If you’re reading this blog post, you’re either a participant in the world of social media, or you’re my mom. (Hi, Mom!) If you’re a participant in the world of social media, you’ve heard of Zappos. Because Zappos has been the poster child for the effective use of social media to drive sales through customer satisfaction for the last 3 or 4 years, they’re mentioned in every presentation on social media I’ve ever seen. Heck, even I referenced them 
in a talk I gave to the Human Resource Policy Institute at Boston University last year. It seems as if Zappos is everywhere in social media and more and more in traditional media – and I hear that HR professionals are starting to tire of hearing about Zappos’ success with all things social media, its engaging culture, the free tours of its headquarters (which they do 4 times a day!), and their 10 core values.
It does seems as if Zappos and its CEO, Tony Hseih, are everywhere in the traditional print and social media scenes these days. (Check out the current Harvard Business Review article, “How I did it…Zappos’s CEO on Going to Extremes for Customers.”) And the topic is always the same: Tony’s conviction that culture drives organizational success. Period.
Since I moved back to Vegas last month, I took the opportunity to go on the Zappos tour, meet some of their leaders, and do a little poking around. I can understand HR folks being skeptical after all the coverage. Usually when something seems too good to be true, it is. But before you throw them overboard, ask questions. Go visit. Test them. Don’t decide not to talk about them because you think they’re overexposed. Because here’s the thing: what they’re doing is working. The hype matches the reality.
The leadership of the company is singularly focused on creating a culture based on 10 core values and it’s clear when you visit that the employees know them and live them. Check out this video. And you can see and hear CEO TonyHsieh talk about the culture here.
And the results and stats are impressive. Their turnover is low, their customer satisfaction (which they track daily through net promoter scores) is enviable, it’s harder to get a job there than it is to get in to Harvard, and they’ve successfully weathered being acquired by Amazon. Here’s a memo the CEO sent to his colleagues last week at the one year anniversay of that acquisition. (Note that he tweeted the public availability of this memo after posting it internally.)
You’ve seen all this before. But here’s where the rubber meets the road. Not only is the culture the foundation for their success, they’ve created a new company, Zappos Insights, to share their learnings, provide support, and create a community of culture focused leaders. In other words, they’ve turned their successful culture into a profit center.
I attended a Zappos Insights Gold one-day event last month. There were 13 of us in the group: three leaders of a small tech firm that had just been purchased by a major telcom company; two leaders from a hip shoe 
business in New York City; a team of seven (including the Director) from the customer service division of a major cruise line; and me. It was an illuminating day to say the least. We got to talk to HR and recruiting folks, the pipeline (training) leader, managers from the Customer Loyalty Team (call center), with lots of time for interaction and Q&A. We started, of course, with the tour of the headquarters and got to see the Zapponians at work in their natural habitat.
I’ll be honest. I was skeptical. But I have to tell you the culture was palpable. There was a positive energy in the place that I haven’t felt for some time. With a 36 year old CEO and over 400 people in the call center, it wasn’t surprising that the average age felt like it was well under 30. But to be fair, it felt good. Really good.
I had read Tony Hsieh’s new book, Delivering Happiness, before the event, so I was current on the Zappos history (which is so important that there’s a course on it in the pipeline (training) curriculum). And I attended as a participant, but also as an observer of this phenomenon. Gang, they’re doing great stuff. The participants of that one day event came away with concrete information – right from the source – about how to select employees and treat customers to create a culture of success. Adding membership to the experience keeps you in touch with others who are trying to achieve the same results and gives you a constant influx of interviews, how to’s, and other useful, practical information from the Zappos leadership team.
So I don’t know about you, but I think there’s something to this. Creating a culture that’s so strong it draws tourists and can be turned in to a profit center seems like a good thing to me. What do you think?
chinagorman.com 
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Attempting to add Ben to subscription list…
Well, that didn’t work. Must rethink this.
Loved this post China! It’s good to know that cultural Nirvana exists and kudos to the CEO for leading the way.
I think they are a perfect example of what you mentioned in a prior post – there are no “old guard” leaders pre-disposed to what a traditional corporate culture should look like. Now the trick is helping other companies value and implement the strategies that make Zappos so great.
Hi China,
Great article! Thank you for being a part of the Zappos Family!
Robert
http://www.ZapposInsights.com
Thanks, Robert. Hope to meet more of the team soon!
The goal of any organization is to potentially make profit centers to sustain the organization as well as create value to the customers visiting those centers.
