(p. A1) Brironni Alex was so good at answering telephone calls and emails from customers at Zappos.com Inc. that the company promoted her to customer-service manager.
But when the online retailer adopted a management philosophy called Holacracy, she lost her job title and responsibility for performance reviews. Since the end of April, Zappos has zero managers to oversee employees, who are supposed to decide largely for themselves how to get their work done.
"I am managing the work, but before I was managing the worker," says Ms. Alex, 26 years old, now part of a team implementing Holacracy throughout Zappos. Ex-managers haven't been guaranteed another job and could have their pay cut next year, though Zappos says that is unlikely. Ms. Alex says the changes give her more time for a workplace diversity committee and to perform on the Zappos dance team.
The shake-up has been jarring even for a company famous for doing things differently. Earlier this month, Zappos said about 14%, or 210, of its roughly 1,500 employees had decided Holacracy wasn't for them, and they will leave the retailer.
They were offered at least three months of severance pay by Zappos Chief Executive Tony Hsieh, who wrote in a 4,700-word memo in March that the company hadn't "made fast enough progress towards self-management."
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(p. A10) Mr. Hsieh, 41, concedes that Holacracy "takes time and a lot of trial and error." He still has faith that the system empowers employees "to act more like entrepreneurs" and stokes faster "idea flow," collaboration and innovation, he says.
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Research shows that the value of flat organizations is mixed, though highly motivated workers who thrive on creativity generally are best suited for going bossless.
The results at Zappos will be watched closely because it has long embraced employee independence even while striving to meet exacting customer-service standards. "Delivering Happiness," a 2010 book by Mr. Hsieh, was a best seller and spawned a management consulting firm.
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"They are adopting Holacracy as more how to get to the next level, as opposed to how to fix something broken in their system, which is actually one of their unique challenges," says Brian Robertson, 36, the inventor of Holacracy. The term comes from the word "holarchy," coined by writer Arthur Koestler for self-organizing units that combine to form a larger organization.
(Note: the date of the online version of the story is MAY 20, 2015, and has the title "At Zappos, Banishing the Bosses Brings Confusion.")