Building Complex Organizations through Simple Constraints: Zappos — with John Bunch

Podcast Notes

In this episode we have a conversation with John Bunch, Lead Organizational Designer and Adviser to the CEO Tony Hsieh at Zappos. John joined Zappos.com in 2009 as a Software Developer and moved on to lead the Public API team. John was the Implementation Lead during Zappos’ shift to Holacracy and self-organization. Coming out of the roll-out of Holacracy, John transitioned to leading internal infrastructure and systems design.

In the conversation, they talk about how Zappos — through the application of Holacracy and marked-based dynamics — is becoming a thriving entrepreneurial organization. We use the city as a metaphor for the high diversity, high productivity organisation that Zappos strives to be, based on shared enabling services and micro-enterprising.

We also explore the concept of the “triangle of accountability” that guides the organizational development and the specific hiring process that helps make sure that people who join the company are aligned with the values and ways of working applied in Zappos.

Here are some important links from the conversation

Find out more about John’s work:

• LinkedIn: https://www.linkedin.com/in/john-bunch/
• Zappos: https://www.zappos.com/
• Zappos Expertise: https://expertise.zappos.com/

Other references and mentions:

• Tony Hsieh, Delivering Happiness: A Path to Profits, Passion, and Purpose. https://www.amazon.com/Delivering-Happiness-Profits-Passion-Purpose/dp/0446576220
• Zappos Adaptive: https://www.zappos.com/e/adaptive
• Nassim Taleb, Antifragile: Things That Gain from Disorder, https://www.amazon.com/Delivering-Happiness-Profits-Passion-Purpose/dp/0446576220

Key Insights

1. To create an anti-fragile organisation requires being able to evolve quickly to respond to a rapidly changing market needs and opportunities, while allowing people within the organisation to have enough autonomy in order to help generate the necessary diversity needed for resilience. Zappos Adaptive is an example of how new business lines emerge that can serve both business interests and social ends, while shared services and infrastructures are treated somewhat like government functions serving the “kingdom” of Zappos.

2. Building a complex organisation, Zappos has created the “triangle of accountability” with three equally important sides providing the constraints within which people are allowed to self-organise. These are: i. alignment to the 10 core values; ii. customer service as a differentiator, and; iii. P&L for each independent team. To ensure cultural fit, the company carries out a stringent recruitment process and are ready to say no to anyone who doesn’t pass the cultural test, regardless of their level of technical expertise.

3. Creating a radically divisional, radically modular company like Zappos is not a walk in the park. John highlights for anyone willing to take on the challenge to know that while there are great benefits, you have to be ready to be in it for the long term, pushing through the efforts required to work out new ways of contextualizing work within an organization.

? Boundaryless Conversations Podcast is about exploring the future of large scale organising by leveraging on technology, network effects and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.