Zappos.com CEO Tony Hsieh: vision, values and the pursuit of happiness

Posted July 21, 2010 in Latest News & Insights

Tony Hsieh is the inspiring 30-something CEO of Zappos.com, an online retailer that was recently acquired by Amazon.com for just over 1.2 billion (yes billion) dollars.  This isn’t the first time Hsieh has sold a company.  At 24 he sold LinkExchange to Microsoft for $265 million, so it’s little wonder that a packed house of business leaders turned up to hear what he had to say.  The message was: building a successful business takes more than going through the motions of lip-service to the “soft stuff”.

Tony Hsieh attributes much of Zappos.com’s success to one key element: a passion for service.  So, probably 99.9% of companies say that their customer is #1, the difference with Zappos.com is they really walk the talk.  The company is guided by a set of 10 core values.  Here they are:

  1. Deliver Wow through service.
  2. Embrace and drive change.
  3. Create fun and a little weirdness.
  4. Be adventurous, creative and open-minded.
  5. Pursue growth and learning.
  6. Build open and honest relationships with communication.
  7. Build a positive team and family spirit.
  8. Do more with less.
  9. Be passionate and determined.
  10. Be humble.

So how does Zappos make sure the values aren’t just “word’s on the wall”?  They live and die by them.  Here’s a few of the things Tony shared:

  1. It’s starts with the interview process… 50% of the weight of your interview results relate to your fit with culture;
  2. Zappos.com is always watching… candidates are brought to the Zappos.com site via shuttle.  If you’re rude the shuttle driver… you’re done.
  3. You get paid to quit… part way through the 5 week training period you are offered $2,000 to quit (plus you’re paid for the time you’ve spent through the process)
  4. Values trump being a big shot… if you’re an arrogant high performer, you won’t get hired.  (Think of anytime you’ve ever heard the phrase “he may rub people the wrong way but he’s really going to deliver a lot for our team” and you’ll get the picture on how tough a call that is to make).
  5. Measure values as part of performance… 50% of a Zappos.com employees review is based on fit with culture and how they are helping advance/uphold the culture.
  6. Share the good, the bad and the ugly… Every year they create a Zappos.com culture book where their employees share their (unedited except for typos) thoughts about what it’s really like to work at Zappos. (Reinforcing one of their key values around transparency).

But more than putting his money where his mouth is about “living” the Zappos.com values, the component of Hsieh’s speech that inspired me the most was his message about helping people connect to a higher purpose.  Hsieh has done a lot of research on the science of happiness and has brought this science into his leadership philosophy.  One of the key elements that leads people to long-term happiness is vision and meaning (being part of something bigger than you).

From the outside, Zappos.com is a successful online retailer, but from the inside Zappos.com has created a mission that is about creating happiness.  Hsieh is completely convincing in expressing this vision.  By focusing his team on a higher purpose than profits, you move from “needing to motivate people to get things done” to “inspiring them to want to do things beyond expectations”.

In the early 90’s I heard fundraising guru Ken Wyman talk about why people volunteer their time for organizations.  He said “people want to be a worthwhile part of a worthwhile cause.”  At the time, it struck me that the same could be said for any employee.  You want to feel like you’re making a difference.  Not just making sure that the CEO or shareholders are able to upgrade their BMW’s next year.

Inspiring teams to find their higher purpose is the job of every leader.  But, here’s the big lesson I took away as I listened to Tony Hsieh…

the ability to inspire others to a higher purpose has to start with you

Tony Hsieh is an inspiring leader because he is incredibly clear on his own core purpose and been relentless at understanding and then pursuing his own passion.  From that foundation, he has been able to inspire others.  Embedding values at Zappos.com wasn’t just some strategy to try to drive profits or platitude to that fuzzy “people-stuff”.  It was an enabler to the bigger vision which he summed up with a phrase from the movie Notorious where Puff Daddy says to the Notorious BIG:

 “Don’t chase the paper, chase the dream.”

 So, what are you chasing?  Are you clear on your personal vision for your leadership and your own values?  If  not, we’re here to help.

 Happy leading!


Leave a Comment

Your email address will not be published. Required fields are marked *

9 Comments

  1. Al Diaz says:

    This is absolutely one of the best posts on leadership I have come across on any blog and will be saving it for future reference. Thank you. AD

  2. Atticus says:

    An awesome post, thanks for sharing!

    It seems Tony Hsieh has infused both the art of simplicity and passion in his business model.

    The most successful companies always have a clear and consistent mission statement and it definitely is the case with Zappos. Add transparency to that mix and all the stakeholders will be rejoicing together.

    A great success story!

    • LeaderTalker says:

      Thanks! Tony had a great message although I do think it’s probably easier to embed some of these things when you’re working a start-up. An audience member asked him what advice he had for people working in law firms or other more traditional workplaces and his response was “open up a competitor across the street.” Probably a lot of truth to that! Thanks for reading and commenting.

  3. How thrilling it is to know that there are still examples out there of wildly successful companies with heart!

  4. […] Zappos.com CEO Tony Hsieh: vision, values and the pursuit of happiness July 2010 6 comments and 1 Like on WordPress.com, 4 […]

  5. Tony’s comment about inspiring vs. motivating really resonates with me. Can you tell me the source of that quote? From his book? In a speech? An interview? Great post. Thanks.

    • LeaderTalker says:

      Hi Rodney… Thanks for dropping by and leaving a comment. Yes, this quote came from a talk Tony did at an event sponsored by the Globe an Mail here in Toronto last year. I love that quote too and believe it to be incredibly accurate. Glad you enjoyed the post.
      Glain