Zappos to employees: Get behind our ‘no bosses’ approach or leave with severance

http://www.washingtonpost.com/blogs/on-leadership/wp/2015/03/31/zappos-to-employees-get-behind-our-no-bosses-approach-or-leave-with-severance/

by lambtron • 11 years ago

52 83 11 years ago

washingtonpost.com

tw042• 11 years ago

Zappos CEO Tony Hsieh

Oh the irony. So basically what I gather is Zappos is trying to find a way to drive down the salary of all employees by removing their titles. Except for the executives... because you HAVE to have executives, even with fuedalism... er... "holacracies".

Hsieh's memo says they will keep their salaries through the end of 2015 and will get guidance for reinventing themselves into new roles at the company.

Yup... "We want to gut all the high paying jobs from our organization by giving the rest of you the job your managers had before. Hope you enjoy the additional job titles, we won't be increasing your salaries".

moron4hire5• 11 years ago

Look at yesterday's top topic here, the new Facebook office "largest open floor plan office, ever". This sort of disrespect, this sort of complete dehumanization of the worker, it's the new normal. "Our employees are our greatest asset" is just something to print in the employee manual.

nostrademons5• 11 years ago

Eh, I don't see any problem with either open-floor-plan offices or with a lack of managers. And I assure you, I'm quite human. The main reason I wouldn't want to work for Zappos is because I don't give a damn about shoes.

These sorts of moves are usually filtering functions on the types of employees you employ. They'll encourage everyone who doesn't fit the company culture to quit - which, ultimately, makes the company stronger. The beauty of our market economy is that you don't have to work in a company whose culture you find offensive, you can find one whose culture is more to your liking.

AlexEatsKittens• 11 years ago

Could you expand on that thought a little? I'm not clear how Facebook's open floor plan is dehumanizing.

freyr3• 11 years ago

This sort of disrespect, this sort of complete dehumanization of the worker, it's the new normal.

When you decide to work for a CEO who called his own users "dumb fucks" for using his product, I'm not sure you should expect respect and humanization from the top.

mc322• 11 years ago

I had the same reaction. But I think it makes sense. It's basically a distribution center with some good customer service, so there is little use to people adding more value and climbing ladders. Meaning they only need what are essentially entry-level employees. Jobs which in yesteryear would have employed students... But now employ the undereducated instead.

At least they doing it in a nice way. Sure it hides what they are really doing by making out to be something different and fancy, but they are giving the atheists a way out, instead of going for their head (count)s.

Sanddancer• 11 years ago

I disagree. Interesting people can and do work through the ranks at companies. Additionally, a good manager is someone who can encourage and help a mediocre employee become a good or great employee. A flat team means that everyone is stuck doing the same repetitive job, and there's no one /to/ go to to discuss issues who has a bit of detatchment.

smsm424• 11 years ago

Amazon was a bookstore. Now they are much more. Nothing says Zappos can not so the same, at least in theory.

tw042• 11 years ago

So when Jenny in marketing makes a new deal with Adidas and promises to have their newest shoe out the door in a week, James from shipping has to stop doing his job shipping things... to have a meeting with Jenny, and then Adidas, to explain why they aren't able to meet the timeline?

To suggest that managers aren't needed because the "group can just do it", is absurd. EVERY company has multiple departments in charge of different areas of the business. The job of a GOOD manager is to insulate the "do-ers" from having to deal with other areas of the business so they can focus on doing their actual job. Removing that title and "giving it to the group" sounds like a good way to create a lot of busywork to save a few dollars. And I can just imagine that the employees are expected to still get all of their normal work done - which means working after hours to have the meetings they should be having during the day, but can't because they're doing "their day job".

Maybe zappos has some crazy unique structure to how they do business, but I'm skeptical.

codeonfire• 11 years ago

When you say high paying, keep in mind the jobs you are describing are $250-1000k jobs where everything (work, risk, and blame) is delegated down to the grunt level anyway and attendance is probably 50% at best.

rdtsc• 11 years ago

. So basically what I gather is Zappos is trying to find a way to drive down the salary of all employees by removing their titles.

