zappos. it is a structure without hierarchy or management. what is it?d to explain what is in one soundbite or brief definition. what i can say is that it is a different system of rules to govern an organization. some of those rules and what it is characterized by. isthe words of zappos characterized by distributed authority and self organization. that is because the company -- the people at the company are defined not by the titles that a manager hands down to them, but rather by their roles, the work they do, and what the duties of that work are. that is determined via a governance sort of committee and at the that happens beginning when the company acy, if youlacr will. and then you have tactical meetings where the company's intentions are worked out. it can be negative or positive. >> who fires people? at the end of the day, you will have underperformers. who does that? >> there are a couple of ways that is done. they are organized into circles, given the various things in the organization. and there is a person called the lead link. the lead link of

it's the hot new management trend for 2014 if you believe zappos. they're introducing this flat management system. this is a unit of amazon. this is a way of getting your staff more focused on single projects. all i want to know is who gets the washroom key to the executive floor and do you get a chance, everybody, to sit on the boss's swively chair. i don't know if that happens in a flat management structure. >> there's no like this? like this? >> yeah. the ceo relinquishes his title and then becomes just another employee. that's what zappos think is going to do it for them in 2014, brian. >> tony, always been a little bit ahead of the curve. we'll see what happens. obviously we're in the nfl playoffs. for us it's a big deal. kind of globally when people see how much is spent on the super bowl ads, it's a parlor game to figure out how much money there is and whether it's worth it. what do we have so far this year? >> wowza. we are talk 4g million for a 30 second spot. the price seems to go up and up. some interesting things. we have laurence fishbu

to make it work, it will be up to zappo's workers to satisfy one another.>> all right. interesting experiment. >>> champion racer michael shumacher remains in a medically induced coma today after his horrible skiing accident. we're going to retrace the course he took in the french alps that fateful day. [ bottle ] okay, listen up! i'm here to get the lady of the house back on her feet. [ all gasp ] oj, veggies -- you're cool. mayo? corn dogs? you are so outta here! aah! 'cause i'm re-workin' the menu, keeping her healthy and you on your toes. [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. i see you, cupcake! uh-oh! [ bottle ] the number one doctor recommended brand. ensure®. nutrition in charge™. to stretch my party budget. but when my so-called bargain brand towel made a mess of things, i switched to bounty basic. look! one sheet of bounty basic is 50% stronger than a full sheet of the bargain brand. bounty basic. the strong but affordable picker upper. >>> welco

. >>> when we come back, innovator insight from zappos ceo tony shea. we'll tell you how to leverage social media sites linkedin and tumblr for your small business and teach you how to reach those customers who want nothing to do with social media. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone. there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. >>> vision. i think it's really important to create a vision with meaning, that goes beyond just being number one, or making money. so, for zappos, for example, we went from the vision of being the number one seller in shoes to really being about the best company for customer service. and what we found was

the online shoe retailer, zappos, is about to give it a go, and one online retailer is already onboard. >> the offices at media may look like any other floor plan and start up. but things here are a little bit different. >> when a new employee joins, we have to be diligent of explaining the rules of the game that they're going to be playing with us. >> the company is run not as a tradition at hierarchy, but rather, it's a hallocracy. a system with no botses. the staff at medium about a year and a half ago. >> our employees feel like it's their company because decision making authority is not consolidated at the top. >> the employee, luke, liked the system. >> you have the authority to try different things without having to go through the typical red tape in the offices. >> he said he and the others who work on user feedback on the site brain tomorrow together to fix problems, and without management to go through, they execute changes quickly. >> it's an ongoing process. it's not like a quarrel meeting where you throw everything on the pile. you're constantly evolving. >> there are uniq

online shoe company zappos is doing away with formal job titles. they will answer to one another instead of a big boss. >>> home prized jumped 13 ppt 6% from a year ago. largest gain since the bubble. >>> most parent probably don't want their children growing pot for cash but one colorado family is making a business of it legally. >> he's my son and i'll do anything for him. >>> coming up, not everyone in the state supports colorado law. inside, the fight against recreation at mann. next c explore what's new. for 575 calories or less on our lighter fare menu. enjoy fresh tossed. go fish. and try our new rosemary garlic chicken at olive garden. of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. ...and the little room above the strip mall off roble avenue. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ th

