Zappos, Holacracy, and David Simon’s The Wire

What do Zappos and David Simon have in common? It seems to me they both see outdated, broken systems as endemic to today’s world, and are both doing something to change it. David Simon created The Wire, which is the most scathing portrayal of the American socio-politic infrastructure and systems that has ever aired. Zappos is changing their organizational structure, choosing to adapt a “holacratic” approach. Don’t laugh, this is significant stuff.

(Also, don’t worry, if you haven’t watched The Wire, I think this article still will make sense. Also, if you haven’t watched The Wire, please go watch The Wire. It’s wonderful. I wouldn’t steer you wrong).

Throughout The Wire we see people handcuffed (and destroyed by) our archaic systems. This is a show, at it’s heart, about systems which are decaying. The police department, the mayor’s office, city politics, our educational system, middle class laborers, and the newspaper media are all systems which he explores in depth over the course of the five seasons of the show. David Simon shows us very clearly how each of these systems fail everyone involved. We see these failures over and over, and no one is spared from the wreckage. It is deeply painful to watch. We also see what happens when people try and make incremental changes within those systems (hint: it isn’t pretty). A teacher is forced to use 5 year old textbooks to “teach to the test” instead of engaging his classroom to learn, failing the students, the community, and everyone involved. The work has dried up for dock workers, forcing them to turn to other means of supporting themselves, destroying lives in the process. Wanting to change the world is no longer something for a politician to strive for — doing what it takes to get re-elected is. The city suffers. There are countless examples of these systemic breakdowns throughout the show.

An officer attempts to create a free zone for addicts and dealers to use freely, without police intervention, in order to clean up the rest of the neighborhood, which has been blighted with drugs, shootings, and the decay of social and moral fabric. He of course does this without anyone else on board, after looking back on a long life spent working within this broken system without making the slightest impact. An entire life! Devoted to trying to keep people safe, without having making a difference. That is bleak. You can guess how this innovation ends for him.

So what does this have to do with Zappos and Holacracy? One of the fundamental issues that organizations face as they try to be resilient, adapt, and thrive is how to create an organizational structure that will nurture this innovation and resiliency — how do you create the framework to feed these things and allow them to grow?

I strongly believe you need your business to operate like an organism within a larger system — adapting to the environment, growing when there is an opportunity to grow, shrinking when necessary. This is how organisms operate in nature. This is biomimicry at work in your organizational structure. What do we know about systems in nature? They endure. They change. They grow. They shrink. But, unless we come in and destroy them, they are resilient and endure.

So how do eliminating roles fit into this world? We would be replacing a top-down tower with a flat organization without titles and pre-defined roles. We would allow people to bring their whole selves to the workplace, and help where the help is needed at the time it’s needed, increasing efficiency, without the “that’s not my job” attitude. We would get input from as many people as possible instead of the “hand-picked team in charge of the project.” We might have people working on the things that they are truly interested in and love doing. More people will understand more things that happen in the org — and can point out where improvements may be made or efficiencies achieved. There is less danger of esoteric knowledge leaving the company if someone walks out the door, as more people can be aware of how things work. Can you imagine never having to talk about getting “buy-in” again? How much you could get done if you were just free to make decisions and then learn from them as you go, not needing to get every move double-stamped with approval? How much smarter your organization would be if you were tapping into the potential of all your people? If you were actually building and honing creative thinking skills in your community, constantly practicing working together to get the best possible outcome? In theory, this approach should greatly increase the resiliency of the organization.

We like to say “people are our most important asset.” Then we shoehorn people into pre-determined roles. This approach is a way of saying “we actually believe that people are our most important asset.” This is classic walking the walk.

There will be issues that arise from this, some easy to predict, and some unintended consequences. Is holacracy perfect? Decidedly not. Will work for everyone? Again, decidedly not. The holacratic organization will put a huge strain on the people who need to select talent and hire people. Not everyone will want to work in this environment, and selecting talent will become even more important, as this workplace will be unlike any the candidate has worked in previously. Some may grow frustrated with the lack of clear guidance and roles — and there won’t be an HR department to talk with about what to do. There might be legal concerns about firing, (if there are no roles, how can you say i didn’t live up to expectations?) people may become bitter about pay increases (or lack thereof!) if they don’t feel they are being judged properly. In short, there will be things that are difficult about this. And there isn’t going to be a roadmap to follow, no HBR articles to read, for what other similarly sized organizations have done to overcome these issues in the past, as this is all brand new.

There is going to come a time, probably shortly after the launch of the new approach, that everyone is going to get frustrated. It will be new. It will be different. It will feel uncomfortable. The bloom will be off the rose. And that will be the crucible for this community — will they take that discomfort and tension, hold it, and work through it together to become the organization they want to become? Or will it bog them down and drain everyone to the point that they are ready to walk out? If they have the right people in place, and there is a strong nucleus who are willing to listen, push, pull, and strive to create something unique, they will be able to take that company further than it’s ever gone before. How? They will be able to respond to an ever-changing environment swiftly and decisively. They will have experience working through that crucible, and will not be afraid of changing winds. They will have 1,500 (or so!) people with the pulse on the company, the marketplace, and the systems they are embedded within instead of 5 or 10 on the executive team. People that can’t handle working in that environment will presumably have been selected out, allowing the organization to grow stronger.

This is bold, innovative thinking — put into practice. The type of bold the world could use. We need structures that match our times. There is so much broken about the world we inhabit. We have a duty to make it better everywhere we can. We can’t rely on old methods to get us out of the flawed world we have built. I can imagine Mr. Simon reading this article and getting ticked I compared the impact of his art to a shoe company. If Zappos can make it work and lead the way on deep systemic organizational change in a very public way, just think what a non-profit might be able to accomplish if they adopt this approach and didn’t spend their time, effort, and resources on inefficient internal processes that are almost always present in top-down organizations. Now imagine thousands of those non-profits getting exponentially stronger, more resilient, and more efficient at delivering services. That could create powerful, lasting change.

I admire Zappos for taking this on, and I deeply hope that they are successful.