Picture working at a company that celebrates culture above all else—a company with a totally flat structure, one that truly embraces individuality and, literally, pays people to quit. It sounds like a utopian experiment, but that's life at Zappos, the company that made something equally outlandish—buying shoes online—a totally acceptable, mainstream thing.
Zappos launched in 1999, and in 2000, Tony Hsieh—the man heralded for building its famous culture—joined the company as CEO. By 2009, Zappos had reached $1 billion in revenues, and that year sold to Amazon.com for about $1.2 billion.
What was key to much of that success, according to Hsieh, was focusing on a building a great culture. It trumps skill, in his eyes, and Zappos regularly makes both hiring and firing decisions based on culture.
"At Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself." - Tony Hsieh, The New York Times
The CEO literally wrote a book on happiness at work
In 2010, Hsieh published Delivering Happiness, a New York Times bestselling book that has inspired and shaped countless businesses since. The book explores Hsieh's business philosophies, like making culture priority #1, helping employees grow personally as well as professionally, applying happiness research to business, paying new employees to quit, making customer service a responsibility for everyone at the company, changing the world, and making money in the process.
They practice Holocracy
Zappos practices Holocracy, a modern approach to workplace management that offers autonomy to teams and individuals, while at the same time bringing "structure and discipline to a peer-to-peer workplace." It cultivates an entrepreneurial environment, distributes authority, and creates more leadership and ownership across the entire company. When they implemented the Holocracy system in 2014, Zappos also got rid of job titles.
They pay people to quit
Zappos is so committed to hiring the right cultural fit, that they offer to pay people $2,000 after their first week of training (in addition to compensating their training time). This generous and unusual offer is valid until the fourth week of their training.
"We want to make sure that employees are here for more than just a paycheck," Hsieh explained on the Zappos blog in January 2009. "We want employees that believe in our long term vision and want to be a part of our culture. As it turns out, on average, less than 1% of people end up taking the offer."
They hire based on cultural fit and their 10 core values
In order to come up the company's core values and cultural ID, Hsieh reflected on the traits of the people he thought were a great fit for the company.
"I thought about all the employees I wanted to clone because they represented the Zappos culture well, and tried to figure out what values they personified. I also thought about all the employees and ex-employees who were not culture fits, and tried to figure out where there was a values disconnect." - Tony Hsieh (HBR)
After that, he emailed at everyone at the company, and, not wanting to rush the process, he asked them to weigh in several times over the course of a year on what their values were. They finally came up with a list that the company was willing to both hire and fire on:
- 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
They've cultivated an entrepreneurial eco-system—in Vegas
Zappos is headquartered in the old city hall building in downtown Las Vegas. Sin City is, perhaps, an unusual location choice for a hip, young tech company, but Hsieh has worked hard to turn the area into a place employees of all backgrounds would enjoy working, living, and playing in.
In addition to developing a great campus for his employees, Hsieh has worked diligently on the Downtown Project, which has successfully attracted hundreds of other startups and entrepreneurs. His $350 million personal investment and several years of work to revitalize the community has resulted in a welcome shakeup to a city notorious for gambling and excess.
How to build a culture like Zappos
If these workplace philosophies are resonating with you, it might be worth taking a page from Zappos' Culture Book. Just keep in mind that your culture will need to be unique to your own DNA.
“We’re not out there saying other companies should adapt the Zappos culture. We’re just saying….if you want to build a company for the long-term you should have values and a strong culture and in most cases probably not the same values as Zappos. The research has shown that the power comes from the alignment, by having values and a point of view and beliefs and passion for whatever it is that you stand for.” - Tony Hsieh (KissMetrics)