Zappos, America's largest online shoe retailer, has achieved success by nearly every conventional measure. Founded in 1999, the company reached $1bn in annual sales in less than 10 years and was acquired by Amazon in 2009 in a deal worth $1.2bn. Yet, it's the company's unconventional culture and a business model based on happiness that Zappos's chief executive, Tony Hsieh, wants to share with the rest of the world.
Hsieh recently brought his message to the UK parliament, where he spoke on a panel discussion entitled Happy Workers = Business Growth? hosted by the All Party Parliamentary Group on Wellbeing Economics.
By focusing on company culture, he told the parliamentary group, everything else such as building a brand with sustained revenue growth and passionate employees, fell into place. Zappos's culture is guided by a set of core values which aims to empower employees, create a sense of community in the workplace, and serve a higher purpose beyond bottom-line metrics.
Employees should have a sense of control and progress in their careers, says Hsieh. Zappos developed a set of skills for their call centre reps, rather than a one-size-fits-all job description. Employees directly control their salary increases as they acquire the skills that interest them at their own pace, rather than waiting for fixed review periods or annual raises.
Zappos encourages employees to "create fun and a little weirdness" in the workplace and build personal connections with co-workers. To protect this feeling of community, Zappos carefully vets each new applicant for a cultural match. The company even offers new employees $4,000 to quit after their first week of training to weed out people who are there just for the paycheck.
"Is this someone I would want to have a beer with?" is one of the simple questions Hsieh asks himself when interviewing applicants. For companies examining their own values, he advises: "Ask yourself what are the values that the company is willing to make hiring and firing decisions on apart from job performance."
Even measuring call centre performance takes an unconventional twist at Zappos. The amount of time the rep spends on the phone with a customer is the traditional measure of call centre efficiency, with an emphasis on reducing that time. Instead, Zappos has developed their own scorecard, tracking the personal and emotional connections made with customers, measured by the number of thank you cards and cookies the call centre reps send.
Profits are key to any enterprise, admits Hsieh, but he ultimately realised that a great company culture should serve a higher purpose. At Zappos, this means delivering happiness and "wowing" customers with exceptional service. By concentrating on the happiness of those around you, Hsieh believes, you dramatically increase your own.
All this focus on employee happiness seems to be paying off, as Zappos consistently ranks as one of the best places to work in annual workplace surveys from industry watchers like Fortune magazine.
Hsieh described his adventures on the entrepreneurial trail in the 2010 book, Delivering Happiness, which has been translated into 20 languages. He is now involved in a new venture, Delivering Happiness at Work (or DH@work), offering coaching and workshops for other companies hoping to get their culture right. DH@work has teamed up with Nic Marks, a social economist from the UK-based New Economics Foundation and founder of the UK's Centre for Wellbeing.
Trying to impose the Zappos culture and values on other companies is not the point of DH@work, according to James Key Lim, chief executive of the new venture. "It's about taking the DNA of what worked at Zappos – things like purpose, happiness, culture, and profits – which anyone can use as a framework to make happiness as their business model," he says.
Jim Witkin is a journalist and regularly contributes to the New York Times
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