. >>> zappos are trying out new management, a new tactic.xt big thing or just another fad that will kind of step in and step out? alison kosik has more. >> reporter: it's a system called wholeholocracy, a whole of a greater whole. it does away with the traditional here archie in a workplace and makes employees responsible for several different roles. zappos are full steam ahead on the system and it should be fully implemented by the end of 2014. the goal is to increase accountability. instead of it being you and your colleagues answering to your boss you answer to another. one blogging sphere has done this successfully. it will be interesting to see if it makes customer service better or worse. the company is rarngd as one of the best when it comes to satisfying its shoppers. to make holocracy works it's up to zappos workers to satisfy one another. >> still to come some demanding msnbc fear one host after she mocked mitt romney's black grandson. hear what she has to say about it. i quit smoking. i've quit for 75 days. 15 days, but not in a r

zappos is doing away with job titles. they will answer to one another instead of a big boss. home prices jumped 13% in october. the largest gain since the height of the housing bubble. 1.3 million americans now without their extended unemployment benefits. what will it take to get the benefits back. consensus in washington. >> it is immoral that we have people that work hard and play by the rules and under no fault of their own. it is a safety net. >> i do support unemployment benefits for the 26 weeks they are paid. if you extend it beyond that, you do a disservice to the workers. >> muhammad and greg will be back with more on why the your money. [ all gasp ] oj, veggies -- you're cool. mayo? corn dogs? you are so outta here! aah! 'cause i'm re-workin' the menu, keeping her healthy and you on your toes. [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. i see you, cupcake! uh-oh! [ bottle ] the number one doctor recommended brand. ensure®. nutrition in charge™. over the pizza place on

zappos or wrong that obviously has any good this year on a plane at intel's bit more about them and for international affairs at her arm to reach you. it's been a rough year for france won't smoke play abysmal approval great exodus at least is one happy ending and it's actually the third hostage release in the last few weeks in mid november the french hostage the school gave his captors the slip in nigeria. and in legal trouble for french hostages kidnapped by al qa'ida in the islamic might grant worth a read. i went to the french president to do with same as it moves in his tv address last night. that's six french captives on still being held around the world the majority of them in syria. i made a mess this has been a rough year for french cousin postpone look impressive. the lead on the global stage in twenty thirteen when he wants to foreign interventions one in mali and one in the central african republic with those at the request of the worst ortiz in those two countries the only operation has launched tv and seen here and bronze as being as having been quite successful the cdr is

zappos is confirming this system and it should be fully implemented by 2014.our colleagues answering to your boss, you're answering to one another. there is a blogging service medium that has done this successfully. it's going to be interesting to see if this makes the customer service better or worse. the company is consistently ranked as one of the best when it comes to satisfying shoppers. to make it work, it will be up to the workers to satisfy ijkumq another. back to you. >> a trip to one of the happiest places on earth turns sour. why disney world closed its gates on would-be guests. that's next. >> one of the most popular social networks has had a data information. a hacker pulled off this hack to show a security flaw. tune in at 8:00 p.m. people hacked and how to protect yourself if you were. gabe slate, kron 4 news. female announcer: he needs a firmer he needs a firmer tempur-pedic... she wants a softer tempur-pedic... they both get what they need with the new tempur-choice, at sleep train the first tempur-pedic with multi-zone comfort control, featur

including jacques time he'll even though the actors on the ground or different kind of feels like a zappos is this new history repeating itself. it sort of insane mean the idea that we were going to be able to govern iraq in the long term was not tenable of one knew that we were hoping that iraqis to secure the forces with a real step up and meet the challenge. but we have a problem that small type wrong problem. here we have a problem of hearts and minds and have a military problem it's very difficult to defend the anbar province. he took the lives of one thousand americans combat troops to take the anwar province i think there were something like sixty eight troops killed inclusion the worst urban combat since vietnam so it's all about a matter of how we fund our military strategy which were still fighting the seoul the first generation second generation of styles of warfare in the way the terrorists were for now the very de centralized and so what they can do is they can move and they can. they can change positions all over the course the countries that they can stay locked in the weath

