Zappos Ceo Asks Employees to Commit to Teal, or Leave

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If by this point the change still appeared to be a good idea for the company, there should have been a designated process of implementation. The sudden change can cause employees to experience stress and feel overwhelmed. Especially without being properly educated on the structure. There should have been a time to make the change. For such a drastic change, it should have been an extended amount of time.

Problem #2

The CEO’s willingness to let employees leave.

Cause of Problem

The CEO, Hsieh made many statements displaying that his main objective was to ensure the employees were happy and innovating within the organization. His actions proved this to be untrue. If he cared for the employees and their welfare as he implied, he would not have been so accepting of their departure. Instead of seeking goals that would satisfy the organization, he implemented changes that would cause disarray, unhappiness, and fear. The goal behind the new structure was not to bring the employees together, because it did the opposite. The severance packages offered were generous on the CEO’s behalf, but the employees losing their career did not equivalently compare to the financial incentives. There was a lack of total rewards for all employees.

Recommendation #2

The employees should not have immediately been offered a severance package without first trying to resolve the issues. The immediate direction to “accept or leave” was unprofessional, and again showed the lack of compassion the CEO implied he had for the organization. To prevent employees from feeling the urge to leave the company I would again recommend a more designed, planned, and researched implementation process. On top of that, I would conduct briefings with departments during and after the implementation to seek employee feedback. From the provided data, we would be able to suggest changes that would have made the employees feel both more comfortable and appreciated. Constant on-floor interaction from the “leaders” of the groups would have allowed direct resolution for individual(s) uncertainty with the structure. Offering the individuals that felt “lost” the opportunity for one-on-one communication could have diminished their desire to leave the organization.

Problem #3

The definitive choice to obtain “teal” through holacracy.

Cause of Problem

The problem was caused because the CEO failed to follow business processes that were ethical and organizationally driven. The sole decision to make a structure change should not have been processed by ne individual in the organization. How did other management and officers allow this to transcend? The change was not challenged or opposed. It went from a structurally ran organization with defined managers and departments with clear responsibilities and tasks to being a large business with individual/team lead processes and a major lack of structure and discipline.

Recommendation #3

As stated in previous recommendations, the initial, issue is the lack of research, development, and implementation. However, the organization made such a drastic change, lost many employees, and many functions, that it is bound to experience backlash or negative results. To prevent this, there are many other structures that are between the original and new that could have been suggested and implemented. We can relate the initial organizational design to a functional structure. There were designated departments that focused on specified tasks within that industry/department with a defined manager. If Zappos would have used a contingency approach to organizational design they would have concluded that the use of a horizontally-matrixed structure could have brought success to the business. Using this structure would have kept management in place to achieve leadership responsibilities, all while using teams to achieve daily tasks and goals. The contingency approach would allow for clear goals and objectives to be identified that would have made the changes easier to define and implement.

Works Cited

Fugate, A. K. (2016). Organization Behavior: A Practical, Problem Solving Approach. New York: McGraw-Hill Education.