Zappos, the Las Vegas-based online shoe and clothing company, adopted a radical management system called Holacracy in 2013. The system, which eliminates traditional managerial roles and hierarchies, was implemented to encourage employees to take more responsibility and drive innovation. Zappos’ CEO, Tony Hsieh, was inspired by the book “Reinventing Organisations” by Frederic Laloux and believed that the system would foster a culture of entrepreneurship within the company.

Holacracy divides the organisation into self-governing ‘circles’, each with its own purpose, accountabilities, and roles. Employees can belong to multiple circles and are empowered to make decisions within their defined roles. The system promotes transparency, with all meeting notes and decisions made publicly available.

Despite initial resistance, Zappos provided extensive training and support to help employees adapt. The company even offered a three-month severance package to those who chose not to embrace the new system, resulting in 14% of employees leaving the company. Despite these challenges, Zappos remains committed to Holacracy and believes it will lead to long-term success.

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