About 14 percent of Zappos’ workforce recently quit. It’s similar to what happened when Ford introduced the assembly line. Many workers abruptly resigned. Ford and Zappos remind us of why it’s sometimes wiser to be an early non-adopter.
An early adopter is an individual or business using a new product or technology before others. This includes individuals who first joined Facebook or Twitter, for example. Now we see Zappos adopting a new business philosophy.
In April, Zappos CEO Tony Hsieh declared that the company was getting rid of bosses and putting employees in charge. Zappos is shifting to an approach called Holacracy, where workers decide largely for themselves how to get their work done. There are no more managers. Teams instead work in circle groups. So far, Zappos employees have formed more than 300 circles. But there are some early non-adopters.
A percentage of employees have decided Holacracy is not for them. Last month, Zappos said 210 of its roughly 1,500 employees, about 14 percent, had quit. This is similar to what happened when Henry Ford introduced the assembly line in the U.S.
Assembly lines date from the early 1800s with a man named Mark Isambard Brunel. Dining with the former Secretary to the U.S. Treasury, Alexander Hamilton, in 1798, he got news of the bottleneck in British naval expansion. The Royal Navy required at least 10,000 rigging blocks a year. But the blocks were made by hand so demand had long outstripped supply. It was then, Brunel wrote later, that “the idea for block machinery came to me.”1 He hurried home and devised an assembly line approach.
A century later, Ford had a supply problem. In 1908, groups of two or three men would build a single Model T. Each car bore a distinct “work signature.” In its first full year of production, 1909, about 18,000 Model Ts were built. But no matter how many or how fast the Model Ts were built, demand outstripped supply.
Ford’s solution was the assembly line, an idea he got from Frederick Winslow Taylor, the founding father of modern management. Taylor viewed workers as “oxen” who needed to be managed. (That’s a far cry from what scripture says—that we ought to manage only animals, appetites, and assets. Ford didn’t care about the Bible.) Ford introduced the first moving assembly line in the U.S in 1913.
The time required to assemble a Model T was reduced by 10 hours. The assembly line boosted annual output to over one million cars by 1920. But assembly line work felt dehumanizing to some workers used to “signing” their work. They refused to adopt this approach and resigned. They were early non-adopters.
Henry Ford sensed this might happen, estimating he’d have to replenish his factory ranks with 100 workers by the end of 1913. He missed by a mile—963 workers quit. Ford Motor Company survived because, year after year, more and more workers got used to being treated like animals. The early non-adopters were gone. The remaining workers were habituated, used to the reigning culture of being “managed” in the workplace.
W.L. Gore & Associates Inc., the maker of Gore-Tex fabric, has been trying to break the management culture for many years. It has more than 10,000 employees and annual sales of more than $3 billion but no traditional organizational charts or chain of command. The company is part of a movement of management-free companies. Zappos is part of this movement. But let’s not kid ourselves. Managing people is a hard habit to break. The early non-adopters at Zappos likely cut their teeth in companies that treated them like animals. It’s likely that the 210 who have resigned like the leash.
The lesson is that early adopters are not always wise (devotees of social media might think about that). Early non-adopter Ford workers were wise. Early non-adopter Zappos workers are not. In this case, the difference is in knowing what ought to be managed—and not managed. Otherwise, you can’t appreciate early non-adopters.
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1 Paul Johnson, The Birth of the Modern: World Society 1815-1830 (New York, HarperCollins, 1991), p. 576.