Sounds like you've worked in a "flat" organization ;-)

zobzu• 11 years ago

You could also keep the same salary for executives and share the savings across the employees.. which is probably what is being done.

So sure, that makes the gap executives-employee seem bigger, but in reality its the same. With the advantage of a flatter hierarchy.

For I have experimented some of these, I found it way more enjoyable than having 3 to 10 bosses on top of me, where you consistently spend your time:

- covering your ass

- covering your boss asses

- discussing in meetings until another boss comes over and changes everything

- having to do whatever the manager decides if its a bad manager, even thus its against the team opinion

- discussing in meetings until the boss that isnt in your range of bosses decides a political coup (approx every 6month)

- etc.

Ie, corporate life of a low-end employee.... yeah zappo's hierachy isn't near as bad as you make it to be, in fact - and while im sure its company depend, it seems rather enjoyable.

pinterestaway• 11 years ago

Zappos sounds pretty good to me. I work in a similar environment and I love it. There is so much joy in going to work and being your own boss and sharing in the company success. Yes, I have a manager, but my manager doesn't (can't?) tell me what to do or what to work on. My manager acts as a coach/facilitator/personal-agent instead of manager-as-god. It sounds unworkable until you work at a place that executes it well and now I can't imagine going back to a traditional corporate structure.

I'm not sure what the pre-reqs to executing it well are. Probably benevolent-ruler CEOs who own enough of the company to keep anarchy from developing (e.g., Gabe @ Valve). Or at least investors who are willing to get on board.

nostrademons5• 11 years ago

It's interesting that Larry Page also tried to have a "no manager" organization, when Google was in its infancy. The experiment was a disaster, and employees asked to have managers reinstated.

smsm424• 11 years ago

I have always considered a good manager to be a service to me as an employee, not a burden. Luckily, most of them were. When they stopped to be, it usually proved a good sign to look for the next gig, because something is rotten in that kingdom.

trhway5• 11 years ago

who is going to write performance reviews? Titles or no titles, whoever writes your review is your manager.

tbrownaw4• 11 years ago

I think this kind of system usually gives that to a committee. Which is either elected, or drawn from who you work with the most.

Or you write it yourself, and then it goes to the committee for grading.

trhway5• 11 years ago

Even with formal committees there is always somebody who is really in control. I grew up in the USSR, the country which was supposedly built on the idea of committees :)

rayiner• 11 years ago

There can be hierarchy without managers I.e. People whose primary job is managing other people.

Gustomaximus2• 11 years ago

Easy, take a 360 approach to reviews from those you work with during the year regardless of title or lack of. IMO this would be more valuable than only having one managers viewpoint. And as a bonus this would cobble those annoying employees that focus on managing up only.

oh_sigh3• 11 years ago

Even if you're looking 360 you still know whether you are looking up or down.

letstryagain• 11 years ago

Valve has the 'Gabe / Everyone Else' structure. They seem to make it work ok. Performance reviews are written by your peers, usually people who worked with you in some way recently.

http://assets.sbnation.com/assets/1074301/Valve_Handbook_Low...

joezydeco2• 11 years ago

Jeri Ellsworth (ex-Valve employee) will disagree with you here.

"There is actually a hidden layer of powerful management structure in the company," she claims.

"And it felt a lot like High School.

"There are popular kids that have acquired power, then there's the trouble makers, and then everyone in between. Everyone in between is ok, but the trouble makers are the ones trying to make a difference."

http://www.develop-online.net/news/valve-s-perfect-hiring-hi...

mcphage• 11 years ago

Valve has the 'Gabe / Everyone Else' structure. They seem to make it work ok.

Except for the whole Half Life 3 issue. The fans have been clamoring for it for years, presumably someone in Valve wants to make it... but the company has been unable. I don't know if it's they've been unable to keep a project going strong before the team splintering, or there's several competing internal projects, or if there's one which is being unmanaged and so is growing unboundedly, or something else entirely. But something's going wrong there.

marssaxman• 11 years ago

If a company is big, old, and sclerotic enough to have a formal performance review system, it's time to get out and find somewhere less soul-sucking to work.

