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Zappos CEO’s Success Secrets

Company Culture: Lessons from Zappos CEO Tony Hseih

How do you approach the culture at your company? If you haven’t thought about that question recently, it likely needs attention. A well-defined culture can bring you great business results. Just ask Zappos’ CEO Tony Hsieh, author of “Delivering Happiness.” He spoke at the SHRM national conference in Las Vegas this year about the importance of company culture in bringing success to a company.

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A Clear Focus

Many of you may have shopped online with Zappos. Many of you may know about the Zappos culture. Hsieh wrote a book out about it. It is a topic of great importance to him. So much so that the company has its Zappos core values listed on its website, along with videos explaining them. Every employee is expected to learn and live by them.

Zappos has a very progressive culture. They believe that they are a service company that happens to sell shoes. In addition to selling shoes, they sell lots of other items and are looking to broaden their offerings even more. But, more than anything, they truly believe that their core competency is service and that they are in the business of delivering service.

Zappos is based in Las Vegas so they offered SHRM national attendees the opportunity to come take a tour of their facilities. They tours booked up quickly and conference attendees spent a lot of time talking about what they saw. I listened in and collected the following notes from those who saw Zappos’ in action, and from Tony Hsieh’s keynote speech.

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Stay original. Zappos does really innovative things to ensure that their employees are delivering great service. There is always a temptation to copy their ideas, but Hsieh warns against that. He mentioned that too many companies hear stories from other companies about ways to build culture. But, when they try to implement the same thing at their company they find that it doesn’t fit. You can’t just take a funky concept and apply it anywhere and expect that you’re going to get a similar result.

Define your values first. You have to sit down with your leaders and define what your culture is and then build your processes, systems and rewards around that.

Take risks. Once you have your values defined, you can take risks. Zappos has unusual or “risky” approaches to their talent management. For example, they don’t measure call times. A lot of companies that operate call centers think about efficiency and ways to get talk time down because that means fewer staff are needed.

At Zappos, they celebrate the opportunity to have one of their employees on the phone with a customer for a long time. And, they don’t monitor talk time to discipline employees who are spending too much time on the phone. They are very proud of the fact that they had a record phone call that lasted eight hours.

This is an example, though, of a single cultural item that you cannot apply to your company. You cannot find success by asking one of your customer service people to spend eight hours on the phone with a customer. That may not work in your culture. What is more important is defining who you are and who you want to be, then making sure that works.

Create cultural icons. There are many famous stories about organizations creating unique cultural symbols. For example, Amazon, Inc.’s desks are all made out of doors because, back when founder Jeff Bezos was working out of a garage, he created his first desk using an old door that was nearby. Now these desks are a “cultural icon” for the organization.

Find the employees that fit. Through cultural messages, you can keep those employees who fit into your company well, will be easier to retain and more likely to keep the company growing. Here is a bold and original example from Zappos.

As soon as an employee has gone through the training at Zappos and is ready to be a full-fledge employee, Zappos offers them a severance package. The severance is $1,500 dollars and an opportunity to leave the organization immediately, before they start to work. Unbelievable, right? After all of that effort to train and hire them, why let them go?

Zappos like this process because it sorts out people whose values do not align with the company’s. People who are all about money will take that $1,500 and run. But, if people are about something more, they will pass up that $1,500 to be part of a great organization.

Hsieh says that they have had a few people take them up on the offer. And, that was good thing for them because it immediately set the tone that, “You have chosen to be here. You want to be here and it isn’t all about money.”

Focus on You

Can each one of us take the Zappos approach and use it in our organization? No, but you can understand who you are as an organization and build all of your systems and all of your process to support your goals

Regards,

Stacey Carroll, CCP, SPHR
Director of Professional Services and Education
PayScale, Inc.

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