netrashetty
Netra Shetty
Zappos.com is an online shoe and apparel shop currently based in Henderson, Nevada.[3]
In July 2009, the company announced it would be acquired by Amazon.com in an all-stock deal worth about $1.2 billion.[4][5][6] Since its founding in 1999, Zappos has grown to be the largest online shoe store.[7]
In 2001, Zappos more than quadrupled their yearly sales, bringing in $8.6 million.[8] In 2002, they opened their own fulfillment center in Kentucky.[8] Advertising costs were minimal, and the company grew mostly by word of mouth.[9] It was around this time that Hsieh and Zappos executives set long-term goals for 2010: achieve $1 billion in sales and receive inclusion on Fortune’s list of The Best Companies to Work For.[10]
. What are some of the most important leadership lessons you’ve learned?
A. After college, a roommate and I started a company called LinkExchange in 1996, and it grew to about 100 or so people, and then we ended up selling the company to Microsoft in 1998. From the outside, it looked like it was a great acquisition, $265 million, but most people don’t know the real reason why we ended up selling the company.
It was because the company culture just went completely downhill. When it was starting out, when it was just 5 or 10 of us, it was like your typical dot-com. We were all really excited, working around the clock, sleeping under our desks, had no idea what day of the week it was. But we didn’t know any better and didn’t pay attention to company culture.
By the time we got to 100 people, even though we hired people with the right skill sets and experiences, I just dreaded getting out of bed in the morning and was hitting that snooze button over and over again.
Q. Why?
A. I just didn’t look forward to going to the office. The passion and excitement were no longer there. That’s kind of a weird feeling for me because this was a company I co-founded, and if I was feeling that way, how must the other employees feel? That’s actually why we ended up selling the company.
Financially, it meant I didn’t have to work again if I didn’t want to. So that was the lens through which I was looking at things. It’s basically asking the question, what would you want to do if you won the lottery? For me, I didn’t want to be part of a company where I dreaded going into the office.
So when I joined Zappos about a year later, I wanted to make sure that I didn’t make the same mistake that I had made at LinkExchange, in terms of the company culture going downhill. So for us, at Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.
Q. So how do you do that?
A. About five years ago, we formalized the definition of our culture into 10 core values. We wanted to come up with committable core values, meaning that we would actually be willing to hire and fire people based on those values, regardless of their individual job performance. Given that criteria, it’s actually pretty tough to come up with core values.
Q. Tell me what happened.
A. We spent a year doing that. I basically sent an e-mail out to the entire company, asking them what our values should be, and got a whole bunch of different responses. The initial list was actually 37 long, and then we ended up condensing and combining them and went back and forth and came up with our list of 10.
Today, we actually do two separate sets of interviews. The hiring manager and his or her team will interview for the standard fit within the team, relevant experience, technical ability and so on. But then our H.R. department does a separate set of interviews purely for culture fit. They actually have questions for each and every one of the core values.
Q. Can you give me an example of the value and the question?
A. Well, some of them are behavioral questions. One of our values is, “Create fun and a little weirdness.” So one of our interview questions is, literally, on a scale of 1 to 10, how weird are you? If you’re a 1, you’re probably a little bit too strait-laced for us. If you’re a 10, you might be too psychotic for us.
It’s not so much the number; it’s more seeing how candidates react to a question. Because our whole belief is that everyone is a little weird somehow, so it’s really more just a fun way of saying that we really recognize and celebrate each person’s individuality, and we want their true personalities to shine in the workplace environment, whether it’s with co-workers or when talking with customers.
I think of myself less as a leader, and more of being almost an architect of an environment that enables employees to come up with their own ideas, and where employees can grow the culture and evolve it over time, so it’s not me having a vision of “This is our culture.”
Maybe an analogy is, if you think of the employees and culture as plants growing, I’m not trying to be the biggest plant for them to aspire to. I’m more trying to architect the greenhouse where they can all flourish and grow.
Q. Did the process of developing those core values go smoothly?
A. Honestly, there was a lot of resistance to the core values rolling out, including from me. I was very hesitant, because it just felt like one of those big-company things to do. But within a couple of months, it just made such a huge difference. It gave everyone a common language, and just created a lot more alignment in terms of how everyone in the company was thinking. If I could do it all over again, I would roll out our core values from Day 1.
Q. What other things did you do at Zappos to sort of reinforce and build the culture?
1 2 NEXT PAGE >
Adam Bryant conducted and condensed this interview. A longer version is at nytimes.com /business.
Article
Zappos.com: A Lesson in Leadership
0
Written by Adam Burns Editor In Chief
Posted 27 May 2010
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If you ever wanted a lesson on good leadership, you’d be hard pushed to find one better than the awesome display of ingenuity displayed by Tony Hsieh, CEO Zappos.com, last week.
News transpired that internet retailer 6pm.com had, mistakenly priced almost all of its products at $49.99. The error was pretty unforgiving, given that some products on the site normally sell for well over $1,000.