(only somewhat joking.)

litha• 11 years ago

So screw over anyone in a lower position than director. Next up, no more hourly employees so they can work then without overtime pay. (oh wait that is now standard)

mblevin• 11 years ago

The real question for me is: Has Tony Hsieh completely lost his fucking mind, is this the future and we just don't know it yet, or is this all part of some elaborate plan to fire everybody or stage some sort of internal company cleansing?

Seriously - somebody please tell me.

I don't get it.

vasilipupkin2• 11 years ago

so what happens when there is a successful business, often times people running that business think that just because they've had some good ideas and successes, all their ideas must be good and profound :) I don't get it either, but maybe I am wrong

vasilipupkin2• 11 years ago

I just love this:

"A new circle called Reinventing Yourself has been created to help guide former managers to new roles that might be a good match for their passions, skills, and experience. Hollie is the lead link of that new circle"

So, Hollie is a manager of managing former managers' efforts to no longer be managers ?

tbrownaw4• 11 years ago

It's the natural result of all the hippies growing up and finally reaching "management consultant" age over the last 10 years or so. ;)

There's always been a handful of smallish companies where everyone is skilled enough and get along well enough to not bother with traditional management. And because everyone is highly skilled and play nicely together, they tend to do very well. And since they do so very well, the obvious difference (lack of standard management roles) is obviously responsible and becomes a topic for fad business books and expensive seminars.

kenko• 11 years ago

As usual, Maciej was killing it:

https://twitter.com/Pinboard/status/582619098921603072 "Anyone claiming there is structure, management, hierarchy, concentration of power or obstacles to freedom at Zappos will be summarily fired"

https://twitter.com/Pinboard/status/582628592179232769 "We’ll know that Holacracy truly works when even the lowliest janitor at Zappos can threaten to fire everyone for not reading a certain book"

smsm424• 11 years ago

Firings will continue until morale improves!

geofft2• 11 years ago

Metafilter linked to this Re/code article about the holacracy yesterday:

http://recode.net/2014/10/03/holacracy-or-hella-crazy-the-fr...

A couple friends and I were talking about whether this is a cult. I said it was missing a religion, because it had optimized out the unnecessary parts of a cult. Another said it was the religion of messianic capitalism.

eropple• 11 years ago

So ordinarily I'd just upvote this comment (and I did), but...this article is so eye-poppingly terrifying that, if accurate--and I have no real reason to believe it's not, it's written in the most kid-gloves style I can think of--makes me genuinely worried about everyone involved.

Work is a social phenomenon. People aren't robots. What the heck are we doing to ourselves?

geofft2• 11 years ago

If you're not worried enough, see the prior article about the suicides.

http://recode.net/2014/10/01/the-downtown-project-suicides-c...

Fortunately, some smart-thinking entrepreneurs are there to, uh, disrupt depression with a startup mental health clinic and a startup church. Or something.

joezydeco2• 11 years ago

Most cults and religions are much more organized. One comment on Mefi yesterday caught my eye:

"I heard about that memo a week ago. It is a total shitshow over there. The worst is the customer service reps, who now set their own schedule. As a result, nobody is there during peak hours"

Considering that Zappos' customer service is pretty much their claim to fame, this is going to get interesting real fast.

I've also seen some mentions that Zappos was adopting a "surge" pricing system for hourly employees to entice the reps to work the less desirable shifts. I'm really curious about this part.

jackmaney• 11 years ago

Holy crap. Zappos sounds like the unholy spawn of a pyramid scheme and a cult.

cowardlyLion• 11 years ago

'Tis true. I worked there. They notoriously pay poorly and the only people who move up to better pay are FOTs Friends of Tony. All of whom have been there for a minimum of 10 years. BTW-Tony has not changed his title on his LinkedIn, email or business card. He is still CEO. The rest are titleless and looking for other jobs.

We had 3 suicides last year by entrepreneurs tony invested in and took under his wing here in Vegas as part of the Downtown Project dystopian hell he makes zappos employees live in here.

