Gut Check: Are You At Risk Of Becoming An Obsolete Leader?

July 13, 2015 Vince Molinaro
Gut Check: Are You At Risk Of Becoming An Obsolete Leader?Online shoe retailer Zappos is pretty much like any other ambitious company.

The company wants its employees to be fully engaged, creative and innovative. It wants discretionary effort from its people. It wants an employee population that is constantly looking for ways of getting bigger and better.

Who wouldn’t want these things in their own company? In many cases they represent the Holy Grail of high performance.

And yet, the way in which Zappos has gone about cultivating these behaviors and outcomes is different from just about every other company.

Zappos is now a holacracy – a workplace where “bosses” are eliminated and authority and decision-making powers are spread more evenly across an organization.

I spent my entire doctoral program researching holistic approaches to leadership. I know well the thinking of the holacracy movement.

In many cases it represents the antithesis of a classic corporate hierarchy, where authority and decision-making are concentrated in the top layers of an organization’s management. Power and authority become diluted the further down the hierarchy you go.

What I find interesting is how Zappos went about applying the principles of holacracy to its day-to-day operations. Supervisors and middle managers lost their job titles and their responsibilities for overseeing other employees. Now, according to the company, employees get to decide for themselves how to perform their duties, without supervision.

The company has said its reorganization along holacratic principles is designed to make it more creative, more agile and more adaptive. Instead, as the largest company to date to embrace this new organizational structure, the early days of its holacracy experiment have been more about pain, disruption and confusion.

For example, pushback from employees opposed to the new structure, prompted Zappos to offer concerned employees a cash payout to leave. This past spring, the company admitted that more than 200 of its 1,500 employees had left to escape the transition. This represents 13% of its entire workforce. Not a small number.

The Zappos experiment with holacracy is fascinating because it suggests that business leaders are doing such a bad job that they have become obsolete.

I would agree that far too many organizations are afflicted with unaccountable leadership. However, is holacracy the best solution in that scenario?

The movement’s gurus believe that a holacracy can create a work culture completely free of politics and power struggles. Rather than rejecting leadership, advocates claim a holacracy “distributes” leadership across an organization, making everyone more accountable.

But all of this is only true if everyone understands what real leadership is about and how they must be personally accountable.

Yet in my experience, most employees prefer to work for a leader. Research in evolutionary leadership has repeatedly shown that people perform more strongly when they are led, rather than being leaderless.

What I’ve also learned is that not every employee is capable of leading. That doesn’t mean non-leaders have no value in an organization. It’s just that some people are more valuable as followers, while others can really drive performance by leading.

We will see how the Zappos experiment unfolds over time. Will it be a colossal mistake? Or will Zappos be able to create something compelling for other organizations to replicate.

In the end, all of this is a big wake up call for leaders. If you are a mediocre or lame leader, your future may be at risk. It’s time to step up or face extinction.

Thanks to our friends at Zappos, this week’s Gut Check asks: are you at risk of becoming an obsolete leader?

Follow me @VinceMolinaro


About the Author

Vince Molinaro

Vince Molinaro is the Global Managing Director of Strategic Solutions at Lee Hecht Harrison. He is also the author of The Leadership Contract – a New York Times and USA Today bestseller. Vince has spent more than 20 years as an adviser to boards and senior executives looking to improve leadership in their organizations.

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