The site, owned by parent company Zappos Development, was quickly and efficiently shut down until the pricing problem was fixed. But, according to Aaron Magness, Director of Brand Marketing and Business Development for Zappos, while the error was probably a great deal for customers, the inadvertent slip-up turned out to be a pricey affair for the company – costing them more than $1.6 million.
So where does Mr. Hsieh come in? Well, thanks to some quick thinking blogging from both Magness and Hsieh, the potentially disastrous minefield of consumer rights and legal issues was altogether averted, after Hsieh held up the company’s hands to the mistake, accepted full responsibility for the error and confirmed that – despite the resulting loss – all orders placed at $49.99 would be fulfilled.
Of course, Zappos.com – and Hsieh himself – has a long history of putting the customer first. No matter what the cost.
According to Fortune’s 100 Best Companies to Work For, for instance, Zappos.com is currently placed as #23, outranking the likes of Starbucks, Microsoft, DreamWorks and Mattel.
The newcomer to the list offers employees free lunches, concierge services and 100% coverage of health insurance premiums. Even better, perhaps, is the fact that even after Tony Hsieh cut eight percent of the staff, he received several glowing letters from departing staff, praising the retailer to the high heavens.“Level 5 Leaders are a study in duality: modest and willful, humble and fearless,” Collins explains. They don’t allow their egos to interfere with their primary focus on the larger goal of building a great company. Collins clarifies that Level 5 leaders are usually highly ambitious, but their ambition is directed for the good of the institution, not themselves.
At Zappos, you won’t find any sacrosanct corner offices reserved for the higher ups. Zappos executives are fondly referred to as “Monkeys” and sit in what is aptly named “Monkey Row.” Here, CEO Tony Hsieh sits in an open cubicle among other executives, and encourages his employees to throw peanut shells on the floor of his workspace. Hsieh sends a subtle yet clear message that he’s not more important than anyone else in the company.
Collins further explains, “The good-to-great leaders never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extraordinary results.” Aligned with this core principle, Hsieh openly advertises his email address and encourages people to drop him a message. You might be skeptical, thinking that your message would go unanswered, lost in a flood of emails. Hsieh, however, means what he says and stands by his word.
How can a CEO of a billion dollar company be so responsive? According to Collins, it’s because Level 5 leaders have a “ferocious resolve” to do whatever it takes to make the company great. And by his very nature, Hsieh embodies the perfect balance between personal humility and professional will, leading Zappos’s transformation into the great company it is today.
In July 2009, the company announced it would be acquired by Amazon.com in an all-stock deal worth about $1.2 billion.[4][5][6] Since its founding in 1999, Zappos has grown to be the largest online shoe store.[7]
In 2001, Zappos more than quadrupled their yearly sales, bringing in $8.6 million.[8] In 2002, they opened their own fulfillment center in Kentucky.[8] Advertising costs were minimal, and the company grew mostly by word of mouth.[9] It was around this time that Hsieh and Zappos executives set long-term goals for 2010: achieve $1 billion in sales and receive inclusion on Fortune’s list of The Best Companies to Work For.[10]
. What are some of the most important leadership lessons you’ve learned?
A. After college, a roommate and I started a company called LinkExchange in 1996, and it grew to about 100 or so people, and then we ended up selling the company to Microsoft in 1998. From the outside, it looked like it was a great acquisition, $265 million, but most people don’t know the real reason why we ended up selling the company.
It was because the company culture just went completely downhill. When it was starting out, when it was just 5 or 10 of us, it was like your typical dot-com. We were all really excited, working around the clock, sleeping under our desks, had no idea what day of the week it was. But we didn’t know any better and didn’t pay attention to company culture.
By the time we got to 100 people, even though we hired people with the right skill sets and experiences, I just dreaded getting out of bed in the morning and was hitting that snooze button over and over again.
Q. Why?
A. I just didn’t look forward to going to the office. The passion and excitement were no longer there. That’s kind of a weird feeling for me because this was a company I co-founded, and if I was feeling that way, how must the other employees feel? That’s actually why we ended up selling the company.
Financially, it meant I didn’t have to work again if I didn’t want to. So that was the lens through which I was looking at things. It’s basically asking the question, what would you want to do if you won the lottery? For me, I didn’t want to be part of a company where I dreaded going into the office.
So when I joined Zappos about a year later, I wanted to make sure that I didn’t make the same mistake that I had made at LinkExchange, in terms of the company culture going downhill. So for us, at Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.
Q. So how do you do that?
A. About five years ago, we formalized the definition of our culture into 10 core values. We wanted to come up with committable core values, meaning that we would actually be willing to hire and fire people based on those values, regardless of their individual job performance. Given that criteria, it’s actually pretty tough to come up with core values.
Q. Tell me what happened.
A. We spent a year doing that. I basically sent an e-mail out to the entire company, asking them what our values should be, and got a whole bunch of different responses. The initial list was actually 37 long, and then we ended up condensing and combining them and went back and forth and came up with our list of 10.
