In 2013, Microsoft recognized that the company would have to make some fundamental changes to compete in an industry that rewards fast-paced innovation. At the time, there were several product groups at Microsoft that not only operated in silos, but also viewed each other as competitors for resources and bonuses. An engineer on a product team in one division might discover something that could be useful in another division’s product but there was no incentive for the engineer to share what was learned with the other product team. To address this problem, and to promote teamwork across the organization, Microsoft replaced the product groups with four broad divisions based on lanctions that absolutely need to collaborate to get anything done. For comp!, a team responsible for developing a new Xbcoc would now likely include engineers from the devices and studio engineering division, the operating ,stems division, the applications division, and the cloud division. To support Microsoft’s new structure and emphasis on teamwork, the company redesigned two buildings at corporate headquarters. The corridors and private offices that once filled these buildings were completely torn out Now the buildings are filled with 1,e open shared rooms called neighborhood, which teams can customize using stipends provided by the company. There are smaller -focus” rooms and co, alcoves that employees can use when privacy is needed, but there are no private office. The buildings are light and airy, and are decorated with art and interesting objects that encourage employees to walk around and to meet and com-municate. Rather than e-mailing, employees ate encouraged to engage with each other in person and to connect in ways that are more spontaneous and rich. Employees who may have never met face-to-face may run into each other at one of the coffee bars and discover they’re working on similar projects. Of course, the redesigned buildings may present the company and its employees with certain challenges. For example, some employees likely have a strong preference for privacy, or may be bothered by the distractions and interruptions from teammates. As another example, limited private space may make it less likely that employees speak up and challenge others on the team for fear that conflict will be exposed. Finally, because employees play an important role in the

design and development of their neighborhoods, they may not be as open to changing teams as projects evolve and the needs of the company change. 121 Describe how the building redesign is likely to influence process gain and process loss in the teams at Microsoft. 12.2 Describe how the changes at Microsoft have likely influenced team states. S2 What are the advantages and disadvantages of the building redesign with respect to com-munication? What can be done to mitigate potential disadvantages?

As Zappos made its push toward holocracy, Hsieh decided to ramp up the efforts to an even higher levet “‘eat Hsieh sent out a 4,700 word e-mail to all employees entitled “Reinventing Zap-pos: The Road to TeaL” Teal, supposed to be the next stage of development after holocracy, is characterized as “A new kind of organization designed to enable ‘whole’ individuals (not narrow professional selves) to self-organize and self-manage to achieve an organic organizational purpose.” In the memo, Hsieh essentially told the remaining employees to get on board or get out Hsieh was not hap, with the progress that had been made up to that point and wrote, , order to eliminate the legacy management hierarchy, there will be effectively no more people managers.” John Bunch, the employee in charge of the move to teal say, “‘.a1 is the goal; holocracy is the system, Hsieh even went as far as to offer the equivalent of three months’ worth of salary to employ-ees who would quit the organization if they didn’t feel they could fit in. Over 200 employees (14 percent) took him up on the offer—a massive number of people given Zappos’s normal turn-over rate of 1 percent annually. Clearly, not everyone felt comfortable in an organization with no clear leadership structure and very little to no legitimate power. One departed employee call. holocracy “a social experiment [that] created chaos and uncertainty.” Others felt like ,ore employees are feeling like favoritism [and management issues are] becoming a bigger problem.” CEO Tony Hsieh remains undaunted. Hsieh says, “The one thing I’m absolutely sure of is that the future is about self-management, The move has not been bad for everyone. Less experienced individuals with less expertise have fell energized by their ability to speak up and have a voice. One employee whose prior boss blocked a job transfer stated that as soon as he figured holocracy out, “I was like. ‘Actually, my boss can’t tell me that. Jake McCrea, who teaches new hires about Zappos culture, states, “Holacracy is like a sport or a new language. You can read about it, you can hear people tell you about it, you won’t understand it until you start using it, Even through all the issues, Hsieh stated, “I’ve been surprised at how hard it is to let go of the psychological baggage. In retrospect I would have probably ripped off the Band-Aid sooner.” 13.1 Can an organization run effectively without leaders having some form of organizational power? 13.2 What types of influence would become more important under holocracy at Zappos? 13.3 Do you think leadership skills would be more or less important at Zappos under holm-racy? How so?

The time-sensitive and life cycle models of leadershp both potentially suggest that leaders should use different styles and behaviors for different followers. Can you think of any negative conseque3nces of that advice? How could these be managed?
What could be the potential “dark sides” to transformational leaderhsip?