I’m a firm believer in connections. I called my business Network Capital (LLC) because the definition of capital is ‘wealth in the form of money or other assets’ and in my case the capital is meeting and getting connected with others which ultimately creates processes and profits. I had a chance to meet Alex Genov, Head of UX Research and Web Analytics at Zappos. We both were at a conference and I introduced myself and we clicked right away. I told him I travel out to Las Vegas (where Zappos headquarters is located) from time to time and when I do, I would love to have a tour of Zappos. Several months later, my wife and I went to Vegas for a wedding (what else) and I connected with him for lunch and the tour.
I knew going into the visit that Tony Hsieh, CEO of Zappos adopted a holacracy within the organization. This essentially meant, no job titles, no managers, no hierarchy. This may sound different to some but not a shock to know that Tony loved to disrupt “the system”. Zappos has been around for 15yrs with amazing success but in 1999, it was easy to overlook an online business that sold shoes you could essentially purchase at your local strip mall and in a lot cases for less money.
Zappos was delivering service with a smile….online. Sounds like a small thing but numbers don’t lie. In 2001, Zappos more than quadrupled their yearly sales, bringing in $8.6 million. In 2003, Zappos reached $70 million in gross sales and by 2008, Zappos hit $1 billion in annual sales, two years earlier than projected. For the record, most of their growth was attributed to word of mouth so there’s no doubt service with a “smile” was the engine behind this juggernaut.
Along the way, Zappos has consistently appeared on lists like Fortune’s ‘Best Companies to Work For’, other lists for Best Customer Service and more. This seems like a simple formula! Happy Employee = Happy Customer. Tony says that their philosophy is “delivering happiness to customers and employees. People may not remember exactly what you did or what you said, but they always remember how you made them feel”. Tony has literally wrote the book on delivering happiness with the aptly titled book ‘Delivering Happiness: : A Path to Profits, Passion, and Purpose‘.
Their company values are stated and printed clearly;
- Deliver wow through service.
- Embrace and drive change.
- Create fun and a little weirdness.
- Be adventurous, creative, and open-minded.
- Pursue growth and learning.
- Build open and honest relationships with communication.
- Build a positive team and family spirit.
- Do more with less.
- Be passionate and determined.
- Be humble.
By reading Zappos values, you begin to see that Tony isn’t afraid of trying something new and different if he thinks it will make the company better. However, those lessons can cause growing pains and growing pains hurt. People don’t like change and can be uncomfortable with “weird”. I think he recognizes that and offers new hires the chance to take $2,000 and quit, which offers them a chance to weed out people there just for the money vs. building a career and being part of a movement. In this new holacracy workforce shift, he’s told the employees to embrace change or leave. Sounds harsh but the last thing you want is for someone to stay around and become toxic to themselves and others.
The only way to survive in the workforce today is to adapt or “die”. I don’t mean physically die but if you’re not willing to change your view on your work environment then you’ll have a hard time adjusting to today’s climate. I’m not suggesting that you should conform. In some cases, you need to really search your soul to see if the change in the winds can be an opportunity for you to create and go after your dreams or even start something on the side to set you up for something bigger. In this case by May, 210 Zappos employees, or 14% of the company, had taken the offer to leave.
Zappos has been able to make fun of themselves about the projected insanity and not having managers. I’ve been hearing reports from others that the system is about 85% in place and working fine. They’re still navigating through processes, etc…but for all it’s worth, it’s working. Putting trust in your people as a collective group can go a long ways. Grant it, you’ll have politics and in some areas, gossip and so on (which isn’t acceptable) but even that will be worked through with some concerted effort….most of which is the $2k offered to quit upfront.
In regards to the visit I brought up earlier…I was treated like VIP. It was a very transparent atmosphere in some respects for someone like myself to walk around and talk to the other employees and invade their space (and a wild space it was). With that level of insight, if that’s how they’ll treat someone just wanting to poke around, if they’re doing that to the same degree with employees and have built this company with the core values laid out above, I think they’ll continue to be a company to model how you deal with your workforce for years to come. In either case, I’ll be rooting for them. We have to remember that different doesn’t always mean worse.
Here are just a few Images of my visit.