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The offer of severance tipped them over the edge. For the sake of Zappos (and their careers), they had played along, but they were unhappy. Although many of their colleagues liked the system for a variety of reasons-they thought it shaped roles to “make the most of my talents,” for instance, and allowed “each person to influence the governance of the organization”-a number of those who left hadn’t experienced it that way. They talked about attending trainings to learn “shiny buzzwords” but seeing little difference in the way work was done facing “ambiguity and lack of clarity around progression, compensation, and responsibilities” getting “no definitive answers” to what they felt were basic organizational questions and concluding that holacracy was a “half-baked” idea. In exit interviews and surveys, the 6% shared their concerns. Although most decided to stay, 18% took the package, with 6% citing holacracy. On this particular day, in May 2015, the circle charged with overseeing holacracy’s adoption was questioning the method’s effectiveness.Ī couple of months earlier, Zappos CEO Tony Hsieh had offered severance packages to all employees for whom self-management was not a good fit-or who wished to leave for any other reason. Five employees were camped out in a team room at Zappos, the largest company so far to implement holacracy-a form of self-management that confers decision power on fluid teams, or “circles,” and roles rather than individuals.

It was a Thursday afternoon in Las Vegas. But their research and experience also suggest that elements of self-organization can be valuable tools for companies of all kinds, and they look at circumstances where it makes more sense to blend the new approaches with traditional models. It’s distributed among roles, not individuals, and responsibilities shift according to fit and as the work changes.Īdopting self-management wholesale-using it to determine what should be done, who should do it, and how people will be rewarded across an entire enterprise-is hard, uncertain work, and the authors argue that in many environments it won’t pay off.

Teams design and govern themselves, while nested within a larger structure.

Within them, individual “roles” are collectively defined and assigned to accomplish the work. Self-organization models typically share three characteristics: To gain a more accurate, balanced perspective, the authors-drawing on examples from Zappos, Morning Star, and other companies-examine why these structures have evolved and how they operate, both in the trenches and at the level of enterprise strategy and policy.

Most observers who have written about holacracy and other forms of self-management take extreme positions, either celebrating these “bossless,” “flat” work environments for fostering flexibility and engagement or denouncing them as naive experiments that ignore how things really get done.