Zappos’ Tony Hseih’s Delivering Happiness

I received an advance copy of Tony Hsieh’s Delivering Happiness: A path to Profits, Passion, and Purpose book (Amazon) through the advance copy giveaway program for bloggers.

The Book

The book offers Zappos’ philosophies & vision and shares highlights of Tony Hseih’s path toward discovering how to find happiness in business and in life.

After much consideration on how best to introduce what Delivering Happiness is really all about, I decided to share my journey though the book using passages from the book itself.

Competitive Advantage

Looking back, a big reason we hit our goal early was that we decided to invest our time, money, and resources into three key areas: customer service (which would build our brand and drive word of mouth), culture (which would lead to the formation of our core values), and employee training and development (which would eventually lead to the creation of our Pipeline Team).

Even today, our belief is that our Brand, our Culture, and our Pipeline (which we internally refer to as “BCP”) are the only competitive advantages that we will have in the long run.

Everything else can and will eventually be copied.

Competency, capability, capacity, efficiency, effectiveness, etc. are emergent properties of culture, the source of competitive advantage!

Brand, Culture, and Core Values

Over time, as we focused more and more on our culture, we ultimately came to the realization that a company’s culture and a company’s brand are really just two sides of the same coin. The brand is just a lagging indicator of a company’s culture.

Brand, which is ultimately external identity, lags culture, which is fundamentally internal identity!

The fundamental problem is that you can’t possibly anticipate every possible touch point that could influence the perception of your company’s brand.

Our believe is that if you get the culture right, most of the other stuff — like great customer service, or building a great long-term brand, or passionate employees and customers — will happen naturally on its own.

Culture is “the source”!

We’ve formally defined the Zappos culture in terms of 10 core values.

It’s really important to come up with core values that you can commit to. And by commit, we mean that you’re willing to hire and fire based on them.

Without commitment, what’s the value of culture / core values!

At the end of the day, just remember that if you get the culture right, most of the other stuff — including building a great brand — will fall into place on its own.

It was necessary to come up with core values — essentially, a formalized definition of our culture — in order for us to continue to scale and grow.

Core values (formalized definition of culture) are essential for scale and growth!

Our philosophy at Zappos is that we’re willing to make short-term sacrifices (including lost revenue or profits) if we believe that the long-term benefits are worth it. Protecting the company culture and sticking to core values is a long-term benefit.

Don’t confuse short-term benefits for long-term sacrifices!

The Culture Book

The original idea was simple. We would ask employees to write in a few paragraphs, the answer to the question: What does Zappos culture mean to you? Except for correcting typos, we would leave it unedited and publish everything in a book.

Approach culture informally …

In an age of transparency, when Twitter can contribute to a company’s success or its downfall, is there anything more compelling than exposing your company’s DNA to the world.

If you’ve thought about it too, here are a few things worth considering:

  1. The Culture Book is not about the book … it’s about the culture. … Without a separation of work and life, it’s remarkable how values can be exactly the same.
  2. It’s a short-term expense, long-term investment. … Once you have a culture — invest in it.
  3. Make it available to everyone.
  4. Give your evangelists a voice.
  5. A word is a word, and a picture is worth a thousand … but a brand is worth a million. … By sharing a common belief system, Zappos employees become the unified brand to the world.
  6. Not all cultures are the same.
  7. Evolve.

The Core Values Document

As we grow as a company, it has become more and more important to explicitly define the Zappos core values from which we develop our culture, our brand, and our business strategies.

… and approach core values more formally in proportion with growth!

While there are many subcomponents to each value, we’ve distilled the most important themes into the following 10 core values.

  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

We want all 10 core values to be reflected in everything we do, including how we interact with each other, how we interact with our customers, and how we interact with our vendors and business partners.

Reflect core values in all interactions!

As we grow, our processes and strategies may change, but we want our values to always remain the same. Our core values should always be the framework from which we make all of our decisions.

Reflect core values in all decisions!

Each of the core values becomes a natural part of employees’ everyday language and way of thinking. Committable core values that are truly integrated into a company’s operations can align an entire organization and serve as a guide for employees to make their own decisions.

Committable core values (not merely core values) can become a guide and compass for making decisions, and are a guide and compass when truly operationalized!

Core values are essentially a formalized definition of a company’s culture.

It doesn’t actually matter what your company’s core values are. What matters is that you have them and that you commit to them. What’s important is the alignment that you get from them when they become the default way of thinking for the entire organization.

Core values integrate and align, and are reflected in language and thought!

Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand.

Core values are the essence of identity, internal and external!

For individuals, character is destiny. For organizations, culture is destiny.

Individual character and collective culture determine destiny!

Rather than focusing on individuals as assets, we instead focus on building as our asset a pipeline of people in every single department with varying levels of skills and experience, ranging from entry level all the way up through senior management and leadership positions. Our vision is for almost all of our hires to be entry level, but for the company to provide all the training and mentorship necessary so that any employee has the opportunity to become a senior leader within the company within five to seven years. For us, this is still a work in progress, but we’re really excited about its future.

Not merely talent, but an incubator of talent, is key!

Happiness

“What is your goal in life?”

If you keep asking yourself “Why?” enough times, you’ll find yourself arriving at the same answer that most people do when they repeatedly ask themselves why they are doing what they are doing: They believe that whatever they are pursuing in life will ultimately make them happier.

The Pleasure Principal!

In 2009, we expanded our vision and purpose to a simple statement: Zappos is about delivering happiness to the world. … the evolution of the Zappos brand promise over the years: Customer Service (2003), Culture and Core Values as Our Platform (2005), Personal Emotional Connection (2007), and Delivering Happiness (2009).

From Service to Culture / Core Values Platform to Connection to Happiness!

From my perspective, it seemed to make sense to try to learn more about the science of happiness so that the knowledge could be applied to running our business.

Happiness is really just about four things: perceived control, perceived progress, connectedness (number and depth of your relationship), and vision/meaning (being part of something bigger than yourself).

Control, Progress, Connectedness, and Vision are the essence of Happiness!

Three Types of Happiness: Pleasure (chasing the next high), Passion (flow, where peak performance meets peak engagement, and time flies by), and Higher Purpose (being part of something bigger than yourself that has meaning to you).

Happiness through Pleasure, Passion, and Purpose!

I think the parallels between what the research has found makes people happy (pleasure, passion, purpose) and what the research has found makes for great long-term companies (profits, passion, purpose) makes for one of the most interesting fractals I’ve ever come across.

While People seek Pleasure and Companies seek Profit, they both seek Passion and Purpose!

Setting out to create a great long-term company may seem to be an overwhelmingly daunting task at first, but using happiness as an organizing principle can help guide you along the way.

While Happiness is a viable organizing principle, …

When you walk with purpose, you collide with destiny. (Bertice Berry)

… Purpose ultimately orients us toward our destiny!

In Conclusion

As a guiding principle in life for anything I do, I try to ask myself, What would happen if everyone in the world acted in the same way? What would the world look life? What would the net effect be on the overall happiness in the world?

No matter what your past has been, you have a spotless future. (Author Unknown)

Thousands of candles can be lit from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared. (Buddha)

If you want to understand the “Zappos Experience” — how Zappos has achieved greatness — read and reflect on Delivering Happiness.

Additionally, Delivering Happiness readily references the influences of two other books — Good to Great and Tribal Leadership.

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