13 Feb The Zappos Way: Shaping Your Company Culture

Zappos_CubiclesThough it is instilled in many of us to fear change, embracing it will give you an edge over your competition by making you more agile and nimble than the rest. “Embrace and drive change” is, in point of fact, one of the founding core values of online shoe and retail clothing giant, Zappos—an idea that is instilled in employees from day one.

Though recently acquired by Amazon, Zappos continues to operate as an independent entity, part and parcel of which is the company’s unique corporate culture. Which is to say its anti-corporate culture.  One of the pioneers of ecommerce, Zappos has emerged as a sort of think-tank incubator for the loyalty business model. Selling shoes online rather than from catalogs is the brainchild of Nick Swinmurn, who approached venture capitalist Tony Hsieh in 1999 with the concept.

Though initially skeptical, Hsieh invested $1.6 million in Zappos and came on board a few months later as CEO. The Harvard grad immediately began shaping and defining Zappos’ signature “unique culture,” and his leadership and vision has led to almost $1 billion in annual sales, a 75% customer retention rate, and one of the most sought-after workplaces in America. In 2012, Zappos was ranked number 11 in Fortune’s top 100 Best Companies to Work For, and the company is consistently eyed as a prime example of color-outside-the-lines Fortune 500 success.

Hsieh, who sits in a cubicle alongside other employees—albeit a cubicle decorated with an inflatable monkey and jungle vines—has never deviated from his “Why.” Indeed, his Why permeates every aspect of Zappos, from its reputation as industry rainmakers in relationship marketing to requiring that Zappos executives devote 20% of their work hours to “goofing off” with other employees. Though a self-described introvert, Hsieh has surrounded himself with extroverts and encourages constant social interaction, which feeds into his centric focus for Zappos. Great customer service is mission number one.

Employees go above and beyond to provide customers with unparalleled service, such as the call center rep who ordered flowers at the company’s expense for a woman returning a pair of boots that her recently deceased husband never got the chance to wear. Or the rep who shipped footwear free of charge to a best man who had arrived at the wedding destination sans shoes. And the employees don’t do it for the money—Zappos salaries are actually on the low side of industry standards in most cases. And while the benefits are excellent—including 100% healthcare coverage and free meals and snacks during the workday—such subsidies alone are not the key to the Zappos success story in team building—or the less than 10 percent employee turnover rate.

To create that kind of environment, you have to find the right people, train them, and keep them motivated. Zappos employees field, on average, more than 5,000 incoming calls a day and 1,200 emails a week. They do so without any sort of script and with minimal supervision, relying instead on intensive training up-front and finding employees who share the Why. After weeks of training at Zappos, new hires are offered $3,000 to quit on the spot—with the caveat that they cannot re-apply for employment in the future. More than 97% of the new employees refuse the offer, and most go on to become long-term, happily productive employees.

For a small business, offering $3,000 to weed out the chaff is likely a costly hurdle. The cheaper route is a more rigorous screening process. To get the right people in the seat to begin with, it helps to set up a little bit of a barrier in the initial interview—but you can’t make it too hard, either. Be brutally honest about your Why in the ad or live interview, and ask questions that serve as a filter to determine whether or not the candidate’s Why aligns with yours.

Asking the right questions is so important—even more so than the cover letter. Questions should be properly phrased, and the first one should have the most weight. If the candidate is truly passionate, he or she will answer accordingly and honestly, and you will find employees who will serve the company well.


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