Beware of the Snake Oil Salesman

I’ve been reading about a new consultant’s tool that can be used to empower employees. It’s being used by a number of organizations. One of those is Zappos and you may have heard some of the controversy about Zappos implementing this strategy. The CEO, Tony Hsieh, offered buy-outs to Zappos employees who would not be able to embrace the culture, or as it is termed, Holacracy. More than 10% of the staff took the buy-out. There have been a lot of reports about this but none of the reports have said why the employees preferred the buy-out over staying at Zappos and embracing the new culture. Maybe this is why.

After further reading, I learned more about Holacracy than I really wanted to. I started out by reading the Constitution of Holacracy ( The whole premise of Holacracy is that it is to be less hierarchical than the traditional organizations most of us are aware of but the problem with Holacracy is it isn’t, especially when you read the Constitution. The Constitution is the Rule Book and it in itself is a hierarchical example. It lays out specifically what needs to be done and how in very precise detail. The consultants that have designed this rigid program wrote on the Constitution’s page it wasn’t necessary to read it but in order to understand the complexities of Holacracy and its terminology, it’s an absolute must. The terminology must be understood in order to follow the structure. There are so many provisions it’s no wonder it takes organizations a long time to implement Holacracy.

Terms such as “Role” replace job description and “Circles” replace squares that are normally used in depicting an organizational chart. Yet there’s more to such simple terms as Role and Circle plus others that make it extremely cumbersome to understand.

For example, the term that replaces jobs description is Role which includes its purpose, the items a person will directly oversee, or the Domain as Holacracy calls it, and all the activities a person will perform which Holacracy likes to call, Accountabilities. Sounds just like a job description, right? A person receives that Role, or job, if they’ve been assigned to it and/or agree to do. Nothing that is different from a traditional organization. Each Role can be part of a Circle that will do a specific function in the organization. A Governance Process will oversee the Circles and the work they perform in an organization. There also is the Lead Link who really is a manager or supervisor who oversees the purpose, domain and accountabilities of a Circle. So just from this you can tell it’s still very much a hierarchical structure. There’s a lot more to Holacracy than what was just described.

Holacracy is nothing new but it’s being sold as if it’s something brand new and the only thing out there that will produce results with employee engagement. Lots of consultants have used this type of technique as a hook with the package designed to keep the consultant in the organization for a long time which provides them with a substantial fee. Holacracy is a perfect example of this and, unfortunately, consultants use these tactics to sell to major organizations such as Zappos so they are better able to market it to others. It reminds me of the story, The Emperor’s New Clothes. It’s this type of practice that has given consultants a bad reputation.

The sad part of it is these programs become the “flavor of the month.” Employees think they’re finally going to have some input only to find out nothing changed. Senior management thinks employee engagement doesn’t work and employees really don’t care. Everybody becomes disenchanted and frustrated. The only people that have gotten anything are the consultants who a lot of times proclaim the process really works when it really doesn’t.

Employee engagement doesn’t have to be a cumbersome process. When using a specific problem solving process or model correctly, it can be a very effective tool for employee engagement. There are problem solving models available that are not difficult to use such as W. Edwards Deming’s Plan-Do-Check-Act model or a four-step model. Links to both are below. These models can help groups not just with problems but with identifying new ways of doing things or coming up with innovative ideas that can help organizations grow.

Organizations starting out may want some assistance so it will be done effectively but the process is not nearly as cumbersome as Holacracy and doesn’t necessarily require consultants to stay for a long time. It’s also possible to have someone from the organization be trained as a facilitator to help groups with the process. A facilitator can keep groups focused on each step of the process and have tools available that can help groups.

Holacracy may work. Some organizations may embrace it but it’s also worth mentioning that if a consultant comes to you with a package, make sure you explore it very carefully. If it’s simple and easy to understand, doesn’t require the consultant to maintain a presence for a long period of time, and teaches employees use on their own it may be worth your while. On the other hand, if it has new terminology for old terms or appears to have an elaborate process that somehow masquerades a simple process – RUN! That consultant may be “snake oil salesman.” To read another source’s take on Holacracy, read this from Forbes:

About CALMC Blog

Columbus Area Labor-Management Committee is a not-for-profit organization dedicated to involving employers and employees to preserve jobs, resolve workplace issues, and promote labor-management cooperation. Visit our website at
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.