Jul 17, 2015 ยท 5 minutes

A curious little story in the New York Times today about the great job Tony Hsieh (a Pando investor) is doing reinventing downtown Las Vegas, and how Holacracy will revolutionise Zappos. 

If that sounds familiar, it's because it's the exact opposite of the story I wrote last week about how Hsieh's Downtown Project has unequivically failed, and how Holcracy is sending Zappos employees running for the hills. 

The Times story was written by David Gelles who is also author of "Mindful Work: How Meditation Is Changing Business from the Inside Out." Gelles' article mentions Pando's reporting on Hsieh and Holacracy but for some reason fails to include a link.

If I were a cynic, I'd think Hsieh's PR handlers were playing their usual game of reacting to bad press by convincing a friendly reporter to write a puff piece repeating his "vision" for the future, unincumbered by actual facts.

Certainly the piece is a PR dream come true for Zappos and Holacracy. Consider this graf high up in the Times story...

But like all meetings these days at Zappos, the online merchant best known for its shoes, this one followed a strict format determined by a radical self-management system called Holacracy. The goal of Holacracy is to create a dynamic workplace where everyone has a voice and bureaucracy doesn’t stifle innovation.

Doesn't that sound great? 

It's not until nearly 30 paragraphs into the story that the Times actually gets around to asking Zappos employees how Holcracy is actually working...

If only it were so simple. Holacracy has been met with everything from cautious embrace to outright revulsion at Zappos, but little unequivocal enthusiasm.

“There’s no putting rose-colored glasses on it,” said John Bunch, who is leading the Holacracy push throughout Zappos. “We’re just taking baby steps.”

“It is really painful and slow at first,” said Christa Foley, a 10-year Zappos veteran.

Even Josh Pedro, who is in charge of managing Zappos’s public relations, doesn’t sugarcoat the situation. “It was a weird transition,” he confessed.

Ms. Kelly, the former call center worker, applauded Holacracy for giving even the lowest-paid workers a voice. “A person who just takes phone calls can propose something for the entire company,” she said. “It’s empowering everybody to have the same voice.”

But she said that the procedural formality of Holacracy, the ever-expanding number of circles and the endless meetings were a drain on productivity. “It’s taking time away from getting the actual work done,” she said. This was the same day as the software meeting, and as if still in disbelief, she said once again, “I have five hours of meetings today.”

Nonetheless, Zappos is pushing ahead with Holacracy.

In fact, the Times only manages to find one single person not identified as a Zappos employee who has anything positive to say about Hsieh's various Vegas experiments...

Mark Guadagnoli, a kinesiology professor of the University of Nevada, Las Vegas, who also specializes in optimizing performance and communication in the workplace, has lived in the city for 20 years. “When I moved here, I would go downtown and be uncomfortable. Then it got worse and worse,” he said. “Now it’s a really fun place to go. It’s a destination. Anyone who says the Downtown Project has not made a significant and lasting impact on Las Vegas is crazy.”

You see, haters? A bone fide professor - of kinesiology no less! - says that downtown Vegas is thriving thanks to Hsieh. Now it's a destination!

What Guadagnolfi and the Times forget to mention is why he spends so much time travelling downtown, especially given UNLV's campus is miles in the other direction. Perhaps his frequent trips have to do with Guadagnolfi's other job, as CEO of Triad Consulting -- a management consultacy whose biggest client is... Zappos.

On Triad's testimonial page, you'll find the following:

Mark has shown me some incredible insights into how the mind and the body work together. He helps high achievers take their game to the next level. He is also an incredible genuine person and a great friend.
Alfred Lin, COO/CFO - Zappos.com

Mark Guadagnoli is an inspiring and thought provoking person. I have had the great pleasure to know Mark for several years and his insight into both business and personal challenges has always brought a unique perspective. He is an out of the box thinker who brings an impressive set of communication tools to the table. He has a way with people rarely seen and is always the consummate professional.
Fred Mossler - Recently promoted to the position of "No Title" - Employee #1 - Zappos.com

I always enjoy talking and learning from Mark's unique perspective. His enthusiasm is contagious and his insights are always interesting!
Tony Hsieh, CEO - Zappos.com

And on Guadagnolfi's LinkedIn page, he boasts that he:

...has worked with companies such as Zappos.com, where he developed their corporate university, developed and ran executive off sites, and worked on performance optimizations with their executive team. 

I emailed Guadagnolfi to ask if he'd disclosed his gigantic conflict of interest to the Times. He replied that he hadn't seen the finished story but "did indeed tell the Times that I worked for Zappos some time ago - Director of Zappos University and that I went through the Holocracy [sic] training. "

On Twitter, Pando contributor Dayvid Figler asked Gelles to explain the missing disclosure. Gelles replied:

had that in earlier draft but was trimmed for space. thx for reading.

To which Figler responded:

Seems pretty significant given he's being offered as the only expert voice suggesting the positive side, no?

At which point, Gelles shut down the conversation:

We made our call.

 

Journalism.