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The Pros of a Holacractic Corporate Structure

CopyPressers enjoy following the company evolution of Zappos. Delivering Happiness, written by Zappos CEO Tony Hsieh, was first on our list when we started the CopyPress book club. Its company culture and core values have influenced ours, which is why many around our office have been talking about its recent restructuring: Zappos will run as Holacracy, with no job titles and no managers.

According to Quartz, Zappos is trying to maintain its start-up feel and culture – with 1,500 employees.

A Holacracy is flatter than a corporate ladder and instead places employees into circles, and Zappos will have more than 400 circles by the end of the transition.

Zappos_logo-1Inc. Magazine explained that a Holacracy isn’t leaderless, but rather distributes leadership to each role. It comes from the Greek “holon” meaning “a whole that’s part of a greater whole.” One company that created a Holacratic culture assigned management duties to a different person each week. Think of it as the business world adopting weekly line leaders from elementary school.

While this system does require an adjustment period, there are a few key benefits to implementing a holacratic structure.

Increased Accountability

It always comes down to accountability. When an office has strong personal accountability, then projects are completed on time and in good quality. When there’s a lack of accountability then deadlines are missed and the atmosphere turns toxic.

I’ve seen accountability fail on both sides of the traditional corporate ladder. Employees turn on managers for not giving them enough time, enough instructions, or enough resources while managers blame their employees for not completing projects in a timely manner. Removing the corporate ladder in totality removes the ability to blame the class system for project failures.

Better Understanding and Communication

Oftentimes there are more symptoms to a toxic culture than just a lack of accountability – breakdowns in communication also lead to failure. When employees fully understand the responsibilities of their co-workers (and managers) they’re able to better manage time and assignments.

We’ve all had that co-worker who ran in demanding that you drop everything to help them with a project. Worse, we’ve also all worked with someone who had no idea what your day to day job was – even though you’ve both been with the company for two years!

Knowing what is on each person’s plate can help when adding more or asking for help. “Joe, I know that you’re working on X huge project right now, after you present it to the team on Tuesday, could you help me with Y?”

Personal Development and Growth

In its most basic form, a Holacracy gives employees a chance to gain leadership and management experience. Everyone in the circle has management duties and most take turns in exercising them.

Employees who would previously have to work their way up the corporate ladder are given the tools to be managers. They attend management meetings, they learn how a company operates, they have the final say on projects. If (and when) Zappos employees leave the company to go somewhere else, they’ll be highly qualified to lead.

zapposcultureThis is Company Culture

VentureBeat quoted Zappo’s Culture Coach David Vik about what culture really is. People tend to look at start-up culture as wearing pajama pants to work and drinking beer throughout the day, but those are just the perks. The culture lies in a company’s structure, accountability, and core values.

Zappos won’t maintain its start-up culture by giving their 1,500 employees marshmallow shooters, they’ll maintain it by constantly innovating and working to create a healthy environment with clear communication.

The road to success isn’t paved with bean bag chairs.

About the author

Amanda Dodge