Zappos made headlines recently when it announced its reorganization into a holacracy by eliminating job titles, managers and hierarchy in favor self-governing system made up of teams, or “circles.” Though this new system would seem to put people first, and offer an avenue for employees to be more directly involved in the management of the company, that only works in an idealistic world that ignores how individuals actually function in organizations. In other words, it’s an incredibly horrible idea. Here’s why:
Every single employee brings a different set of strengths to the workplace, and organizations.

• Some people are natural leaders who instinctively take control of the situation and the process.
• Some are “people people” – they are the social butterflies that seem to be friends with everyone.
• Some are the sympathetic, caring variety that always want to be helpful and can make you feel good with a few words.
• Some are super detailed oriented and are able to connect things and foresee issues that most simply cannot.

None of these archetypes are better or worse than any other. They simply represent individual characteristics. And they are applicable in the vast majority of situations regardless of what you think your corporate culture is. In other words, your organization – and yes, Zappos, this includes you – is not a special and unique snowflake in which these do not apply to your employees.
But here’s the rub: Employees may be strong in one or two of these areas, but rarely are the naturally strong in all of them. You might be a natural leader and a people person, but that means you’re likely going to be weaker on the details. You might be very detail-oriented and a natural leader, but that means you aren’t going to be as strong in regards to building social relationships and navigating the political spectrum of an organization. These weaknesses can be mitigated when there is mentorship and coaching and leadership and structure – all things that Zappos has done away with. And the employees that are going to suffer the most are the ones that are highly detail oriented but that tend to not be as strong at the social aspect of the working environment.
Zappos has proposed teams that will “self-regulate”. But this ignores the universal truths of individual human nature. Here’s what’s going to happen:

• The natural leaders and “people people” will dominate – they will instinctively take over and not only lead process, but will play the social game that will endear them to the group. However, we’ve already established that this group is not great about detail. That results in a very big blind spot for the company.
• The detail oriented people are going to see the things that all of the people unofficially running the group will miss. And they’re going to point them out. And when they do, because they haven’t built the social relationships, it’s going to piss the people in charge off. They’re going to view this group as naysayers, who are always looking for something wrong rather than working as a part of the team.
• The sympathetic people will float – they won’t be leaders, but they won’t upset anyone either.

The result will be a organization driven by people who are really good at playing politics, but who lack the natural foresight to identify obstacles that are going to result from their decisions. It’s also going to result in a less diverse workplace, because the people who can foresee those details are going to get pushed out for not “being a part of the team.”
Managers and hierarchy and structure are not the enemy of transparency and efficiency. Bad managers and poorly developed hierarchy and a lack of leadership are the enemy. These elements can’t be solved for by allowing a free-for-all. In a social system, leaders will always naturally emerge. Organizations have an opportunity to instill a structure that welcomes and encourages a diverse group of perspectives while also providing built-in systems for mentoring and coaching to help employees develop in areas they are not naturally strong in. Zappos has gone the opposite route – it’s lack of structure will only serve to push out employees that have so much to offer but that won’t be viewed as “fitting in” as a part of the team when they are simply trying to do their jobs. And what’s worse, Zappos likely won’t acknowledge the immense pool of talent that they will be losing as a result of this decision.

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