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Monday, March 24, 2014

Strategic CSR - Zappos

The article in the url below shows how Zappos is pushing the boundaries of corporate culture even further:
“Online retailer Zappos has long been known to do things its own way. The customer-service obsessed company calls its executives ‘monkeys,’ has staffers ring cowbells to greet guests, and offers new employees cash to quit as a way to test their loyalty. The Las Vegas-based retailer is now going even more radical, introducing a new approach to organizing the company. It will eliminate traditional managers, do away with the typical corporate hierarchy and get rid of job titles, at least internally.”
Although this decision has great symbolic meaning (it sends a strong message that all employees are valued), there also seems to be significant substance attached to the move:
“The unusual approach is called a ‘holacracy.’ Developed by a former software entrepreneur, the idea is to replace the traditional corporate chain of command with a series of overlapping, self-governing ‘circles.’ In theory, this gives employees more of a voice in the way the company is run.”
The move also represents a strong statement against the stultifying effects of bureaucracy, while retaining ideas of accountability and transparency:
“At its core, a holacracy aims to organize a company around the work that needs to be done instead of around the people who do it. As a result, employees do not have job titles. They are typically assigned to several roles that have explicit expectations. Rather than working on a single team, employees are usually part of multiple circles that each perform certain functions. In addition, there are no managers in the classically defined sense. Instead, there are people known as ‘lead links’ who have the ability to assign employees to roles or remove them from them, but who are not in a position to actually tell people what to do. Decisions about what each role entails and how various teams should function are instead made by a governing process of people from each circle.”
In making these changes, however idealistic and well-intentioned, Zappos is running-up against thousands of years of human evolution:
“Bob Sutton, a professor at Stanford’s Graduate School of Business … says ‘show me any group of five human beings or five apes or five dogs, and I want to see the one where a status difference does not emerge. It’s who we are as creatures.’”
Recognizing this, Zappos has so far moved only 10% of its employees over to the new system and hope to have everyone transitioned by the end of this year. Still, they fully expect the process to take a further six months before everyone has got used to the new rules (or absence of rules).
BTW: There is an interesting note at the bottom of the article:
Note: Amazon founder and CEO Jeff Bezos also owns the Washington Post.
Zappos, of course, was bought by Amazon in July, 2009, although it reportedly operates as an independent unit within the Amazon umbrella. This letter from Zappos’ CEO, Tony Hsieh, explains the reasons for the takeover.
Take care
David Chandler & Bill Werther
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Zappos says goodbye to bosses
By Jena McGregor
January 3, 2014
The Washington Post