Zappos

Running with Tony Hsieh

After 18 months pushing for a transition to a self-management organizational system called “Holacracy,” Zappos CEO Tony Hsieh took a decisive step. He offered three months' salary as severance to employees who didn't embrace the new system. In a month, 14% of the workforce, including 20% of the tech department, resigned. This case explores Tony Hsieh's leadership journey at Zappos. When Amazon acquired Zappos for $1.2 billion in 2009, it committed to preserving the company's family-like culture. Hsieh's introduction of Holacracy, however, faced unexpected resistance. His unwavering approach ensured that only fully committed employees remained with the company.

Keywords:
  • Zappos
  • Holacracy
  • Leadership
  • Company Culture
Industry:
  • E-Commerce
  • Shoes
  • Online Retail
Subject:
  • Organizational Behavior
  • Leadership

Learning Objectives

At the end of this experience, your students will be able to grasp, evaluate and articulate…

  1. Examining how culture contributes to shaping a company's competitive edge.
  2. Exploring the significance and influence of the organizational structure on its members.
  3. Grasping the emotional implications of organizational changes.
  4. Assessing leadership within the framework of a significant transformation.


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