Reaction to the Zappos “Double Down” Offer for Self Organization

This week, the news broke about Zappos’ “double down” on self-organization via an offer for employees to get on board with this model and the company vision, or find another board to get on (w/ a generous severance package to support that transition). To the media outlets and Twitterers searching for the most controversial lede, this will start a discussion around the merits of Holacracy and whether this is a PR play, sign of implosion for Zappos, or necessary voluntary lay off (hint: it is none of these). In reality, this is not a debate about Holacracy, which is just one of many tools for self-management and organization. It is a bold thrust away from the world of work as we know it, and from outdated structures that serve industries and mindsets of the past.

About 2.5 years ago, I packed up my things and moved to Vegas to found a startup focused on bridging the gap between education and employment. Tony Hsieh invited me to do something risky, that I wouldn’t be able to do with a traditional investor, and to use all of the crazy ideas I was exposed to as I worked on the initial design of a Learning X PRIZE, to try and create something that would empower self directed learners, build a bridge between higher learning and employment, and support a growing local talent pool of life-long learners. Today, that has taken the form of credentialing work-relevant skills and learning using a spin-off of the MacArthur Foundation’s Open Badges model. This system provides transparency in skills required for specific roles, as well as a mechanism to offer self-directed learners a pathway into new opportunities for growth, based on their passions and preferences. It also is a tool to support the model of self-organization being championed at Zappos, which lies at the heart of the recent offer.

I remember meeting with 2013 TED Prize Winner Sugata Mitra at MIT Media Labs a few years back and being completely inspired by his work in self-organized learning. He eloquently laid out the argument that our schools and organizations were designed to teach the skills that were needed by business and society ~200 years ago. Our current Education and Employment systems and practices are the result of something Elon Musk refers to as “reasoning by analogy,” rather than by “First Principles” (i.e. fundamental truths). Essentially, when we attempt to innovate, we use existing models as the basis for our assumptions about what the new system/technology will look like. Instead, he argues, we should use “First Principles” as a way to start problem solving and system building from a place of fundamental truths, stripping away our biases or preconceived notions. Simply put — our learning and work systems should be developed based on actual modern individual and societal needs, rather than by incrementally improving on the previous systems’ efficiencies and structures.

In Reinventing Organizations, (the book referenced in internal email to Zappos), author Frederic Laloux outlines the shifts in organizational and societal structure, as well as mindset, during the various eras of humankind. He masterfully argues that we are witnessing another shift, which values individual purpose, passion, and meaning, and further demonstrates how these can be harnessed to make organizations thrive (both culturally and financially). The optimism of this viewpoint provides a stark contrast to the doomsday interpretations of the “uberization of work” narrative I’m seeing on all my feeds lately, which is a combination of: “Apps/robots are going to take your job” and/or “ People will no longer have any certainty about their work/income.” While these issues are very real, they can be mitigated by 4 key things:

  1. Teaching and credentialing people for soft skills like self awareness, team work, self drive, empathy, problem solving, conflict resolution, adaptability, and self organization — by recognizing, assessing, and motivating skills that are fundamentally human, we support what Daniel Pink metaphorically refers to as the “integration of the right and left brain,” to colloquially describe the fusing of analytic and empathic thinking, which is more difficult for machines to replicate. A focus almost exclusively on individual expert hard skill development that characterized the last century is being replaced by a demand for people to synthesize hard and soft skills and adapt to an ever-changing landscape with new technologies needed for the changing face of work. This kind of adaptable learning is also relevant for the jobs of the future, which aren’t even in existence now. To date we’ve hoped people would learn the softer skills as they go along, because our primary methods for measuring learning have been test-centric, and tests have a hard time measuring soft skills. However, as we get more creative with metrics to credential these skills, it becomes easier to introduce them into formal educational systems at an earlier age, and prepare people with the skills that will offer them long term career success.
  2. No longer defining value solely by title — So much of our ego is based on our job title. We get hired into a particular job description, and paid based on our experience and education as it pertains to that job. Because that is on our business card, our annual review, and one of the first things people ask about us, we end up suppressing the desire to learn things outside of that title. We aren’t recognized or rewarded for breadth or variety of skills and abilities, but rather for depth of a particular skill and alignment with the corresponding title and level (i.e. standard progression plan). This mindset asks you that you leave your individuality at the door, fully separating your life and your work. It impacts learning, promotion, compensation, and identity. How much more would you be able to accomplish if you were not bound by a single title? Or if you were able to do various different roles? In his book, “Where Good Ideas Come From” Steven Johnson refers to the concept of the Adjacent Possible, which shows how great ideas can emerge when people from outside a particular field look at a problem from a different lens. Enabling this kind of movement benefits both the invidual as well as the organization(s) they work for.
  3. Stop viewing learning and working as distinct stages — When we talk about learning, we typically think of schools, colleges, workplace training and other institutionalized top-down education. Instead, we must begin to create structures that support self directed, on-the-job learning, using models like Open Badges to encourage and recognize people taking initiative to “Choose Their Own Adventure,” open markets to transparently communicate real time business needs, and self organizational role structures to organize the work, to open up a world of opportunities for people to do many different types of work that align with their passion and personal mission in life. We begin to develop the building blocks of transparency, flexibility, and choice that support life long learning in the workplace, with context as to how that learning can be used in the market (and clarity on any financial benefits or trade offs associated with it).
  4. Shedding our reliance on “stuff” in favor of experiences — Collaborative consumption and a decreased appreciation for constantly amassing material goods liberates people from the car payment, mortgage, and other high ticket items that we bought into as the American dream, and which kept us shackled to our desks to RIP (retire in place). All around me I am beginning to see people foregoing these materials items, in favor of freedom to travel, explore and experience life. This reduces your expenses, which reduces your need to make as much money, which reduces the number of hours you need to work to pay those bills.

