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Monday, May 11, 2015

Zappos Teal Fashion Organization

Teal is apparently more than just a fashion or shoe color.

Zappos, the Amazon-owned online retailer, confirmed with the Las Vegas Sun that 210 of its 1,503 employees (nearly 14% of the company) took a buyout deal after CEO Tony Hsieh announced the company was completely ridding itself of manager roles and job titles.


In 2013, Zappos implemented Holacracy, a system that removes traditional managerial hierarchies allowing employees to self-organize to complete work in a way that increases productivity, fosters innovation and empowers anyone in the company with the ability to make decisions that push the company forward.

Here is more information and the memo Tony Hsieh.  Portion included the following: “As of 4/30/15, in order to eliminate the legacy management hierarchy, there will be effectively be no more people managers. In addition, we will begin the process of breaking down our legacy silo’ed structure/circles of merchandising, finance, tech, marketing, and other functions and create self-organizing and self-managing business-centric circles instead by starting to fund this new model with the appropriate resources needed to flourish. Functions that were previously silo’ed will be embedded inside these business-centric circles instead — this structure will require fewer roles that primarily manage expectations and drive alignment across legacy silos. We will continue using Holacracy's systems and processes for prioritization and resource allocation, so it’ll be extremely important for all of us to keep Glass Frog up to date.”

They are on the road to, “self-organization, self-management, increased autonomy, and increased efficiency, we are going to take a "rip the bandaid" approach to accelerate progress towards becoming a Teal organization (as described in the book Reinventing Organizations). “

Teal organizations attempt to minimize service provider groups and lean more towards creating self-organizing and self-managing business-centric groups instead.


What is a “Teal Organization”? Frédéric Laloux, in Reinventing Organizations, uses a colour scheme, based on Integral Theory, to describe the historical development of human organizations: Red > Orange > Green > Teal.


Laloux lists three breakthroughs of Teal organizations:

1.  Self-management: driven by peer relationships

2.  Wholeness: involving the whole person at work

3.  Evolutionary purpose: let the organization adapt and grow, not be driven


Are the Zappos employees taking the buyout because they believe the company has lost their minds?  In all honesty, it does sound like they are having a rather extreme makeover.  How it will work out for Zappos, only time will tell.


Do you believe in the Teal organization method for Zappos?  Or do you think they should stick to a traditional business model and worry about fashion colors instead of organizational colors.

Zappos is a division of Amazon.  Learn more about Amazon in the fashion company profile section on Apparel Search.

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