Niki and I have had the honour of spending three days in Las Vegas at Zappos HQ learning all about how Zappos created and maintain their culture and what the future holds. We got back yesterday and I am so excited to share my learnings, as the CEO, Tony Hsieh, says to; ‘spread the happiness’.
Whilst we learnt about the ins and outs of how the business is structured and operates there were some overall outstanding messages that have found their way under my skin. Keep in mind, my lens will be all about creating remarkable cultures. As this is Zappos’ number 1 priority – it just makes sense.
Some context around where Zappos are in their journey:
They are 2 ½ years into implementing ‘Holacracy’. This is a complete and utter transformation of how the business is structured and managed. With 1,600 employees it’s been the largest implementation of Holacracy worldwide. It removes ‘people managers’ and instead focuses them on managing the work. It assumes that people now ‘self manage’ and take responsibility for themselves. However, if there are people issues that are getting in the way of the work being done well, then the team leaders known as ‘lead links’ still address them.
It is way too hard to explain the detail, but the important message is that for Holacrary to continue to be a success (and it’s had its challenges) then people self managing is key.
I’ll share more thoughts and learnings over the next few months in my future posts. But for now, in no particular order, the under my skin takeaways are;
- Culture is everything. Zappos is known for its relentless and unapologetic commitment to their culture. Zappos believe that culture takes care of everything else.
They have 10 core values that are weaved into everything they do. They are not statements on a wall. They measure their success by meeting these values. They do something about it when they are not nailing them.
Their #1 Value – Deliver WOW Through Service is the foundation of who they are and how they do business. ‘Service’ applies to each other, their customers, their suppliers, their shareholders and the community. There are oodles of examples of how they commit to this.
Zappos spoke about all of these values, all throughout Culture Camp. Everyone we met spoke about them. People know them of by heart. People are proud of them. All areas of the business focus on them. There are no ‘special cases’.
The values were created by everyone. All employees had a say in them. They were not thrust on them. So, whilst the culture might morph over time, their values are their constant.
- Self management starts with understanding self. Unless people start understanding
more about who they are and the impact they have on those around them, they will not be able to take responsibility. This is value #5 – Pursuing Growth and Learning.
I love this concept. I am a complete fan. Zappos have confirmed my thinking. I’ve seen many businesses put the focus on the individual taking responsibility for their own success.
Yet so many are going about it all wrong.
Telling people they need to drive their career is not enough. People need to be taught, by the business, to understand themselves and what can accelerate their growth and what will hold them back.
Self management is a personal journey. If not supported by the business, it is unlikely to really fly. Self awareness is the start. Taking responsibility and actioning the change is the next.
- A mindset shift is key. The success of Holacrary and Zappos depends on people being prepared to make a significant and sometimes profound change of thinking. They soon learnt that the change in structure was not the block. It was people not being prepared to surrender to the change or not being prepared to shift the focus to self managing.
It became a battle of the mind. Those that chose to change and go into unknown territories and ‘give it a go’ are the successful ones.
- It starts with recruitment. We heard from most parts of the business and all of them told us; ‘the success of their team and culture starts with recruitment’. They have a ferocious and unapologetic commitment to hiring the right people, from the start. We asked;
- How do you maintain your values? ‘It starts with recruitment’.
- How do you ensure your leaders inspire others and lead by example? ‘It starts with recruitment’.
- How do you keep people motivated and energised? ‘It starts with recruitment’.
- How do you remove the ‘dead wood’? ‘It starts with recruitment’.
You getting the message? Get ruthless on making the best hire decisions. Tony Hsieh says; ‘Be slow to hire and quick to fire’. Culture fit trumps technical fit. Every… Single… Time…!
Another super cool thing, is that everyone, no matter what level, spends time on the phone with customers. For at least two weeks, at the start of your employment, even if your role has nothing to do with external customers. As well as having to help out during peak times, it’s all hands on deck.
No point working in the business if you don’t understand the business and what creates WOW! With about 5000 calls a day & over 1000 live chats, there’s no shortage of opportunities to learn.
- It’s all about relationships. Value #7 is ‘Build a Positive Team and Family Spirit’. This is done with complete determination. They budget time, into each role and project, to connect and have fun. Value #3 – Create Fun and a Little Weirdness, is part of their utilisation, not on top of it.