Cult. Pure and simple.

msoad• 11 years ago

My company does this "no bosses/titles" bullshit too. We have, of course a CEO, there is a CTO and a VP and a director of engineering and then me. When I ask for a promotion to Principal Engineer from my current Senior Software Engineer role(that was on my offer letter) they say "we don't have titles"!

It's all bullshit and there is always a hierarchy. My company did it really badly by letting my bosses put titles in their LinkedIn profiles, Zappos may do better in that regard but there would always be someone who overseas you. As other comments mentioned the irony is "the CEO" said all of this!

andreasklinger2• 11 years ago

The problem is imho we as society are still shitty in management of knowledge workers:

- we still think in titles (hierarchy) vs roles (context) - eg someone can have the role product strategy and that gives him ownership about certain decisions

- we still thinking of "managing people" like of "managing resources" vs setting up processes and communication when processes fail

tbrownaw4• 11 years ago

So, I'm one of the more highly-skilled developers working on X. I'm also needed to help troubleshoot some emergency on Y for a week.

Someone has to figure out schedules priorities and whatnot. But I don't give a $#@% about that sort of boring people-stuff, because I only care about interesting technical problems.

How does this get handled?

People do not always follow the same process over and over again. When they do, that's an excellent candidate for automation.

People can have multiple interests and skill sets, but those won't always include negotiation and constraint optimization. Those tasks still have to get handled for everyone, even the people who won't handle them for themselves.

There will always be hierarchies. There are at least two fundamental ones: skill, and scope. Neither maps exactly to management hierarchies.

mgmtbs• 11 years ago

I worked for a company with a 'flat' hierarchy. There was actually a secret hierarchy, and I got pushed out for defying the secret hierarchy. The structure allowed the 'managers' to avoid any accountability.

snowwrestler• 11 years ago

This is actually a fairly old and well-known idea, first proposed in the 1960s.

"this apparent lack of structure too often disguised an informal, unacknowledged and unaccountable leadership that was all the more pernicious because its very existence was denied."

http://en.wikipedia.org/wiki/The_Tyranny_of_Structurelessnes...

People interested in ultra modern flat management structures would do well to look up the history of communes, collectives, and other experiments in self-organizing.

kirsebaer• 11 years ago

Isn't there often "informal, unacknowledged and unaccountable leadership" hiding within traditional hierachical structures? It's often not fully apparent from the organizational chart who has real power and influence.

smsm424• 11 years ago

Also see https://en.wikipedia.org/wiki/The_Sirens_of_Titan

Specifically about Martian colony and how decisions were made there.

trhway5• 11 years ago

The structure allowed the 'managers' to avoid any accountability.

Privatizing power while socializing accountability/responsibility :)

paulhauggis• 11 years ago

Since there are 'no bosses', why does Tony Hsieh have a title like 'CEO'?

trhway5• 11 years ago

why does Tony Hsieh have a title like 'CEO'?

even the ultimate flat organization - Borg - had Queen. The rest - no titles, just roles, and pride themselves on efficiency.

Thinking about it, one can see how modern "open office in the name of collaboration/communication" is just a cave man's replacement of Borg neural field generators for mind-to-mind connection

michaelchisari• 11 years ago

There are democratic, non-heirarchical corporations out there, like Mondragon.

They grew a bit more organically than this, however, so the structural result is very noticably different.

mercer• 11 years ago

They grew a bit more organically than this, however, so the structural result is very noticably different.

Perhaps this is similar to the often stated reason for 'failed' democracies: they need to grow rather than be forced upon a population?

Gustomaximus2• 11 years ago

How will they handle accountability without bosses? Decisions are likely to get made by the more outspoken or celebrity personalities. How will they accurately identify weaker decision makers in this category as where they spread influence is a 'group decision'. At 1500+ employees this could easily end up into some political minefield of power struggles and blame/credit games.

nazca• 11 years ago

I think it is pretty clear Tony Hsieh isn't the right person to lead Zappos at this scale. His craziness got it to where it is today, but what you need from a CEO changes with scale.

pmcg• 11 years ago

Does HN need a top banner saying that it's April 1?

michaelochurch2• 11 years ago

Even though I support open allocation, I don't really believe that "no managers" works at all. I think that it's an overcorrection.

