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Zappos’ Dynamic Focus: A Company Culture Built on the Premise of Change

For most companies, embracing change can be one of the toughest challenges. In fact, many highly successful businesses assumed to be invincible have failed because of a resistance to adapt. But that is not the case when it comes to Zappos. The Zappos company culture is built on the premise of change. From customer service to its evolving employee structures, Zappos believes in order to attain long term success, evolution is essential.

Zappos CEO Tony Hsieh reflects the company’s bold leadership premise that insists on these change structures. He is the very reason why the Zappos company culture exists as it does. But over time, the Zappos company culture has taken on a life of its own as employees have adopted its dynamic perspectives. Rather than focusing on a specific product and its value only, Zappos takes a different approach to success. And Zappos customer service remains at the heart of this pervasive corporate philosophy.

tony hsieh quoted about having the right culture
The tried and tested Zappos formula: Happy employees = productivity. Infographic Infographic

Zappos Company Culture – Dynamic from the Start

Zappos began as an online shoe retailer named in 1999, founded by Nick Swinmum. The company soon changed its name to Zappos after venture capitalists Hsieh and Alfred Lin came on board. Zappos company culture hasn’t been the same since. In less than seven years, Zappos went from $1.6 million annually in revenues to over $1 billion. And a large part of its success stemmed from the novel ways that it approached its e-commerce business.

Though the company added clothing, accessories, and other items to its shoe offerings in 2007, Zappos was already highly successful. A major reason for this success stemmed from Zappos customer services philosophies. Likewise, Hsieh instilled a Zappos company culture centered on fun, happiness, and a bit of weirdness. The result was not only innovative and exciting but also created a loyal consumer following.

Zappos Customer Service – Creating “WOW” Experiences

Like other companies, Zappos customer service tracks and measures customer interactions and sales. But unlike most businesses, Zappos it is not the number one priority of customer service to get the quick sale or sale efficiencies. Instead, the Zappos company culture instilled values focusing on the quality of customer interactions. This involves not only the ability to make a real emotional connection with the customer but also the time spent on the call. In other words, Zappos customer service evaluations give greater credence to longer rather than shorter customer interactions.

The Happiness Experience Form grade the Zappos customer service experiences. This form assigns a value based on a 100-point scale in four key categories. These categories include the emotional connection, ongoing rapport, ability to address needs, and the “wow” experience provided. In pursuing this approach, the company has continued to advance its Net Promoter Score annually. And Zappos continues to track, and celebrate, those customer services calls that last the longest.

jeanne markel quoted
We often hear about people leaving good jobs because of faulty culture. Never happens in Zappos.

New Changes for Zappos Company Culture

One of the nuances of the Zappos company culture always relates to the empowerment of its employees. This was advanced significantly a few years back when Hsieh introduced his new workplace philosophy entitled “holacracy.” Holacracy referred to a manager-less system that abolished hierarchies. There is a huge encouragement to self organize and be more creative among workgroups, which led to greater adaptability.

While holacracy has definitely made the Zappos company culture more dynamic, it has room for further advancement. As a result, Hsieh has introduced a marketplace mentality in the Zappos company culture. In this system, any group can operate like a startup company managing its ideas, activities, and even budget. And these efforts can involve any activity whatsoever well beyond shoes and apparel. The purpose of this is to further encourage innovation and change while promoting employee empowerment. And it has tremendous potential impacts for the future of Zappos.

tony hsieh talks about company culture
Commit and be ready to hire and fire according to your core values. For Tony Hsieh, there’s no other way to build the culture you want for your company.

Change with a Customer-Centric Focus for the Future

In 2009, Amazon purchased Zappos for $1.2 billion. During the negotiations, Hsieh and Lin had concerns that Amazon would want to change the Zappos company culture. As a result, the company insisted on safeguards to prevent this from happening, with which Amazon agreed. As a result, the Zappos company culture has remained just as innovative, creative, and quirky as it has always been. And Zappos customer service continues to rank among the best.

For Hsieh, he wants to be as proactive as possible in preserving the Zappos company culture and its capacity for change. The ten core values of Zappos highlight this, as well as in his constant analysis of new company directions. Where will Zappos be in the future and what services will they offer? That is anyone’s guess given the persistent evolution the company has seen. But it remains clear that the Zappos company culture will continue to insist on novelty and change in the process. At its core, Zappos’ DNA  was built for change, and it will continue to stay true to its character.


For more on Zappos boss Tony Hsieh, check out this week’s Bold Leader Spotlight.