I think it would be extremely interesting to see how long Zappos maintains the ‘Culture Hype’ around their company and brand. Kind of like Good to Great, Drive or anything that people crowd around that seems shiny and new.
Everything loses it’s luster, will be interesting to see!
http://ReThinkHR.org
oh and still trying to add you as an rss
Great post. While Zappos has been hailed as a social media darling I think of them more as a posterchild for how to prosper and grow no matter the economic environment around you. I believe the saying is “create your own weather.” It all starts at the top with Tony empowering his employees at all levels which fosters high engagement and job satisfaction. While naysayers may say this all seems “fluffy” and “utopian” they are ignoring the obvious, it works. Thanks for sharing your insights!
I think you’re right, Michael. I think the social media tag is a reg herring. What they are is an organization whose CEO has led them to create a unique culture that is focused simultaneously on engaging their workforce and their customers. We’ve known for years the inextricable link between employee satisfaction and customer satisfaction. This just lays out the veracity of that link for all to see. Thanks for your comments.
china, great read. i didn’t know anything about their insights organization. but it makes complete sense. i understand where lance is coming from, and i could see why it wouldn’t matter. we’re all trying to figure out how to make a work environment that “works” for all: leaders, employees, shareholders, and community. zappos seems to have tapped into that in a big way. you can read about how they’re approaching wellness through the same lens on my blog tomorrow.
thanks for making sure i didn’t miss this post.
f
Thanks, Fran. I’ll look for your post tomorrow. We can compare notes!
And I loved your post this morning about Zappos and their approach to wellness. You can read it here:
http://www.freerangecomm.com/2010/07/how-does-zappos-approach-employee-wellness-free-ranging-conversation-with-hollie-delaney-zappos-senior-hr-manager/
I’ll also mention Disney as an organization that does exactly what you mention.
With my wife working in a winery, she is often the one giving tours of the facility. People seem fascinated by it.
I wonder if it is easier to brand your organization when you’re a fun, consumer brand? Is there a culture solution for folks in the B2B space or in the less fun B2C space?
Both Disney and Ritz Carlton have done similar things. And your question is one I’ve been tussling with. The folks at Zappos Insights say it doesn’t matter. They have all kinds of businesses attending their one- and two-day sessions. And not all of them are consumer businesses.
Tony’s conviction, culture drives organizational success says it all. Engaged employees are the best ambassadors; creative, accountable and naturally always thinking of ways to improve a customer’s experience. To me it is such a simple formula. Doing the right thing may take more time, especially if you are trying to change a culture. Of course it must start at the top….oh, that ROI…priceless. More CEO’s would be willing to listen if HR learned how to present the financially crippling tangible and intangible costs of disengagement.
I, too am a loyal Zappo’s customer and will be on their doorstep in Vegas next year at SHRM national. I’m certain that I won’t be alone!
Lori: you’ve got it exactly right. I probably should have disclosed that I, too, am a loyal Zappos customer!
I think that the 2011 Annual Conference should include a speaker from Zappos and a tour…
Great suggestion! You should share your suggestion with Letty Kluttz at SHRM!
I love Zappos. Every experience I have had with them is great. My single disappointment with them was when they ended their relationship with the military exchange system. That was actually where I first learned of them. AAFES has a relationship with several online retailers (“Exchange Online Mall”) who have agreed to give military discounts, etc. to bona fide military customers. I started shopping at Zappos when they were one of those retailers (and exclusively shoes). After a few purchases, one day I logged on and they were no longer on the list. I contacted AAFES and was told that Zappos had elected to end the relationship. I tried the shoe retailer that was now listed on the site, and made a couple of purchases from them. After two or three bad experiences (placing an order and finding out several days later that it was out of stock and it took that long to notify me), I went back to Zappos and decided that the better customer service was worth the difference in price of not having the military discount. The first purchase I made after switching back, I had a status of my order within minutes and shipping notification by the end of the day. The second, they upgraded my shipping. I do still wish Zappos would re-instate their relationship with AAFES…
Hi Nancy: So great to hear from you. I wasn’t aware of the previous relationship with AAFES. I wonder if any Zappos folks reading this will respond with the history there. Let’s see if we get a response.
I really enjoyed reading this blog and the comments, too. We definitely appreciate all of your support. Obviously, we couldn’t do what we do without folks like you. 🙂
As far as the AAFES goes, there were some issues on the back-end of things. We tried to negotiate the contract, but we couldn’t come to a compromise that would benefit both of us. Sadly, we had to walk away.
We definitely didn’t want to inconvenience anyone, but we definitely want to thank everyone who continued to shop with us — like you, Nancy. Thank you!!!