In my last WorkPuzzle, I espoused the benefits of failure.

It’s important for both individuals and businesses to consider and implement many new ideas knowing a majority of them will not work out.

Successes are often sparsely scattered among a string of failures.

While there are no true short cuts to success (you will have to experience some failure of your own), there are some smarter ways to proceed along the path towards success.

One of these ways is to learn from the failures of others, and this lesson can come from the world famous Zappos company.

In 2010, Tony Hsieh, the CEO of Zappos wrote the book on workplace happiness. I’m not kidding, it’s called Delivering Happiness, and it was a best seller.

But, things aren’t so happy at Zappos anymore.

What went wrong? Hsieh launched a radical management experiment last year that is causing the company to experience very high employee turnover. Before this change, they had an excellent employee retention rate that they used to tout as a competitive advantage.

The Importance of Managers

Hsieh’s radical experiment was to eliminate the manager position at Zappos.   Instead, employees would be required to manage themselves.

A recent New York Times blog post made these observations nearly a year after the experiment began.

Zappos, the online shoe retailer experimenting with the radical self-management system Holacracy, is continuing to hemorrhage employees.

In a post on the company’s website, Arun Rajan, the chief operating officer, said 18 percent of the company, or some 260 people, had left the company since March. The exodus began after the chief executive, Tony Hsieh, announced that the company was going to adopt Holacracy, which is supposed to promote collaboration and abolish hierarchy….

Last week, the Gallup Organization weighed-in on why a lack of managers may cause employees to become disengaged.

Gallup has learned that employees are more likely to be engaged in their work when their basic needs are met — for example, they know what is expected of them at work, have the materials and equipment to do their job right and have opportunities to do what they do best every day.

And here’s the kicker: Managers account for at least 70% of the variance in employee engagement scores across business units. When it comes to engaging employees and meeting their needs, great managers can be the key to unlocking high performance.

Recruiting Insight

Most WorkPuzzle readers are leaders and managers in high-performing real estate companies. Don’t worry—your job is safe. I doubt many companies are going to jump on the Holacracy bandwagon any time soon!

However, there is an important recruiting lesson to be learned from the Zappos missteps:

When individuals lack good management, they become disengaged and often leave the companies where they are employed.

This is a valuable insight for recruiting both experienced and new-to-real estate agents.

For experienced agents, most of your prospecting efforts should be directed at organizations that are known to have poor first level managers. When a manager leaves or has a crisis at one of your competitor’s offices, this is the time to strike.   Agents are most likely to change companies when the agent-manager relationship is disrupted or strained.

For new-to-real estate agents, make sure your interviews include several open-ended questions about the candidate’s experience with their current and previous managers. Often this is where the pain and frustration exists. If candidates can envision a future with a great manager, it will serve as a strong attraction to you and your company.

Who knows, perhaps Tony Hsieh will pull out an unexpected long-term success with his management ideas at Zappos (it wouldn’t be the first time he’s done this). I hope he does.

For now, we can learn from what appears to be a failure. When individuals lack good first-level management, they’re open to career change and are vulnerable to be recruited away.

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