( CNN ) -- A few months ago , after drinking scorpion shots with Zappos ' CEO Tony Hsieh , he gave me a tour of the Downtown Project , a formerly blighted neighborhood in Las Vegas being revitalized . Hsieh and others are investing $ 350 million to help turn the desert town into the smartest city in the world . Sound ambitious ? It is . Hsieh 's interest in cities strikes many people as a curiosity , given his track record at Zappos . Talk to him ( especially over scorpion shots ) , and you find out it 's actually the reverse . `` Every time the size of a city doubles , innovation per person increases , but when a company gets bigger , innovation per person goes down . Why is that ? '' he asked . `` In a city , '' he explained , `` people and businesses are self-organizing . We 're trying to do the same thing at Zappos . '' Part of that goal involves moving Zappos to holacracy -- an organizational system that throws out all job descriptions , job titles , management ( as we know it ) , and the organization chart , and starts over . Since Zappos ' announced this move , people have wondered whether holacracy is just another fad or something to be taken seriously . Let 's take a closer look at holacracy . ( Full disclosure : I endorsed Hsieh 's book `` Delivering Happiness , '' and he wrote the preface for my book , `` Tribal Leadership . '' He 's spoken to my USC classes , and I 've spoken at several Zappos events . ) You should care about holacracy because it tries to fix many things we all hate about companies , including : . 1 . The organization chart on the wall has nothing to do with how people do their jobs . 2 . The title you have probably does n't reflect what you do , unless you own the company . 3 . Your manager knows nothing about what you do much of the time , and yet makes decisions that determine your success . 4 . Traditional management creates `` my life sucks '' cultures . If any of these problems sound familiar , then you and Hsieh ( and many of us in the leadership world ) are on the same page , so far at least . Holacracy was pioneered by Brian Robertson and outlined in his upcoming book , `` Holacracy : Evolution for Organizations . '' The basic building block is a role , which is a breakdown of the organization 's work . Roles work together in `` circles '' that self-organize . Circles can spawn sub-circles , and connect with other circles with `` links '' â€ ” roles that form conduits between circles . People `` energize '' roles , and one person can energize multiple roles . Circles have regular governance meetings in which people talk about roles , accountabilities , authority and policies . If this description ( which I ran by Robertson word-for-word ) sounds like he 's been reading the rules of Monopoly translated into computer code by way of Burning Man , you 're not far off . Holacracy is complex , and designed to be so . It is hard to implement . To date , Zappos is by far the largest adopter of holacracy . When it works , holacracy is amazing , so it 's no wonder business leaders are paying attention . David Allen , author of `` Getting Things Done '' and founder of a consulting and training company that runs on holacracy , told me that after a tough adjustment period : `` The company becomes much like a well-tuned machine that , to some degree , is self-correcting . You do n't have to spend a lot of time going through channels to get things handled . '' So , will it work at Zappos ? Probably . Holacracy requires a great culture , and people who value egalitarianism . It 's not communism ( despite what some critics are saying ) , but it does throw out conventional ideas of power and hierarchy . It helps if people are grounded in customer service , can tolerate weirdness , and can take a leap of faith into the unknown . If this description is n't your company , then holacracy will not be a great fit . Holacracy is not coming to a company near you , at least not in its current form . Few have the value set of Zappos and very few have great cultures . It remains to be seen whether it can scale to a company of Zappos ' size . The real story here is that there are many new organizational forms out there , holacracy being one . Most emphasize ownership thinking , agile methods and great cultures . Like cell phones in the 1980s , these new organizational models are big , bulky and hard to use . Many do n't work at all . But over time , some of them will become sleek , easy to use , more powerful , and even elegant . Holacracy may just surprise us . The opinions expressed in this commentary are solely those of Dave Logan .
Zappos is trying out holacacy , an organizational system that does away with hierarchy . David Logan : Holacracy tries to fix many things we all hate about companies . He says as a company gets larger , innovation per person tends to go down . Logan : Holacracy might just work at Zappos because of its unique culture .