Zappos’ City: Passport to Success – Part II

In Part I of this two-part interview, I took a step back in time with Chris Peake, Director of Strategic Initiatives at Zappos, to see how their responsibility-based structure came to life and how it’s changed in the complex world we live in.In Part II below, we dig deeper into how other companies can incorporate a responsibility-based organizational structure (RBO), and how mentorship, training, the interview process and mindsets must shift in order to be successful with new and emerging organizational structures like Zappos’. Q: In a responsibility-based organizational structure, what does mentorship look? Is it different than in a top-down structure? A: It is. It also invites people to reach out to different areas. After we read Reinventing Organizations, it showed us how important the advice process was in self-organized companies. If you don’t have a manager or a Lead Link that you can count on to go to for advice, you automatically have permission to go to anyone in the company you want to seek advice from. You can cast a net as wide as you want. In self-management, it’s up to you analyze all of this data and make the right decision based off of what you think (the authority you have in your role in Holacracy). It’s getting rid of consensus-building and people voting on things and puts the onus on people making the right decisions for their businesses. Q: What advice do you have for other companies who might want to implement Holacracy at their organization? Do you have any tips for creating behavioral change and transforming the organization to have a learning mindset? A: The biggest advice I have is to listen to your employees. Often times when there’s a bunch of leaders making decisions on behalf of the company behind closed doors, they don’t know the tensions, opportunities and roadblocks people have inside of the organization–that’s going to cause constraints. We’re dealing with 1,500 people in the company with about 500 teams that range from clubs, to passion teams, all the way to real e-commerce and service-related businesses and everything in between. Each of these teams have different tensions, opportunities and working styles and we need to be cognizant to those needs.We learned this the hard way through our journey in Holacracy and Teal, and still learning that today through market-based dynamics (MBD). It’s really important to understand where your employees are having problems, and also understand that you can’t just adopt a system and expect everyone to get it the next week. You need to get people involved with the co-creation process and give them a voice. Also, ask “what is one action you can take to move Holacracy (or any other system) forward?” You don’t have to worry about all of the components of self-organizations/self-management at once. What’s the most important one you can start working on now to build momentum? Breaking things down into bite-size chunks will ultimately help you build success in the long-term.Lastly, what can you do to create the minimal number of constraints that enables your employees and teams the maximum freedom, but also maximum accountability? For us, we created the “Triangle of Accountability,” which essentially means that individuals and teams could do whatever they want so long as they simultaneously 1.) drive our culture and core values forward, 2.) deliver the very best service and experience, and 3.) break-even on their Profit and Loss statement. That’s it! Q: How do you train employees in Holacracy and how do you think Holacracy has empowered your employees to make decisions? A: I want to be clear–not everything is butterflies and rainbows. Even today after years of practice and trying to constantly evolve systems, processes, and mindsets to be more aligned with what we want to be when we grow up–there’s still a lot of challenges in helping people process the right tensions and figure out where to go in the company for even the simplest of things.We have this new system that allows anyone in the company to process an opportunity or constraint, yet many people still don’t take advantage of it, whether it’s from uncertainty, fear or something else blocking them. You can’t just assume people are going to do it because it’s there. It’s ongoing education. It’s constantly meeting people where they’re at in their journey, trying to figure out how you can support the organization rather than just falling in line.It’s a lot of active work–being actively present and visually available for people. It’s asking questions to figure out where and why people are stuck. Even if they are advocates and have done a lot of work, there’s always a new challenge that lies ahead - we try to determine how we can help them remove roadblocks that they (and sometimes we) didn’t know existed. Q: What about new hires - how do you weed out people based on their mindset? How has the interview process changed? A: It’s not just a Holacracy and self-organization thing we’re looking for – it’s asking the question, “Does this person fit our company culture?” We hire based on culture and performance. If you fit these two things and the team that is hiring you believes that you’re the right fit, you’ll learn whatever process they have and you’ll probably learn them fairly quickly. It’s still very much up to the team to hire the right people, but our recruiting team, who go through thousands of applicants, have changed their questions to see how entrepreneurial people are; if they have a growth mindset versus a fixed mindset; if they’re more traditional or open to change. They’re asking more direct questions than what we’ve traditionally asked. They’re also taking it to another level, seeing how we can hire people that maybe have more business/finance acumen, for example. In the past, people have been hired to build widgets, not to run a business–it’s a unique way of thinking. We have to educate internally and hire for those things as well. Q: With no job titles and no managers, what does the standard business card look like? How do people present themselves in different roles? A: In this ever-changing world where you’re constantly responding to the needs of the organization, you might have set experiences and core competencies, but your roles are constantly changing. Digital is my saving grace. I met an external client who asked if I had a business card, I said nope! But I’ll send you an e-mail with all the roles that I have.In our HR database I have a specific title (as you see on this interview) because ultimately when you’re talking to a vendor community or a buyer, you’re not going to say you’re a ‘magical buying guru.’ They want to know who they’re talking to. External/internal titles are important for engaging with the external world. Just because we get Holacracy doesn’t mean the entire world gets it! But on the flipside, we have a team known as “Fungineers”– they’re the team that puts together events on campus and works with external clients. It’s fun and quirky when they explain what they do, so that’s the same both internally/externally. Q: Are there other companies that you connect with specifically related to RBO? A: We do a lot of networking at conferences–as a team, we go to six or seven a year. We even just hosted the Responsive Conference on Zappos’ campus with a lot of like-minded HR professionals and businesses looking to take their organization to the next level. It’s fun to see what the world is doing in a collaborative environment like a conference.We also talk with a lot of companies around the world that are doing some sort of self-organization or great things in organizational design. For example, we’re making plans to meet with Haier, a Chinese appliance company, next year. They’re doing things like we are but have different components. Like most companies, we’ll meet up with them initially, then do check-ins every now and again to see how things are changing on both sides. There’s no one company/individual we go to for consistent advice though, it’s kind of like–what’s the world doing? Can their approaches work in our environment? What tools and mental models can we experiment with to build and heighten our own system(s)? The way we think about things is so different from the way other companies think–it’s often difficult when we go to conferences or workshops. Organizations say they’re five to eight years behind us, so it’s hard as leaders in this space to continue paving the way, but we’re also continuously trying to collaborate with others in the space that are doing interesting and different things. It’s more of a community than specific relationships and every business has something great to offer, especially if you keep your ears peeled and your eyes open to new and better ways of doing things.

Zappos’ City: Passport to Success – Part II

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