Study of Holacracy and lean production in Zappos and Toyota respectively.

1. Strategic Operational Management
Assessment 2: Case Study Presentation
Student: Raju Lama (Yib00004yz)
Accessor: Milton D’Souza
Date: 21st March, 2019

2. Overview
• Zappos
- Adaptation of holacracy in Zappos
- Generic business-level strategy
- Functional level strategy
• Virginia Mason Hospital (VMH)
- Lean production (LP) philosophy
- LP implementation in VMH
• Solver “What if” Analysis for Cycle Trader
• Overall Equipment Effectiveness (OEE) in XYZ Ltd
company.

3. Ans 1(a) Why Zappos adopted Holacracy ?
• To change management style
Break the traditional management style of high hierarchy
and distribute more authority down the hierarchy.
• To make employee efficient
Freedom with responsibility brings creativity, productivity
and accountability.
Learn self-management.
• To gain market Share
Making Zappos very responsive to market change, grab
customer demand and provide better customer service.

4. Ans 1(b) Holacracy Impact on Zappos
Organizational Culture
• Negative
- Employee resisted for radical (fast) changes in the
organization.
- 14% employee quitted Zappos
• Positive
- Employed who stayed believed in Tony’s vision and embrace
the changes.
- Distributed more authority down the hierarchy which
improved communication inside and outside Zappos.

5. Ans 2(a) Zappos Business-level Strategy
i. Cost-leadership strategy:
• Method to reduce cost and produce least expensive products.
• Reduce cost (Cut down advertisement, drop shipping method)
• Helped Zappos to gain market share
ii. Differentiation strategy
• Create unique value through customer service.
• 24hrs customer service
Customer Quality Service Repeat Business

6. Ans 2(b) Zappos functional Level
• Invest in hiring best employees and make
them happy.
• Build strong supply chain of product.
• Maintain genuine customer relationship.

7. Ans 3 (a) Toyota: Lean Production Technique
• Reduce waste: Extra-processing, defects, over
production and improve profitability.
• Work on providing consistent quality which will
improve the customer satisfaction.
• Produce product according to customer demand.

8. Ans 3 (b) Lean Production in Virginia Mason
Hospital
Use of Lean Method Activity Outcome
Remove unnecessary
workflow activities
Doctor referral to specialist and
patient’s first consultation with
the specialist.
The job was done directly by
doctor by message instead of
secretaries.
Delays in referral-to-
treatment dropped by 68%
resulted in
improved patient
satisfaction.
Cut out extra processing Mapping out processing time in
Radiation oncology department
Rapid treatment process.
Patient time in department
dropped to 15 from 45
minute
Cut out excess employee Secretaries job to refer
doctor/consultant was done by
doctor through message.
Increase in revenue
Reason: Profit low, medical errors, patience satisfaction low.

9. Ans 4(a) Solver “what if” Analysis

10. 4(b) Overall Equipment Effectiveness OEE
Analysis
• Very good quality and
performance
• XYZ Ltd need to work on
increasing availability of their
equipment

11. Conclusion
• Holacracy is continuous process and should be
implemented gradually not radically.
• Virginia Manson Hospital was transformed by
using lean production method.
• Solver “what-if” analysis have limitation.

12. References
Zappos. (2019). Retrieved from Zappos: https://www.zappos.com/
Harris, L. (2007). Rcbi. Retrieved March 09, 2019,
from Rcbi: http://www.rcbi.org/index.php/viewarticle/130-capacity-magazine
/spring-2007/features/336-lean-manufacturing-made-toyota-the-success-story-
it-is-todayinvesting-in-our-economy
Holacracy. (2019). Retrieved 03 10, 2019, from Holacrary:
https://www.holacracy.org/what-is-holacracy
Microsoft. (2019). Retrieved from Microsoft: https://support.office.com
/en-us/article/define-and-solve-a-problem-by-using-solver
-5d1a388f-079d-43ac-a7eb-f63e45925040
Toyota Company. (2019). Retrieved from Toyota Company:
https://www.toyota-global.com/company/vision_philosophy/
toyota_production_system/
Virginia Mason. (2019). Retrieved from Virginia Mason:
https://www.virginiamason.org/vmps
Pablo, J. (2015, June 03). Harvard Business Review. Retrieved March 9, 2019,
from Harvard Business Review: https://hbr.org/2015/06/zappos-and-the-
connection-between-structure-and-strategy
Smith, P. (2017, September 14). Sinkamanagement. Retrieved March 13, 2019, from
Sinkamanagement: http://shinkamanagement.com/lean-health-care-interview-
virginia-mason/

13. धन्यवाद…