Hierarchy on Steroids - Ten Years After Zappos Went Holacratic
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Prologue: When AI Makes You Rethink Holacracy
When you spend your days writing about AI, you start seeing patterns in unexpected places. Holacracy, for instance, may have nothing to do with neural nets or reinforcement learning—but looking back, it feels eerily similar to the way we now talk about agentic AI. Decentralized actors, autonomous roles, no central boss, everyone just… doing their part. On paper, it’s elegant. In practice, it’s chaos with better vocabulary. Holacracy was basically the human version of AI agents—only with more meetings and fewer APIs. And ten years after I first called it “hierarchy on steroids,” I find myself drawn back to it—not just as a management experiment, but as an early attempt at self-organization that mirrors what we now try to simulate in code.
From Circles to Chaos: How Holacracy Reshaped (and Confused) Zappos
Ten years ago, I published what would become the most quoted German-language article about Holacracy. It ran under the title “Holacracy: Die Hierarchie der Kreise” (“The Hierarchy of Circles”) and was published by the ZukunftsInstitut, Germany’s leading future studies think tank. Back then, Holacracy was a rising management trend, promising to turn traditional corporate hierarchy upside down—or, more precisely, inside out.
At the time, I wasn’t convinced. In fact, I coined a phrase that stuck: Holacracy is hierarchy on steroids. That line made its way into presentations, panel discussions, even HR strategy decks. It summed up what many felt but struggled to articulate: Holacracy didn’t eliminate hierarchy—it amplified it. It replaced clear reporting lines with an endlessly recursive structure of circles and subcircles, each dependent on the one above, all operating under a constitution more bureaucratic than the one that governs most democratic nations.
Now, a decade later, it’s time to revisit the story—especially the one that made Holacracy famous: Zappos.
The Zappos Experiment: A Giant Leap into Self-Management
It was January 2014 when Tony Hsieh, the visionary CEO of Zappos, announced that the company would adopt Holacracy—a management system with no managers, no job titles, and no traditional org chart. Zappos, a Las Vegas-based online shoe retailer with about 1,500 employees, had always prided itself on being quirky, bold, and unconventional. Now, it was about to become the largest company in the world to implement Holacracy.
The move was radical. No department heads. No VPs. No formal bosses. Employees were told they’d need to define their own roles within teams—called circles—and that those circles would self-organize using a formal governance process outlined in something called the Holacracy Constitution. And just in case anyone missed the point, Hsieh made the consequences crystal clear: Anyone who didn’t want to go along with the plan could take a generous buyout and leave.
Roughly 14% of the workforce—210 people—did just that. But that was just the beginning.
The Myth of No Bosses (And the Reality of SOX)
The media latched onto the phrase “no bosses,” but that was never quite accurate. The real issue wasn’t the absence of managers—it was the absence of job titles and a traditional hierarchy, the kind you need to be legally compliant when your parent company is Amazon.
That’s right. Zappos had been a wholly owned subsidiary of Amazon since 2009. And as part of a public company, it was subject to Sarbanes-Oxley (SOX) regulations, which require clearly defined reporting structures. Holacracy didn’t provide that.
Tony Hsieh acknowledged this in an internal memo, noting that every employee would technically still have a “reporting relationship” in the HR system—for compliance reasons only, of course. In other words: Zappos was manager-free on the surface, but buried beneath the Holacracy layers, the ghosts of hierarchy remained.
And those ghosts had a job to do: satisfy auditors.
Hierarchy on Steroids - How Circles Spawned More Circles
Holacracy was supposed to replace rigid hierarchies with adaptable circles—self-managing, self-improving teams that could evolve based on the work at hand. But in practice, it replaced one type of hierarchy with another: a deeply recursive, infinitely nestable structure of circles within circles. And every sub-circle answered to the circle above it.
Each circle had a purpose, defined by the larger circle. Each had roles, accountabilities, and governance protocols. In theory, it was flexible. In practice, it created structural vertigo.
By 2017, Zappos had over 460 active circles and more than 4,700 distinct roles. Circles could create sub-circles. Sub-circles could spin off task forces. And those task forces? Yep—more circles.
The problem wasn’t lack of structure. The problem was too much of it.
What’s worse, decision-making stalled. Circle members, theoretically empowered to act, often didn’t. They feared stepping on toes, crossing boundaries, or making the wrong call. As one Zappos veteran put it: “You’re empowered to act, but no one wants to be the first to do it.”
