The strategy for change Zappos have adopted

1. By eliminating bureaucracy and bottlenecks

Tony wanted to change the organizational management structure at Zappos by removing
bureaucracy and bottlenecks and transform it into a new and flexible self-managing
organizational structure, termed as Holacracy. By doing so, employees at Zappos or
“Zapponians” could utlise their skills more effectively, collaborate more freely and
develop an entrepreneurial spirit at work.
2. The concept of “Circles”
“Circles” are flexible units or teams with temporary functional roles but function under
strict governance. Tony brought the concept of “Circles” to meet specific company goals
where people have the freedom to step in and step out as per their will and take work
responsibilities as per their skills. Such a concept meant that leadership and people
hierarchy was not rigid. However, meetings operated under strict guidelines as explained
in Exhibit 3 of the case where every “Circle” conducts tactical meetings and governance
meetings and each member had to participate in the meetings and were free to voice their
opinions or concerns.
3. On-point conflict resolution and decision making
Tony wanted employees to resolve conflicts through mutual conversations and encourage
decision making right at the point of origin and not push them upwards. By implementing
this strategy, time will not be wasted in following the people hierarchy, waiting for the
higher management to resolve conflicts or make decisions for the employees and also, it
will instill a sense of responsibility among the employees.
4. Incorporating more freedom on the part of employees
This is in continuation with the previous point where employees enjoy more freedom to
make decisions on their own, rather than approaching their bosses or managers for their
problems, but this also comes with the price of being responsible for their decisions and
actions. In other words, employees are encouraged to become self managers.
5. Reframing of managers’ people responsibilities into lead link, mentor and
compensation appraiser
Tony took the decision to put away with all previous titles and reframed people managers
into broadly three categories: a lead link who would guide the employees on their specific
work, a mentor who would provide mentoring on employee growth and development and
a compensation appraiser who would guide regarding employees’ salary. Their roles and
responsibilities are further explained in more detail in Appendix A of Exhibit 4 given in
the case.