Tony Hsieh on his vision for Zappos:
Holacracy happens to be the tool we're using today, but the bigger theme is about self-organization and self-management.
Many years prior to meeting Brian, I had a nagging sensation that as we kept getting bigger, we kept getting more bureaucracy built into the corporate structure. Because I wanted to stop this trend, I was spending a lot of time thinking about how we could avoid losing a startup edge and how we could empower every employee to act like an entrepreneur.
I was looking at the weaknesses of the typical corporate structure and how it's not been resilient. If you look at the Fortune 500 companies from 1955, 88% of them didn't make it to 2014. Then you look at what structures do work in nature, like the human body, and they're all structures that are self-organized. Frederic Laloux captures this best in his book "Reinventing Organizations," where he refers to these as "Teal" organizations.
The easiest example of self-organization for people to wrap their minds around is a city. The mayor of a city doesn't tell its residents what to do or where to live, and when people and businesses act in their own self-interests, that creates opportunities for growth.
An interesting thing about cities is that Glaeser's research has shown every time the population of a city doubles, innovation or productivity per resident increases by 15%, but the opposite happens when companies double in size.
Over the years at Zappos, I've done a lot of research into how we can prevent the default future for most companies: death. And not only how do we avoid that, but how do we become more innovative as we grow, in the same way that cities do? That's why we pursued self-management.