Today, we actually do two separate sets of interviews. The hiring manager and his or her team will interview for the standard fit within the team, relevant experience, technical ability and so on. But then our H.R. department does a separate set of interviews purely for culture fit. They actually have questions for each and every one of the core values.
Q. Can you give me an example of the value and the question?
A. Well, some of them are behavioral questions. One of our values is, “Create fun and a little weirdness.” So one of our interview questions is, literally, on a scale of 1 to 10, how weird are you? If you’re a 1, you’re probably a little bit too strait-laced for us. If you’re a 10, you might be too psychotic for us.
It’s not so much the number; it’s more seeing how candidates react to a question. Because our whole belief is that everyone is a little weird somehow, so it’s really more just a fun way of saying that we really recognize and celebrate each person’s individuality, and we want their true personalities to shine in the workplace environment, whether it’s with co-workers or when talking with customers.
I think of myself less as a leader, and more of being almost an architect of an environment that enables employees to come up with their own ideas, and where employees can grow the culture and evolve it over time, so it’s not me having a vision of “This is our culture.”
Maybe an analogy is, if you think of the employees and culture as plants growing, I’m not trying to be the biggest plant for them to aspire to. I’m more trying to architect the greenhouse where they can all flourish and grow.
Q. Did the process of developing those core values go smoothly?
A. Honestly, there was a lot of resistance to the core values rolling out, including from me. I was very hesitant, because it just felt like one of those big-company things to do. But within a couple of months, it just made such a huge difference. It gave everyone a common language, and just created a lot more alignment in terms of how everyone in the company was thinking. If I could do it all over again, I would roll out our core values from Day 1.
Q. What other things did you do at Zappos to sort of reinforce and build the culture?
1 2 NEXT PAGE >
Adam Bryant conducted and condensed this interview. A longer version is at nytimes.com /business.
Article
Zappos.com: A Lesson in Leadership
0
Written by Adam Burns Editor In Chief
Posted 27 May 2010
0
digg
Share
If you ever wanted a lesson on good leadership, you’d be hard pushed to find one better than the awesome display of ingenuity displayed by Tony Hsieh, CEO Zappos.com, last week.
News transpired that internet retailer 6pm.com had, mistakenly priced almost all of its products at $49.99. The error was pretty unforgiving, given that some products on the site normally sell for well over $1,000.
The site, owned by parent company Zappos Development, was quickly and efficiently shut down until the pricing problem was fixed. But, according to Aaron Magness, Director of Brand Marketing and Business Development for Zappos, while the error was probably a great deal for customers, the inadvertent slip-up turned out to be a pricey affair for the company – costing them more than $1.6 million.
So where does Mr. Hsieh come in? Well, thanks to some quick thinking blogging from both Magness and Hsieh, the potentially disastrous minefield of consumer rights and legal issues was altogether averted, after Hsieh held up the company’s hands to the mistake, accepted full responsibility for the error and confirmed that – despite the resulting loss – all orders placed at $49.99 would be fulfilled.
Of course, Zappos.com – and Hsieh himself – has a long history of putting the customer first. No matter what the cost.
According to Fortune’s 100 Best Companies to Work For, for instance, Zappos.com is currently placed as #23, outranking the likes of Starbucks, Microsoft, DreamWorks and Mattel.
The newcomer to the list offers employees free lunches, concierge services and 100% coverage of health insurance premiums. Even better, perhaps, is the fact that even after Tony Hsieh cut eight percent of the staff, he received several glowing letters from departing staff, praising the retailer to the high heavens.“Level 5 Leaders are a study in duality: modest and willful, humble and fearless,” Collins explains. They don’t allow their egos to interfere with their primary focus on the larger goal of building a great company. Collins clarifies that Level 5 leaders are usually highly ambitious, but their ambition is directed for the good of the institution, not themselves.
At Zappos, you won’t find any sacrosanct corner offices reserved for the higher ups. Zappos executives are fondly referred to as “Monkeys” and sit in what is aptly named “Monkey Row.” Here, CEO Tony Hsieh sits in an open cubicle among other executives, and encourages his employees to throw peanut shells on the floor of his workspace. Hsieh sends a subtle yet clear message that he’s not more important than anyone else in the company.
Collins further explains, “The good-to-great leaders never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extraordinary results.” Aligned with this core principle, Hsieh openly advertises his email address and encourages people to drop him a message. You might be skeptical, thinking that your message would go unanswered, lost in a flood of emails. Hsieh, however, means what he says and stands by his word.
How can a CEO of a billion dollar company be so responsive? According to Collins, it’s because Level 5 leaders have a “ferocious resolve” to do whatever it takes to make the company great. And by his very nature, Hsieh embodies the perfect balance between personal humility and professional will, leading Zappos’s transformation into the great company it is today.
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