Zappos Analysis Essay
In 1999, Nick Swinmurn developed the idea of Zappos when he was flooded with frustration from not being able to find a shoe that matched his needs. When he felt that he found the right style, he wouldn’t discover the correct size or color. An abundant of issues arose with every story he went to. That is when he decided to create a better avenue for future customers. According to the “In the beginning” blurb, online retail transactions were expected to reach nearly 30% in the near future. Swinmurn decided to create that company that would provide for that market. Nine years after beginning his dream Zappos witnessed sales in excess of $1 billion. His vision had translated into reality. A big part of Zappos.com success has been attributed to not only providing the best service, supply, and shopping experience by straying away from a brick and mortar set up, but by employing a culture that has fueled continual innovation and high quality. Some of the prongs that Zappos relies upon include: deliver “wow” though service, foster a fun environment, pursue growth, collect a passionate group of employees, and grow a fun environment. All in all there are ten cores that are highly encouraged among the employees. Undoubtedly the online retailing market has increased in competition, but what sets Zappos apart and allows it to be one of the industry leaders is its culture.
The uniqueness of this culture is widespread and evident both at a formal and more informal setting. Moreover the culture is driven by the top management such as the CEO of Zappos.com, Tony Hsieh. By dictating and employing skills such as taking risks and enjoying the work that he does, Mr. Hsieh set a precedent for his employees to follow. The Foundation for this Culture: The basis for the company was conveyed when Tony Hsieh emphasized his philosophy for Zappos: “Great things will happen if you make employees happy”. However happiness wasn’t clear cut for Hsieh as soon as he took on his position. In the interview with him, it is repeatedly mentioned how Hsieh conducted what he considered social experiments to clarify the most suitable culture. For example, the video opened with employees throwing a field day, dressing up in various costumes, and simply having a casual time. He then noted whether such an environment improved or detracted from productivity. Similar “experiments” led Hsieh to significantly believe that fostering an environment based on happiness coupled with innovation and self-development would be one of the key factors in making the organization successful.
Hsieh also did not internalize his vision but effectively publicized his thoughts to his workforce by stressing the ten core values. This clear communication made everyone very cognizant of the fact that culture had the ability to hinder or promote the Zappos success. However, that isn’t to say that Hsieh promoted these ten tenants explicitly, word for word. Instead, employees were encouraged to find their own meaning behind everything and apply their vision to their work. What this did was create align the position between upper and lower management. Employees had a basic idea of what was expected but could simultaneously experience some freedom and individuality. As touched upon earlier, Hsieh himself was a figurehead of what he desired. Whereas many CEO’s use their position to enforce their power and authority, Hsieh took a completely different approach. He leveled the positions within the company and distressed the developed hierarchy by adopting a cubicle alongside his peers and having a modest salary of a little under $40,000. Furthermore, hiring employees that matched the Zappos fit instead of trying to mold them into this person contributed to the ease of fostering a very unified culture.
Hsieh stressed that companies should look more to the personality match over the skill set because those that fit well within the company would have a greater chance of success than someone who had a top tier skill set but a poor personality match. The rationale behind this was that someone can always learn the necessary material, but changing someone’s way of life or character is a much more formidable task. Thus, by hiring people with basic similarities, it became easier for Zappos to formulate a more unified culture. Translating the Culture into the Customer Service In some ways it can be said that Zappos suggested that happier employees is equivalent to happier customers. It is undeniable that Hsieh set the groundwork for the former by providing things like substantial medical benefits, a peer group, work life balance, and a suitable mentor that employee happiness was not far off. This positive attitude shined through when employees would take a personal stake in wanting to do good for the company and exceeding the customers’ expectations. Hsieh also emphasized “out of the box” thinking and an expectation for mistakes to follow. However, by pushing the envelope for employees and urging them let their weirdness out to develop alternative thinking, Zappos has continually managed to stay ahead of the curve by putting forth the latest and the greatest.
While this translates into promising sales, it also translates into teamwork over individual work. Employees migrate towards collaboration, pushing one another, and developing friendships that exist outside of the workplace. Together these qualities circle back to the very first tenant mentioned: “Deliver WOW through service”. This was set upon the idea of generating strong relationships, emotional ties, and embracing a diversity of thoughts. By employing each of these qualities on a day to day basis, Zappos has been able to achieve the success it has witnessed. The Long Term: The financials, employee count, and general information shows that Zappos has been experiencing high growth, and there is no indication that this will change. More markets will open up, more customers will migrate to online shopping, more supply coordination will occur, and complications will arise. Perhaps the hardest part in managing that growth will be avoiding the integration of a stern structure and loss of employee freedom. Informality is currently what drives the “fun” and individuality of Zappos, and distancing the culture from that could be detrimental. For the past nine years, Zappos has been able to sustain an exponential growth while not compromising on a formalization of policies.
Management needs to be the leaders of the core values and ensure that employees remember why they love the company in the first place. Although Zappos has taken on a functional structure, this ensured a baselines awareness of responsibilities and shouldn’t be relaxed. This is particularly so because within each division such as Finance or IT, there still exists a unique culture that makes it personable. At some point Zappos will probably have to redefine its functional structure to incorporate the growth, but by stressing the culture which motivates the employees, such changes will have no reason to affect the company’s success. Tony Hsieh was a phenomenal leader that truly made work for his employees something to look forward to in the mornings. This not only benefited them, but resulted in better customer experiences, and financial success. Tony Hsiehs’ pledge of a strong company culture was undoubtedly met.