As more organizations adopt these kind of values and models, we’ll begin to see interchangeable credentialing, which, when combined with work marketplaces and role definition, will offer choice to people who may individually optimize their work schedule and roles based on hours, dollars, competencies, and passions. It will create real time feedback loops between organizations and educators regarding the specific skills that are needed and valued in the work place. From a social standpoint, work force training programs could use this data to partner with businesses to prepare opportunity youth and other job seekers in the specific skills that will get them hired, increasing the qualified labor pool for businesses.

With this kind of transparency, I expect new interconnected employment models, which could enable workers to “work abroad” at other similarly structured and transparent organizations, providing a key retention mechanism for top talent through offering them exciting learning opportunities and exposure, in line with the values of a generation increasingly uninterested in the predominant value proposition organizations offer employees today. Taking this a step further, organizations could productize areas of expertise, offering credentialed training to other businesses with similar skill demands.

I envision a time in which we begin our education by learning self-awareness, which enables us to identify our personal strengths, weaknesses, passion and purpose. We continue our education by self-selecting and self-directing into learning groups that provide context and relevance. We stay on this pathway throughout our careers and receive compensation and opportunities based on our actual contributions to the business and our willingness to learn new things, rather than simply the number of years we’ve had our butt in a seat, how we performed in a school setting, or the job description we were hired for. While this may be uncomfortable to those who have flourished in and capitalized on the current hierarchical management structure, it is a refreshing change for individuals willing to put in the elbow grease, humbly embrace learning new things, and adapt to a changing world.

This is part of what makes what Zappos is offering so incredibly visionary. It runs counter to the widely accepted “let’s do anything to keep them” perspective of employee retention, instead adopting an “if you love them, let them go” mentality. If they choose to return (or stay put), then they are there because they want to be, because they chose to be there. While it may be uncomfortable to make the transition toward this mindset, it demonstrates an inherent faith in people and their abilities. I have never been more inspired by the visionary folks at Zappos, or more excited to be at the edge of this shift toward learning and working systems that recognize and reward our individuality and passion, instead of asking us to check it at the door.

Recommended Reading and Links to References in this Post:

  1. Zappos Internal Memo
  2. Learning X PRIZE
  3. MacArthur Foundation
  4. Sugata Mitra’s School in the Cloud TED Talk
  5. Business Insider Piece on Elon Musk and First Principles
  6. Reinventing Organizations — Frederic Laloux
  7. A Whole New Mind — Daniel Pink
  8. Where Good Ideas Come From — Steven Johnson
  9. Badge Design Principles — Indiana University and MacArthur Foundation
  10. Fast Co Article About Millennial Car Buying Habits
  11. The Independent (UK) Article on a New Learning Model Being Tested in Finnish Schools
  12. Holacracy

Consultant. Startup Advisor. Former X PRIZE designer. Founder. Design Thinker. Power Hippie. Blogger @ThriveGlobal.

Consultant. Startup Advisor. Former X PRIZE designer. Founder. Design Thinker. Power Hippie. Blogger @ThriveGlobal.