>> some of them are obvious -- amazon, zappos usually at the top.nk is one we like to mention. this is a company not in the retail industry that has recently made a big push to get better at customer service. i think they have seen a lot of gains from it. their customers are loving it. >> we also have the way to get to a human being at the u.s. government? >> we do. >> thank you very much, kristen allen -- christian allen. gethuman, try it. this is "taking stock" on bloomberg. ♪ . . live from pier 3 in san francisco, welcome to the late edition of "bloomberg west," where we cover the global technology and media companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. after barely more than a year on is leaving.oo coo he joined in the fall 2012, but he is out. filing that an sec just came in.

>> some of them are obvious -- amazon, zappos usually at the top.bank is one we like to mention. this is a company not in the retail industry that has recently made a big push to get better at customer service. i think they have seen a lot of gains from it. their customers are loving it. >> we also have the way to get to a human being at the u.s. government? >> we do. >> thank you very much, kristen allen -- christian allen. gethuman, try it. this is "taking stock" on bloomberg. ♪ ..

sandra smith was just here, said she was looking to buy something on zappos. you like to buy with credit, paypal or bitcoin. does that give it legitimate see? >> absolutely. if you ask coin base, they are seeing quite a bit of future adoption coming on board with other merchants, all very exciting what is happening. in the end people look at the coin different ways. the value i plays on bitcoin is probably much higher than on larry bucks. there are a lot of reasons for that. looking at the commodity side, limited supply. liz: my home isn't limited. >> how many bitcoin do you own? >> none at all. >> those who use bitcoin realize it is so much easier to use than any other payment network. liz: how is easier than paypal? >> paper you can hook up your bank account, transactions take a long time to do. i don't have any friends who use paypal. maybe look at competition with bitcoin and other apps. liz: congress is sniffing around, i know you don't believe in it, professor, but who do you think would be best positioned to regulate bitcoin if bars are taking it and tr

and they have wealth that want to maintain but the story is the founder of zappos has now put into hundredredo las vegas. melissa: what stalked out to you? bid am. >> arizona and nevada are almost exclusively real-estate that is wealth going away in north dakota in louisiana are almost exclusively energy it is people coming back really those who have an economic stake with all that energy to make more money. what stockout to me is maryland with a huge increase i have to assume that is moving -- living off the largess of the government. also worth pointing of lot of these states are talking relatively small states it is easy for them to show big changes as opposed to california or new york or texas. melissa: what blew my mind was one out of every 20 households has more than $1 billion of assets and it does not include real estate. that does not sound right. one out of 20? 5% has $1 billion in assets not including real-estate? >> the methodology that they used was used on macro data. it was not individual people it is hard to believe what an odd of 20 out of california are millionaires? but

you'll have the amazon/zappos combination go up.roms.com, those retailers will do extremely well. but the ones who haven't informed online, target, walmart's failed five times on online launches, they're going the wrong way. sandra: it makes me start to wonder if they're using this weather as an excuse. we had a friend of of this show tell us december 14th that that was, said that december 14th was going to be the day that everyone was going to come back. they were going to be shopping, they were in the stores, but then all of a sudden weather became a story, people were shopping online, that was a big story. so when do we start to say these are just excuses from tte retailers and maybe this is just still weakness in the economy and reluctance from the consumer? >> sandra, it's weakness in the economy, it's higher taxes in 2013, higher health costs in 2014, higher electricity costs at the same time. so weather's been used as an excuse for retail bankruptcies for 15 years. they call me the not that.com of retail. all i did was the sa

everyone is going to amazon and zappos and other places.i think for retailers today to stay relevant, they have to reinvent themselves. they have to offer something more than a transaction. >> they are doing that, but it is also people are strapped for cash. people are going online, but people are also really, really short for money and credit is hard to come by. >> charles? >> well, here's the thing. two things at work here. you have what they call creative destruction. remember, woolworth's used to be the number one store in the world. they're gone. a lot of people remember amp controlled 70% of the food market. congress was going to break them up. now they're a fraction of what they were. jcpenney, sears, they've done a terrible job. on friday, howard schultz, ceo of starbucks, said last quarter december was it. that was a seismic shift. everyone is going to the internet and brick and mortar is dead. i don't believe them, but it is a tougher environment. you better figure out how to combine both of them. >> all right. maybe they'll see t