They know that when people feel more connected to each other, they are happier, they do better work and are more productive. The better the relationship the more profitable the business. If building relationships are not important to you, then Zappos would be not a good fit.
They even overstaff their call centre to be able to do this. As well as making sure their customer response rating remains high.
One of the ways they do this is through their incredible customer service. They consistently display the value of building a PEC – Personal. Emotional. Connection. With all their customers. So, with 80% of them coming back for more, it must be working.
- You can exit people with elegance. There is no point keeping people who don’t want to be there. If the right people are essential to maintaining the culture, then making sure they are engaged is key. Whilst all measures are taken to hire the right people, they might not be the right fit or things change. Zappos have many opportunities to have people leave the way they started. With elegance and grace. How?
- After 5 weeks of intense yet fun induction (New Hire Training), Zappos provide employees with ‘The Offer’. That is, a fully paid, no questions asked, one month of salary, should they decide Zappos it’s not the right fit for them.
- If an employee is working on a role or project that comes to an end OR the fit is not working (for whatever reason) they then go on a ‘Hero’s Journey’. This program is designed to help the employee find the next best role for them. In OR out of Zappos. Yep… whatever is best for the employee.
- Six months into Holacracy, Zappos soon realised that not everyone is on board with the new way of working so the CEO Tony sent all employees an email. The email offered to pay out anyone who did not feel comfortable with the new way forward. Again, no questions asked. 18% of the workforce took the offer.
Zappos want people to be honoured whether they are entering or exiting the business. Now that’s WOW!
- Be ok with not knowing. For Zappos, change is their constant. Always will be. Value #5 – Embrace and Drive Change.
They have made peace that there will always be work to do. Perfection is not a goal. Learning from the wins and losses is. Tony says it’s a learning game not a winning one.
Whilst change starts with tools and education. It often doesn’t finish. And to make it more palatable and playful they pilot new things with small pockets of the business. Learn from what works and what doesn’t and be transparent about all of it. Yep. All of it.
- Communication is essential and is often the weakest link. Value #6 – Build Open and Honest Relationships With Communication. Well of course this one makes me very happy. Make personal, emotional, connections essential. With each other, customers, suppliers, shareholders and the community. Before Holacracy this was super important. Post Holacracy this is even more so. They know that unless people talk, really talk about the things that matter then it will limit their success.
They are believers that vulnerability builds courage and resilience. Both personally and professionally. They offer programs for people to understand what this means and how they can get there. Again, a personal journey but essential to build relationships and make better decisions.
Whilst they believe we can be having honest conversations on a daily basis there is also suggested opportunities for communication. For example, 1 on 1’s done within teams, team meetings with set agendas. These conversation opportunities are designed by each team based on what suits them. Plus, there are no compulsory performance reviews. No surprise there though.
- Focus on reducing conflict and tension. When personal or professional issues are not dealt with quickly, these spot fires soon become fully blown bushfires. Zappos have a team specifically committed to helping individuals work through issues.
Their experts teach and support people how to deal with personal and professional tensions. In a self managed environment, being prepared to take accountability and responsibility for your part in any tension is very important. Value #10 Be Humble.
- Be transparent… really. The good, the bad and the ugly. People are less likely to jump to conclusions the more information they have about a situation that could possibly make them nervous, or scared. So they share the ‘why and ‘what’ is happening all along the way.
Interestingly, Tony has found that Town Hall sessions, where you get the whole of the business together to discuss the detail of major initiatives, don’t work. When the change is big and has a significant impact on individuals then sharing the message and detail should be a tiered approach. People are at all different stages of understanding and if they are not ready to hear, they are likely to make up stories that don’t serve them.
This was a powerful lesson whilst rolling out Holocracy. People need more team and individual support to embrace and drive change.
In saying that, once a quarter they hold an ‘All Hands’ meeting for all employees. We had the privilege of attending the September one and it was fun, energising and transparent. Tony was honest about what’s worked and what they are still learning.
Whilst there was so much more than this, these are the ones that stood out for me.
What impresses me is that they are not just keen to share all their ‘secrets’ to success. They encourage it. After all, imagine what the world would be like if we all really committed to these healthy values?
Georgia Murch is an expert in creating team and organisational feedback cultures. For more information go to www.georgiamurch.com.
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