Tony Hsieh joined Zappos as primary investor and advisor, a small company who tried to sell shoes online, back in 1999. Tony eventually became CEO and was able to grow the company from almost no sales to $1 Billion in gross merchandise sales within 10 years (Twitchell 2009). His secret? Deliver great customer services and make it as part of company culture. The Wall Street Journal (Wingfield 2009) reported that Amazon acquired Zappos in 2009 as “the biggest acquisition in Amazon 14-year history” for about $847 million in cash and stock.
Zappos Company Culture
In Delivering Happiness (Hsieh 2010) Tony mentioned he has gone through three phases during his business career: Profit, Passion and Purpose. In search for his higher purpose in life, Tony aims to deliver value by providing the best customer service experience to the customers who purchase the merchandises online. This results in huge sales growth within 10 years as Zappos is able to attract hesitated customers to shop online from the website and in process is converting them to become loyal customers.
Zappos company culture is built around the customer service. And it is not only a jargon; every individual from the executive level to the new recruit believe and “live into” this value. The company website even states that Zappos is powered by service, and internally they call it WOW philosophy. By building the culture around great customer service, the company strives to deliver happiness to both their customers and employees.
Level 5 Leader
Jim Collins mentioned in Good to Great (Collins 2001) about a level beyond charismatic leader called Level 5 Leadership. According to Collins, humility is a key ingredient of Level 5 leadership and the essential difference with the previous levels. Level 5 leaders operate with genuine humility, and that humility is defined by this burning, passionate, and obsessive ambition for the cause, the company, and the work. Not for themselves (Collins 2009).
As Zappos CEO, Tony Hsieh possesses the quality of Level 5 Leadership explained above, and coincidently humbleness is one of the company’s other key values. A leader is supposed to set up parallels between customer vision, the company vision, and the user experience (Baer 2012). And Tony is able to create and coordinate the parallelism and keep them in sync.
Tony explained he wanted to work with people he respected and to emphasize the company's larger purpose, and making sure money is not the part of the motivation for everyone in Zappos. The company even offers $2000 to new hires to quit their job after the first week, to ensure money is not the main reason for them to work for Zappos (Tjan 2010).
After starting the idea of Delivering Happiness with his book, Tony and the team from Zappos drove a bus cross-country to talk to those who inspired by the book and hear directly how people were making happiness a priority in their lives. They continued the effort to spread the idea as global movement through the website deliveringhappiness.com and various online social media, in order to achieve the objective to connect like-minded people as well as to educate and empower both employees and employer to create more happiness at work.
If a company can be successful selling shoes online by providing great customer service experience to build customer trust and loyalty, Delivering Happiness idea can be the model many services oriented companies should follow. Whether the model can fit any online business that operates globally in different industry, it is yet to be tested in time.
Jeremy Twitchell, 2009. From Upstart to $1 Billion Behemoth, Zappos Marks 10 years [online] (Updated 16 June 2009) available at: http://about.zappos.com/press-center/media-coverage/upstart-1-billion-behemoth-zappos-marks-10-years [Accessed 24 August 2012].
Nick Wingfield, 2009. Amazon Opens Wallet, Buys Zappos [online] (Updated 23 July 2009) available at: http://online.wsj.com/article/SB124829443610573361.html [Accessed 24 August 2012].
Tony Hsieh, 2010. Delivering Happiness: A Path to Profits, Passion, and Purpose, 1st ed., Business Plus.
Jim Collins, 2001. Good to Great: Why Some Companies Make the Leap... and Others Don't, 1st ed., HarperBusiness.
Level 5 Leadership, 2009. [video] Jim Collins. Available at: http://www.jimcollins.com/media_topics/level-5.html#audio=81 [Accessed 24 August 2012].
Drake Baer, 2012. To Create True Innovation, Consider Who You Want Your Customers To Become [online] (Updated 23 August 2012) available at: http://www.fastcompany.com/3000620/create-true-innovation-consider-who-you-want-your-customers-become [Accessed 24 August 2012].
Anthony K. Tjan, 2010. Four Lessons on Culture and Customer Service from Zappos CEO, Tony Hsieh [online] (Updated 14 July 2010) available at: http://blogs.hbr.org/tjan/2010/07/four-lessons-on-culture-and-cu.html [Accessed 24 August 2012].