Zappos Latest To Try ‘Boss-Free’ Office

office - working — Team-based management, or holacracy, is becoming a popular trend in business.
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This month the online retailer Zappos announced it will operate as a “holacracy,” a team-based “boss-free” office, by the end of the year. This unconventional management model has become a craze especially among tech companies and a Texas A&M University management professor says the technique results in higher performance.

Stephen Courtright, a management professor who specializes in employee empowerment at Mays Business School, says holacracies work because, instead of the traditional boss-employee hierarchy, workers function in self-governing teams and are empowered to make key decisions. Courtright says this decentralization of power encourages innovation and results in happier, more empowered employees.

He notes in the year 2000, 80 percent of Fortune 1,000 companies had team-based structures.

“In a traditional office hierarchy, employees report to a boss higher in the chain of command. But in a holacracy, your most important boss is your peer. And you, in turn, are your peers’ boss,” explains Courtright, whose expertise also includes leadership development and team effectiveness. “It’s a form of self-leadership where everyone can feel like a leader.”

Of course, bosses don’t just disappear, as Courtright, co-author of several studies on self-leadership and employee empowerment, clarifies: “Companies, of course, have owners and there is still management in place. But instead of having to check with the boss on every decision, this is a style of management in which employees are given the information and tools they need to make important decisions without having to check with the boss first.”

He says Google is a great example. “They structure people to be on self-managing teams. They also allow 20 percent of every employee’s work-time to work on their own ideas. So, even employees on the lowest rung of a company can contribute ideas that can become huge. Many work on designing new apps; they’ve come up with very successful apps like Google Maps.”

Courtright says the model can work well in manufacturing, too. “These companies are traditionally hierarchical,” he notes, “but some have given workers on the floor more room to be creative, make improvements in product quality, and make decisions without having the boss breathing down their necks.”

He says to get a holacracy rolling, “it requires the entire company to be on board.”

And hiring the right people is critical, he adds. “You don’t want a person whose goal is to climb up the chain of command; a boss-less organization is not for them because there is simply less room to move up. Instead you want someone that measures success by the quality of the work they get to engage in “work that is both challenging and creative.”

Also it works best with employees that are “high on agreeableness,” notes Courtright. “It’s important to have people that can function well on a team, as your teammates — the people you’re working with day-in and day-out — are now your bosses.”

Not all industries can flourish under the model, says the researcher, pointing to fast-food as an example. “In a fast-food chain where you’ve got a certain set of processes that have to be followed by every employee and you want to have a product that is equal from one place to another, it may not work very well. It is far more likely to work in more fluid and dynamic businesses.”

Courtright says he hopes more businesses consider holacracy because, “when employees feel empowered, it’s better for individual employees and for teams collectively in the organization. Consequently, it’s better for the company as a whole.”