Delivering Happiness: The Zappos.com Story

Over beach vacation last week, I hijacked my dad's copy of Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh, CEO of Zappos.com. You may have heard about it on NPR. Hsieh built and sold a company right out of college and, with the proceeds, as well as a venture fund he raised called Venture Frogs, did some early stage investing. Hsieh ended up investing in, and later helping to build, Zappos.com as CEO.

The company was recently acquired by Amazon for $1.2 billion (employees netted about $40 million in the sale) -- and will continue to grow with its existing team because the company’s culture is working so well.

The Zappos.com story is an amazing one and it validates a lot of the lessons we’re writing about in our forthcoming report, Employees Matter (an update of our 2004 Beyond Paycheck-to-Paycheck report).  In the book, Hsieh uses his e-commerce firm to demonstrate the importance of hiring carefully in order to build a great culture of engaged employees, how to use training effectively, when and why to promote from within, and the many benefits of treating employees well.  Zappos.com is a company well known for delivering fantastic customer service; part of Amazon’s attraction to the deal was the Internet based shoe and apparel company’s strength in customer relationships – a strong match for Amazon’s savvy in the technology department.

A few quotable lessons from Delivering Happiness:

• “A company's culture and a company's brand are just two sides of the same coin.”
• “It's really important to come up with core values that you can commit to.”
• “If you just focus on making sure that your product or service continually wows people, eventually the press will find out about it.”

Zappos.com understands the value in letting employees have a little room to do great work on their own terms.  The purpose of supervisors, Hsieh argues, is to help employees do well, remove obstacles in their way, and empower them to make decisions. In other words, decentralize decision making.

Hsieh says that employees should know the core values of the company inside and out – and be able and allowed to make decisions based on them even without top management always weighing in.  Again, decision decentralization!

Finally, if your company is good enough at creating a great culture, employees will enjoy seeing one another outside of work.  Sometimes the best inspiration comes out over a glass of beer.

--Anne Claire Broughton