How Zappos Adapts New Employees

Hsieh, founder and chief executive of Zappos. Photographer: Noah Berger/BloombergHsieh, founder and chief executive of Zappos. Photographer: Noah Berger/Bloomberg

When Mr. DeVonTae Brown showed up for the orientation for his new job, he virtually knew nothing about the management discipline of Holacracy.

According to him, he was sure it meant nothing, but three weeks into the online shoe retailer’s month long on-boarding slog, Brown has been converted into the avant garde management strategy.

The traditional office top to bottom hierarchy or structure has been replaced with Holacracy, which is a complete system for self- organization. Here employees do not take the usual job titles but, take on roles which helps in creating an autonomy over the work they do.

So far, over 300 organizations have dabbled with Holacracy at one point or the other in the last ten years, included in this list is a part of Washington state government, productivity guru, David Allen’s company as well. The largest and most popular company to embrace this philosophy holistically is Zappos.

After transitioning over the last 18 months, many accounts of this new means of running the company hasn’t been palatable. Not everyone at Zappos, the Amazon owned shoe retailers, shares the enthusiasm of the Chief Executive Officer, Tony Hsieh, of giving up the highly sort after positions on the corporate ladder.

Most of the company’s employees left rather than join the strange order. They were paid off with a severance pay equalling three month’s pay,

Just about 14 percent of the Zappos work force stayed on board, many expressing scepticism about how Holacracy will help their jobs positively.

According to reports, Hsieh, has extended an attractive buyout, which is known as the SuperCloud offer, to a smaller group of workers, giving them till the end of the year to make a decision.
Over 200 employees at Zappos had a taste of Holacracy and chose to opt out. The question remains; what happens to the new Zappos employees opting in?

The old two-week indoctrination orientation has since evolved into a four-week undertaking. After the first week, Zappos offers the new employees a one moth buyout salary if they want to opt out. Employees who came to work later than 7am are fired on the spot and were forced to take a final exam by passing 90 percent of the questions. Those who fell short were sacked.

Standard orientation now involves a two-week mandatory telephone training, even for jobs that are not customer service related.

Megan Petrini, the new-hire trainer said the reason for this training was to understand the culture which aids in understanding real jobs.

A new addition by Zappos to the already long orientation process, Holacracy education, takes place over a three day period. During the first official discussion of Holacracy, a three hour lecture comes up in the second week of orientation.

The word Holacracy at this point for the new employees is not so new. Everything about the process is exposed to the employee’s right from the job selection process.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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