Zappos reorganizing with flatter “holarchy”

Always interesting to see successful companies experiment with new methods of organization. As companies grow in size, the lines of communication grow more complex. The hierarchical tree structure is the most commonly adopted solution, but it brings in a host of problems of its own.

During the 4-hour meeting, Hsieh talked about how Zappos’ traditional organizational structure is being replaced with Holacracy, a radical “self-governing” operating system where there are no job titles and no managers. The term Holacracy is derived from the Greek word holon, which means a whole that’s part of a greater whole. Instead of a top-down hierarchy, there’s a flatter “holarchy” that distributes power more evenly. The company will be made up of different circles—there will be around 400 circles at Zappos once the rollout is complete in December 2014—and employees can have any number of roles within those circles. This way, there’s no hiding under titles; radical transparency is the goal.

Looking forward to watching this play out.