Is Zappos in Trouble?

Zappos is a model of transparency for other organizations, from their customer service to their company culture.

Customers can learn anything they want about Zappos, because they provide almost all of their company information on their website. They don’t hide anything.  They have specific Core Values that go hand and hand with making the customer happy.

In company culture, Zappos was repeatedly listed as one of the best places to work, but recently, they didn’t make the cut.  Zappos went holacratic back in 2013, which means that the authority and decision-making are distributed through self-organizing teams rather than being vested in a management hierarchy. This lack of structure, however, which seemed ideal, resulted in a 30% turnover among employees, a great deal of confusion, and falling off of Fortune Magazine’s best places to work list for the first time in 8 years.

CEO Tony Hsieh’s best intentions to achieve complete internal transparency, no longer seem to be working. Did they go too far by going “holacratic?”

Hsieh is not giving up on his goal, and now he is trying a new model, which is to go “Teal,” the ultimate holacracy, where all employees operate on self-management.

It’ll be interesting to see what happens to this successful company in the future and whether or not they’ll influence other organizations to come.

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