In Search of the Future Organization VI — The X-Factor & The Zappos Journey

Pravir Malik
7 min readMay 6, 2024

In EQ & Managing at the Margin, I concluded that we want access to ‘powers within’ that will, in turn, practically tend to drive things differently.

With respect to this idea of the powers within, I want to mention a very interesting story. I worked for Zappos as a consultant for a few years—running the Pricing Organization. This ‘circle,’ as referred to in holacracy, rolled up under the Merchandising department. One fine day, we had a set of consultants looking at operations as a whole, and based on their recommendation that Pricing was too strategic in the foreseeable future not directly to report to the Chief Operating Officer (COO), it was immediately placed under him. This was the power of holacracy, which, by the way, could easily be used for the good or the bad. Good — in that new needs and ideas had a way of becoming living. Bad — in that one could quash a new idea or concept or even an existing one by knowing how the holacracy system worked. I saw instances of both these situations play out several times — which incidentally goes back to the fractal idea I surfaced in EQ & Managing at the Margin, wherein if change does not happen at the individual level, political agendas will always find a way to manipulate a system no matter what its form.

…if change does not happen at the individual level, political agendas will always find a way to manipulate a system no matter what its form.

I was physically moved to Monkey Row, where the execs generally sat, just a couple of desks from Arun Rajan, the then-COO of the organization. Now, due to our proximity, our conversations naturally began to get broader, and following one, he asked me to come up with a simulation for how culture is connected to business value. Culture was a big thing at Zappos, so correlating cultural nuances to revenue and profit was an interesting challenge. After some research and effort, I created this simulation, which had something I called the X-factor in it. He liked the simulation and asked me to present it at the next Executive meeting. “Whatever you do,” he said, “Don’t talk about the X-factor. Also, keep your presentation to about 15 minutes.”

I was also advised that the company's Chief Executive Officer (CEO) — Tony Hsieh — would not engage. He will look at his computer the whole time and will not ask any questions. So, I was to forget about him and focus on the others. Well, I went into the meeting. And what happened was that just a few minutes after I had started, someone asked what the X-factor was. At this point, Tony looked up and saw the X-factor on the screen (it was on the simulation screen that I was giving a demo of), and before I knew it, he and some others walked up to the front of the room and wanted to know everything about it (X-factor marked in red on the illustration below).

And so the exact things I was told not to do, I suddenly had to go into it. We ended up spending close to an additional 30 minutes focused on the X-factor. This has to do with the fourfold powers that animate matter and life, from the quantum levels, through the level of cells, through the way successful civilization is structured (a theory which is central to the Cosmology of Light framework I have been developing over the years, and which I will get into in more detail later and in a future post). This is what excited Tony the most. He was always looking for ways to strengthen culture, especially if there was some theory that related what is found in science to running organizations. He loved this simulation and the idea of the X-factor so much that huge poster boards (of the image above) were made and plastered all over the executive room!

The next thing I knew, I was involved in several executive-level committees, and he created a new team focused on ‘Complex Adaptive Systems,’ to which he assigned me leadership. This set of events led to getting to know Hollie Delaney, the then-CHRO of the organization, who subsequently offered me a full-time position as Head of Organizational Sciences. This started a couple of interesting years at Zappos. I introduced programs and ideas that were a quantum leap ahead of what I had done at Stanford University Medical Center.

To begin with, 50 teams from all Divisions of the organization quickly adopted the EQ Tool. It became an important part of how many teams managed their collective dynamics to get to a more advanced stage of maturity more systematically. The use of the software was never mandated. At Zappos, each team/circle was self-managed, and it was adopted through word of mouth. Then, there was another software tool I had previously developed, which I called PowersWithin. The tool helped teams and individuals assess their deeper drivers along the four dimensions related to the X-factor. These were elaborations on the provinces of ‘knowledge,’ ‘power,’ ‘presence,’ and ‘harmony.’ Further, as every new class of employees entered the organization, they were exposed to both the EQ and the PowersWithin tools.

I positioned PowersWithin as an experiment in neuroplasticity. The language I used in the tool derived from out-of-the-ordinary language than what most people are used to engaging in, and I achieved some traction with the idea of PowersWithin by suggesting that it would create new networks of neurons in the brain that then would allow people to see the same things differently. This, in turn, would enhance creativity while also allowing people and teams to go deeper within themselves to more freely access what made them unique. At the end of the day, this would give the organization, as a whole, more power because as circumstances changed, there would now be many different ways, fueled by more unique individualities, to meet these situations. In this respect, PowersWithin would allow the system canvas and its management to morph to a deeper level. This would be like introducing wolves into Yellowstone to change its destiny.

With PowersWithin, we could get profiles of different departments and begin to answer questions such as: What was the set of drivers that animated them in terms of presence, power, knowledge, and harmony? What was the ideal profile for a department facing the current market and organizational challenges? What was the gap between these two profiles? How might this gap be closed? And so on. We discovered cases of lop-sidedness and knew at a glance what additional ways of thinking and doing or what additional personalities needed to be added to the mix to make a more focused difference.

Another very interesting development had to do with Cosmology of Light. As mentioned, over the years, I had been working on a theory to mathematize the power of light and ended up authoring 10 books to do with this that described a cosmology. I had given a few talks and workshops about this at Zappos, and when COVID hit, Hollie suggested offering some remote workshops on light to the employees who were all now working from home. This began a series of weekly 2-hour workshops in which I would spend the first hour going over a concise theory on the power of light based on the cosmology, and the second hour on practical exercises to apply light to a range of work and personal situations.

I think I perhaps conducted about 100 such workshops for thousands during COVID. Not only did I conduct these for Zappos employees, but I also began to hold these publicly, and people from around the world attended. I also partnered with Forbes to design and offer a certification program that leveraged the essence of many of these experiments, including those with Light. I documented key parts of my Zappos journey with a 10-part series of Forbes articles culminating in a Mastering Wealth summary piece and in a 2-part series on the use of light that contributed to the foundation of the Forbes certification program. Executives from about 250 companies participated in some of the 6-week program, and executives from 75 went through the entire program. I would ask people to employ the exercises scientifically to take two similar situations and, in one case, leverage light, and in the other not, and then observe how things may evolve differently in similar situations. The light exercises often resulted in people entering a deeper space and feeling more in control. In terms of managing the system canvas, the application of light would be employed in what was considered to be difficult situations marked by complexity, and often where it was clearly difficult to have an impact through any logically conceived initiative.

(To be Continued…)

Part — I: The Wizard of Oz

Part — II: The Power of Wolves

Part — III: The Necessity of Poetry

Part — IV: The Other Side of the Coin

Part — V: EQ & Managing at the Margin

Part — VI: The X-Factor

Part — VII: Power, Jedi Power & Light

Part — VIII: The Mathematics of Organization

Part — IX: Imperative of a Quantum-Like Core

Part — X: The Secret of Nataraja