not have strong, positive feelings about their bosses, right?

Business Insider explains:

The online retailer is nixing all job titles and managers as it shifts to a super-flat structure known as “Holacracy.” When CEO Tony Hsieh first announced the shake up in November, he described Holacracy as a “self-governing” system that would boost transparency and streamline operations, Quartz reported. In the place of bosses and managers, Zappos will create hundreds of committee-like “circles” filled by employees.

As novel as the concept sounds, it has been tried before, without much success:

the bigger the company was, the quicker it tended to run into problems.

The fundamental issue? People just didn’t self-regulate as well as the companies had hoped. Teams weren’t good at disciplining themselves either. “We’re human beings; we just don’t do that,” Klein says. “We’re social beings, and social issues get in the way of logic sometimes.”

Another challenge was attrition. Companies bled talent as successful managers jumped ship instead of losing their titles. At the same time, poor and mediocre managers that the companies hoped to effectively demote continued to be seen as de facto leaders.

On the topic of superiors ELLE Magazine has published a vigorous defense of female bosses, who shouldn’t need to be defended at all, except that apparently they do. For what it’s worth, my terrible bosses and my terrific bosses alike have been either terrible or terrific for reasons that have nothing to do with their gender. Though one time I did have to lend a female boss my shoes.

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