We’ve heard the message about high levels of management incompetence so many times that, frankly, it’s getting boring! Despite years of work trying to upskill managers or recruit better managers we are in the same position with a recent CIPD publication reporting that the ‘quality of UK management has failed to improve in more than a decade’. So perhaps we need a more drastic change in thinking.
A successful American online shoe and clothing retailer, Zappos, may offer a fresh perspective to organisational structuring which could improve the situation – get rid of managers altogether!
What Zappos seems to understand better than most organisations is that to ‘WOW’ their customers (their very simple mission statement) they need to focus the business on culture and staff engagement. This is what Zappos have become famed for; their forward thinking approaches to recruitment, training, employee engagement and management.
One of the most radical decisions Zappos made was to do away with management altogether in 2013 and employ a new organisational structure called Holacracy. See its inventor, Brian Robertson’s TED talk entitled ‘Why not ditch bosses and distribute power?’ for his take on it.
Briefly, Holacracy is a democratic self-organising structure of interlinked circles (teams) where leadership and accountability are distributed.
Typically power in an organisation rests at the top and is distributed down. However this often leads to confusion about who is empowered to make which decisions and a significant problem in many organisations is that a lot of people can say ‘no’ but few can say ‘yes’. With Holacracy the power is distributed throughout and accountability for decision-making power is clearly defined to individuals according to the tasks they need to complete. Focussing on tasks rather than people means there is no longer a place for status, egos, politics or micromanagement – issues which often stifle change, creativity and satisfaction in traditional businesses.
Tony Hseih describes Holacracy as thinking of his company as more like a city – “Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation.”
Zappos’ HR lead, Hollie Delaney told a story in a talk for HR Vision which I thought displayed the principle behind Zappos’ culture and the idea of distributed authority perfectly. The story was about a call centre agent who spoke to a customer who wanted to return a pair of shoes, a fairly routine procedure which in many retail organisations would be set out in a clear script and process in order to maximise efficiency. In Zappos, however, call centre staff don’t have scripts or set procedures – just a simple mandate to do whatever they need to in order to ‘WOW the customer’. During this conversation the agent found out that the customer had recently lost her husband. The agent wanted to make things easier for this lady so instead of the usual process of the customer taking the parcel to a post office to send back to Zappos, the agent decided to get UPS to collect the parcel direct from the customer at no extra charge. He didn’t have to ask a manager’s permission to do this. That wasn’t all though. The agent wanted to let the lady know that someone was thinking of her so he organised for a bouquet of flowers to be delivered to her – on the company’s money not his own. What he didn’t know was that this particular customer happened to be a popular blogger. She blogged about how pleased she was with this personal touch to customer service and this turned into local and national news.
What this story identifies are the benefits of empowering the call centre agent, a ‘bottom of the rung’ employee, to make decisions and spend company money how he saw fit. It led to increased customer satisfaction and fab PR and marketing for the company!
So instead of struggling to solve the age-old issue of improving management in order to fit with the traditional organisational model, we should change the model itself.
