“The customer is always right” was the retailing innovation of Wisconsin-born merchant Harry Gordon Selfridge, who founded Selfridge’s department store in London in 1909. This traditional business mantra, once thought to ensure good customer service, has lost some of its appeal in a retail era dominated by volume, speed and impersonal mass marketing. But Tony Hsieh, CEO of billion-dollar selling online retailer Zappos.com, Inc., has changed all that - having found a way to return to the basics of keeping the customer happy. And he does it by focusing on his 2000 employees.
“A tight-knit company culture and quality customer service are synonymous,” says Hsieh, describing the company he’s spent the better part of a decade building.
It hasn’t always been easy.
Many of today’s retail clerks have minimal product knowledge and even less interest in the success of the companies that employ them. With the rise of online shopping and the increased number of overseas call centers, the challenge of creating a positive experience for the consumer only increases.
But Zappos refuses to settle.
Between the rigorous training program and relentless approach to employee engagement, Hsieh has built something that, for a certain group of people, just plain works. The company’s annually published Culture Book contains hundreds of short essays written by Zappos employees and vendors explaining what makes the culture so special and successful. Says Hsieh: “Corporate culture is every bit as important as the bottom line.”
Much has happened in the two years since Hsieh visited the BIF community and most of it has to do with making the transition from entrepreneurial upstart to established corporation. In 2008 the company reached $1 billion in annual gross merchandise sales. Then, after debuting as the highest-ranking newcomer in Fortune magazine’s annual “Best Companies to Work For” list in 2009, Amazon acquired the company in a deal valued at over $1.2 billion on the day of closing. (The same year Zappos.com, Inc. celebrated its 10th anniversary.)
Hsieh’s meteoric rise to success and recognition led to another milestone– this one perhaps more personal than any previous business success – he wrote a memoir of his adventures titled (aptly enough) Delivering Happiness: A Path to Profits, Passion, and Purpose. A chronicle of both his early life as an entrepreneur and his journey growing the Zappos brand, the book shares various lessons Hsieh learned in business and in life.
From starting a worm farm to running a pizza business to launching LinkExchange (acquired by Microsoft for $265 million) and then finally taking the helm of Zappos, the book thoughtfully demonstrates how a very different kind of corporate culture can be a powerful model for achieving success. And from Hsieh’s standpoint, by relentlessly concentrating on the happiness of those around you, your own personal happiness grows dramatically too.
"So many people when they go to the office, they leave a little bit of themselves at home, or a lot of themselves at home,” he says. “And while there’s been a lot of talk over the years about work life separation or work life balance, our whole thing is about work life integration. Because it’s just life – and the ideal would be if you can be the same person at home as you are in the office and vice versa.”
While Zappos’ Culture Book may be a cheerleader’s guide to why the company is awesome, Delivering Happiness aims to be much more. It’s a leadership manual for creating a business vibe that not only makes people around you feel like they’re part of something good – it also makes them want to contribute to its success.
Perhaps a sign of the times, the book has clearly hit a nerve, landing on the New York Times, USA Today and Wall Street Journal best-seller lists since it debuted in June. During the book tour Hsieh often gets asked why he still remains at Zappos because so many entrepreneurs leave the company not long after an acquisition. “One of the big reasons is because what we're doing isn't just about making Zappos customers, employees, and vendors happy,” he says. “It’s about starting a movement and changing the world by inspiring and helping other companies to focus more on culture, core values, customer experience, passion, and purpose -- all without losing sight of financial goals.”
So is all this feel-good mojo truly transferable or is Zappos just an anomaly driven by one unique man? “I don't think that any two companies can have exactly the same culture and we're not saying that the Zappos culture is the only culture that works,” says Hsieh. “The most important thing in creating a strong culture is that it creates strong alignment within the organization. What the culture is actually doesn't matter as much as the commitment to the culture and core values of the organization.”