It turns out that removing hierarchy doesn’t guarantee initiative. Especially when everyone’s watching… and no one’s clearly in charge.
No Titles, No Problem? Not Exactly.
One of the most visible (and bewildering) aspects of Holacracy at Zappos was the removal of job titles. The logic was egalitarian: No more rigid roles, no more power games. But job titles don’t just represent hierarchy. They’re also currency.
When titles disappeared, so did employees’ ability to describe what they did—on LinkedIn, in job interviews, or even at family dinners.
Zappos’s former COO printed “No Title” on his business cards. Tony Hsieh’s assistant called herself a “Senior Time Ninja.” Others took on titles like “Experience Guide,” “Zappos Fungineer,” and “Cultural Evangelist.” It was cute, sure—but confusing. And when those employees tried to apply for jobs elsewhere, HR departments didn’t know what to make of them.
LinkedIn, Glassdoor, job portals—these platforms all have required fields. “Time Ninja” doesn’t work so well when a recruiter is trying to fill a director-level role.
Titles, it turned out, weren’t just about status. They were also about navigability—for the outside world and for the people inside Zappos, too.
The Quiet Retreat: How Zappos Softened the Edges
By 2018, the cracks were showing. Zappos began dialing back the most rigid parts of Holacracy. Governance meetings became less frequent. Circle documentation became less detailed. And—yes—managers quietly returned.
John Bunch, who had led the Holacracy implementation, began describing the company’s structure not as Holacracy, but as a “market-based ecosystem.” Teams were now mini-businesses, each with a profit-and-loss statement. They still had autonomy—but with accountability.
The vibe shifted. The labels stayed, but the idealism softened. Zappos was no longer trying to be the blueprint for the bossless company of the future. It was trying to run a business.
After Tony Hsieh’s death in 2020, the company entered a period of quiet recalibration. Today, in 2025, Zappos still uses some Holacratic principles—but few would call it a Holacracy in the pure sense. Circles exist. So do team leads. But decision-making has returned to a more recognizable blend of structure, accountability, and leadership.
The company survived the experiment. But the model? That’s a different story.
Who Else Tried Holacracy? (Spoiler: Not Many Big Players)
Zappos wasn’t the only company to try Holacracy. But it was the only one of its size—and certainly the only one with Amazon’s compliance obligations—to adopt it wholesale.
Other notable experiments include:
Medium, the publishing platform founded by Twitter’s Evan Williams, adopted Holacracy early. But by 2016, they ditched it. The structure, they said, was a tax on focus and speed.
David Allen Company, best known for Getting Things Done, implemented Holacracy and stuck with it—though with customizations.
Precision Nutrition, a coaching company, called Holacracy transformative, at least for a time.
But beyond a few small to mid-sized firms, Holacracy never caught fire at scale. It was too rigid for startups, too exotic for corporates, and too dependent on flawless communication and shared emotional intelligence.
Where We Are Now: The Legacy of Holacracy
Ten years later, Holacracy hasn’t vanished—but it’s been absorbed. Many organizations now embrace self-management, distributed authority, and agile teams—but without the 30-page constitution or the semantic gymnastics.
The vocabulary survives. The ideology? Less so.
Even Brian Robertson, Holacracy’s creator, has pivoted toward licensing and training, often in hybrid models. GlassFrog, the official Holacracy platform, still exists, but its client base is niche. The world moved on. Holacracy became one chapter in a larger story about reinventing organizations.
And that phrase—“Hierarchy on Steroids”—still gets cited. Because it turned out to be more than just snark. It was a warning: Complexity can masquerade as innovation. And clarity, not chaos, is what people crave—even in the flattest, freest workplaces.
Final Thoughts
Holacracy tried to build the company of the future. It didn’t fail outright—but it didn’t scale, either. The ideal of a flexible, boss-optional workplace remains alive, but most companies now seek balance over revolution.
Zappos took a wild swing. And they taught the business world something important in the process: You can strip away titles, but you can’t strip away human nature. People need structure. They need clarity. And yes, sometimes, they even need a boss—just not the kind who kills creativity or hoards power.
So here we are. Ten years older. Hopefully wiser. And still a little suspicious when someone says, “Don’t worry—there’s no hierarchy here.”