You need management, but what you need is a constitutional workplace where there are real protections (e.g. people have the right to choose the team they work on, within reason, and performance reviews are for compensation upgrades only and not part of the transfer packet) that employees get to vote on and that limit management's power. I'd even consider extending that to a profit-sharing model that's more transparent and fairer than startup equity, which is based on some insultingly small percentage of some possibly-huge-but-how-would-you-evaluate-that number in the future.

There are several problems with "no managers". First, many tech companies tell every engineer, down to the junior coming out of college, that he'll be reporting directly to the CTO. Then he gets there and learns that he will actually be evaluated by his tech lead, who answers to a (possibly titled, possibly not) full middle manager... who answers to the CEO. It's dishonest as fuck, but really common in the startup world to use "flatness" to make a position sound closer to the action and to power than it actually is. "Flat" organizations are often alluring lies that hide the real power structures. It doesn't matter if Bob is an idiot who works 15 minutes per week; if the CEO will take Bob's word over yours when it comes to your value to the company, then Bob is your boss.

Second, if there are going to be power relationships anyway (and there are) it's better to answer to a titled manager with a completely different job description, than to someone who's technically same-rank and therefore also competing with you for work. You won't win in that situation.

I'm skeptical because I feel like managers are akin to cops. There are some really shitty cops out there, no question. But you need them, because the alternative is... that a police-like force emerges (organized crime would rather have order than violence) but it's not accountable to the public and the costs are erratic. With public police, you pay taxes and can vote officials out of office if they make bad calls. With emergent private police (thugs) the extortions and bribes can go up from day to day for any reason or no reason at all.

What's wrong in most companies is that the police are making the laws, rather than enforcing them for public benefit. Because most companies don't have any constitutional structure or real protection for workers, the law is "if you have power, you can do it" so middle management ends up making the law up as it goes, in pursuit of its own interests (maintaining and consolidating power). Management is a fine concept if management is put in its place and empowered to enforce but not legislate. I don't know how to put this into practice. It's hard, because you have to fight human nature.

In other words, the problem is the lack of constitutionality in corporate governance. Corporations are pretty much all run as dictatorships. That can work surprisingly well (in terms of efficiency and competitive supremacy) when the dictator has something unique to offer. It ages poorly, because the dictatorial role gets handed over and eventually it's in the wrong hands and everything goes to hell. Imagine what would have happened to Singapore if anyone other than Lee Kuan Yew had been in that position. Dictatorship only works when you have a very rare type of mind and get a true philosopher-king. (It's not about pure intelligence, either. It takes charisma and focus, too.) That doesn't describe most corporations or corporate leaders. For the most part, this dictatorial model leads to low morale, stagnation, and mediocrity.

That's why people hate management: we've all picked up that it's serving its own interests rather than that of the employees or of the company. All of this said, "no management" tends either to produce an emergent and less accountable management/police force or it tends to mean that power is concentrated at the top. So I tend to think that this "no more bosses" movement is somewhat of an overcorrection.

kyllo• 11 years ago

I agree that official, legible management structure is usually probably better than the unofficial management structure that will naturally emerge in a supposedly "flat" company.

You mention that most companies don't have "constitutional structure," are you talking about an employee bill of rights?

What would you think of the idea of running a company literally like a representative democracy? A constitution and bill of rights, management as elected officials, employee "voter initiatives", projects compete for talent internally etc?

It might not be perfect either, but perhaps a good middle ground between militaristic top-down bureaucracy and Zappos-style anarchy?

michaelochurch2• 11 years ago

Yes, an Employee Bill of Rights.

The middle ground you described is a brilliant idea. What you probably need to enforce it, at first, is an enlightened dictator (i.e. the 1% who won't get power-hungry and fuck everything up).

Zappos to employees: Get behind our ‘no bosses’ approach or leave with severance

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