>> zappos has been able to achieve incredible success.we've been able to do that in spite of the hierarchy and been able to overcome the barriers that come with the rigid management structure and ready to move to a structure that is more conducive to us living our culture and delivering encrinal customer service for our customers. >> to be clear, everyone will have a nontitle or be called a trainer? or just no title? >> no. so people will internally not be using titles anymore. so we've got a system that captures all of the accountabilities in work. if you want to know what somebody does, you can log on to the system and see a whole detail of what their roles are, their accountabilities, they're not a very quick title, to sum it up. things can change week to week with that system. the concept of titles is no longer useful for us. externally we'll probably still have some titles. >> okay. thanks for being with us this morning. we'll see how that goes. i'm not going to refer to you as anything but your great name. thanks for being here. >>

zappos is one of the biggest companies to implement the structure.dopters are gushing about its benefits. julie hyman joins us for more. an interesting concept. i can imagine how it would work effectively. >> i had a hard time understanding it. it is actually quite a complex system. it is governed by a lot of rules. it takes a long time to implement it and learn a new way of doing things. wholey it works is, in a lot per see, everybody's job is role-based rather than being given a title by a manager with a specific set of duties. the roles involved in your job are decided upon together i committee through a set government ross s. there are tensions though they talk about. havetalk>> in the military, you to fill. they're dedicated to specific duties and functions that have to be maintained or executed. as a result, it is about how many you have and you find people with the best skills to fill those. and you launch them and they get a career and make things happen themselves. >> exactly. >> in the military, they've been doing that for years. a but they

as ashley referenced amazon.com, zappos. shoe line.com.advertising against jcpenney. they can't afford to spend that amount of money on fox, print or anywhere else. macy's putting money in private labels. they have enough arizona jeans, men's suits st. jobs in their stores. they don't need anymore private label brand and they don't have enough brands at jcpenney. >> can't have enough st. john's. ashley: hey, burt, i wanted to follow up on some of your notes here. you say they made a tremendous mistake losing a section of their consumers, hispanic consumer. you say they lost the core of that sector of the market. why, how did they blow it i guess is my question? >> they blew it because target, macy's, others, between univision, telemundo, latina magazine, really appealing to the spanish-speaking shoppers, particularly latinas. and as those shoppers shifted to other stores, they took three generations of the family with them, shopping particularly on sundays and weekends from weddings, christenings, first communions, big graduations, and whe

. >> zappos is a weird culture. >> coaches, can they tell you anything?s, ceos can really mack a difference, which is hard to believe sometimes. >> i think leadership is huge. you get the right leader it can be a game changer. >> it really does matter. >> yes. >> which almost once you acknowledge that, then you get the ceo pay and you realize, wow, maybe some of these guys are worth some of the money they make, right? >> you want to comment on that? >> i do. one of the takeaways from the book is i think one of the most important things ceos do is create what i call a simple plan. because i think one of the biggest problems that can top all great companies is silos. you get different divisions propping up to pursuing their own agenda. the moment ceos earn their pay is take a complicated company, say these are the three things we'll pursue this year. these are our goals, this is how we'll measure them. everybody can feel like they have a hand. they have clarity about what their work does to help those goals. >> real quick because it's practical for everybod

. >> my favorite story, it's not really an amazon story is what zappos says when you get hired, on your way to getting hired. they take you out to vegas, put you on a bus from the hotel to the headquarters and then you go on the bus on the way back. what you don't know is that the driver of the bus actually also fills out a form about how you treated the driver because oftentimes the most interesting information is when you get back on the bus and you say that was a long day of interviews and it sucked or if you treat them well or badly and that apparently has as big of an impact if not more than the actual interviews that you're in. >> i like the idea of having a hidden camera to see how you treat other people. that would be a great thing to say. >> it's kind of like invasive, though, isn't it? >> yeah, but this is like if you're bringing people into their culture, and their thought is, look, we're really good is a big part of why we're so good is our people. the people who work here. we want to make sure we continue to have great capital. for amazon, now they have about 110,000 employ