I wrote about Zappos and Holacracy here , and got lots of questions. This is take two.
In my work on Remarkable Organizations, that I hope to make public later this year, (little video vignette here , and some explanations here  ), I set out 10 organizational principles that, although will not unsure you ‘remarkability’, may put you in the right path, if you have a good architect.
One of these 10 is ‘Cohabitation’. It means the coexistence of different organizational models under one roof, versus the obsession within the entire company being structured in one single organizational model. There is nothing intrinsically wrong, indeed I will argue, it is a fundamental element of future remarkability, with hosting different organizational models under one umbrella. The company is the host. There are ‘organizational spaces’ inside, within the big tent, that are looser than others, tighter than others. There are clusters and ‘cells’ that may work pretty much self-managed whilst others may be closer to a more structure command. Pieces should be fit for purpose. More trouble to manage? Yes, sure. I thought we were paid for that.
Good leadership is the one able to hold it all together, to provide the glue, to make sense, without going nuts. And many managers would go nuts at the simple idea of even conceiving different coexisting models ‘inside the tent’. After all, we are told, good management means uniformity (?). So we have one set of values (OK); one set of process and systems (why?); one set of accounts (OK, the City or the Stock wants one set? Let the accountants provide one set. It does not mean one internal simultaneous system to make the accountants life easy. Last time I checked, the latter has never figured out too high in strategic objectives; or has it?); one set of reporting systems (again, why?); one set of structures (why?why,why?). A rich system of cohabitation (of models) will allow constant experimentation, leading to another of my 10 principles which is called ‘Stay in beta’.
The problem with the Zappos journey to the apparent Holy Grail of total Holacracy is that the transition in Zappos looks like a fundamentalist approach. I don’t work in Zappos, nor I have first hand knowledge, but much has been publicised about the Holacracy conversion to be able to hold an opinion, obviously biased. (I do have and write biased opinions, the non biased are already in management books). And conversion may be the right word because there is something intrinsically intense in Zappos philosophy and history. It’s almost religiously revealing in its all or nothing, born-again-management.
Self management is a journey, and I have written about the inevitability of the direction.  The question is the speed of the travel, the vehicle, the intermediate destinations and the travellers themselves. Morning Star, a Californian producer of tomatoes (far less sexy than online apparel, including shoes/zapatos/zappos, and not bought by Amazon) has been in self management mode for years, but has not attracted the visibility of Zappos Holacracy, not they needed a term to travel. They even run a self-management institute. 
I have no conceptual problem with Holacracy. As many friends and readers have reminded me in the last hours after my first Daily Thought on this topic, many of the Viral Change principles  that I described in 2006 and 2008, would click very well with the self-management element. More to come on this. But my worry, from a distance, from my bias, and through my glasses, is that Zappos leadership has gone more and more ‘black and white’. There may be a merit for this, but I don’t believe that the complete cut and paste of an organizational model ever works.
Perhaps the drop that triggered my little tsunami of ‘Zappos without the zapatos: not all inmates want to take over the asylum’ was the realization that Zappos is consulting/has consulted with Holacracy ‘gurus-cum-book’, who, I know, have never managed any organizational transitions themselves.
(Respected David Snowden of Cognitive Edge has no time for the cookbook  that everybody in Zappos need to comply with /read/chose to reject (in your way out): Frederic Laloux, Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness.  David, unceremoniously, calls it ‘one of the most trivial management books I have read in a long time’)
If Zappos conversion in the road to Self-Management Damascus results in a cut and paste of an off-the-shelf, ready made, fully blesseed, guru-cum-book organizational model, then, yes, biased or not, I have a big problem. It’s called Uncritical Thinking.