Servant Leadership Workplace-Holacracy

Holacracy and Hierarchy at Zappos

What would it be like to have no more bosses at work?

To answer that, ask an employee of Zappos.

For some time now, the online apparel retailer has been implementing “holacracy.” Holacracy is a management approach in which authority and decision-making are distributed throughout self-organizing teams rather than being vested in a managerial hierarchy. It eliminates as much of the traditional management structure as acceptable.

Indeed, in a recent memo to the Zappos staff, CEO Tony Hsieh said that his ultimate goal for Zappos is “self-organization” and “self management.” To get there faster, Zappos decreed the elimination of all bosses. “As of 4/30/15, in order to eliminate the legacy management hierarchy,” Hsieh wrote, “there will be effectively no more people managers.”*

Those who did not like the idea of no more bosses at Zappos got the choice to leave with a severance package. At last count, about 200 (14% of the workforce) reportedly did.

At Cairnway, we are particularly interested in watching holacracy and hierarchy at Zappos. We believe that being a servant-leader is not a function of one’s place in the org chart. We believe good things come when organizational pyramids are flipped or flattened, if not forbidden. We agree with Robert K. Greenleaf (who coined the term “servant leadership” back in 1970), that a team is best led by a primus inter pares – a first among equals.

In short, we believe that exceptional performance can be achieved through servant leadership with or without changes to the formal hierarchy.

And, thanks to Simon Sinek, we have some reason to think that a formal hierarchy might be necessary for organizational success.

In his latest book, Leaders Eat Last, Sinek explains, “Almost everything about us is purpose-built to help increase our opportunities for survival and success, and our need for leaders is no exception.” We need hierarchy as a matter of biology, Sinek says. Like other biological systems that influence behavior, “our need for hierarchies is linked to food and protection.” Within a well-functioning hierarchy (that is, where trust is high), people play their roles and don’t waste undue time and energy trying to dominate each other.

It’s a little counterintuitive, but Sinek makes a strong case: Hierarchy is “a system much more conducive to cooperation.” Hierarchical incentives are hard-wired into us and have helped our species achieve spectacular evolutionary success.

What do you think?

Have we been focusing too much time on leadership development and not enough time on organizational design?

Should we, like Zappos, eliminate all bosses? Or, as Simon Sinek suggests, would we be better off accepting bosses as evolutionary givens and working to build the best ones possible?

We want to hear from you!

And don’t forget to download our latest ebook, Servant Leadership in the Workplace: A Brief Introduction. It’s free!


* To read Tony Hsieh’s memo to Zappos employees, click here.

1 thought on “Holacracy and Hierarchy at Zappos”

  1. Hi Joe,

    Thank you for this article.
    I disagree with Simon Sinek (for once) when he says “Within a well-functioning hierarchy (that is, where trust is high), people play their roles and don’t waste undue time and energy trying to dominate each other.”. In a hierarchy, people are trying to dominate each other because everyone wants more power and wants to climb the social scale. Roles and boundaries are not clear so the social tradition is in place and rules everything, that is the law. When we have a clear system with no bosses (or, everyone is a boss in their roles) but clear roles, we don’t need leaders that will motivate people. Everyone is playing its role and govern its own work. When the distributed authority system is clear, explicit and purpose-driven (the why at each level, organization level but also the why of each role), we can trust people to govern themselves.
    I think Simon Sinek is very good when it comes to defining the why but in term of leadership, I think it is better that everyone becomes a leader – as long as you have a clear why, people will motivate themselves to work towards it – that’s how you build leaders. If I am led by someone else, I give my power to that person, thus I will not become a leader.

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