Zappos CEO uses company culture to boost bottom line

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Before joining Zappos, chief executive officer Tony Hsieh dreaded coming to work at his own company. It wasn't fun to work there anymore because the company culture went completely down the drain, he told the audience in his keynote address the annual Society for Human Resource Management conference in Las Vegas.

When he began his work at Zappos, he decided to make a change. Eventually, the company mission evolved from having the greatest selection of shoes online to providing the best customer service to having a dynamic and fulfilling company culture. Along the way he learned lessons to share with other organizations trying to do right by shareholders and employees at the same time.

"Our number one priority is company culture," he explained. "If we get the company culture right, then . . . delivering great customers service or building a long-term brand or business will follow."

At first, company leaders, Hsieh included, resisted drafting core values because it seemed very corporate and often read like a press release. But, executives asked employees for their suggestions and a year later released the values.

Zappos' culture begins with the hiring process. Potential candidates participate in two sets of interviews and they need to pass both in order to be hired. Often, hiring managers pass on otherwise talented individuals who do not fit with their company culture.

The first set of interviews inquire into a candidate's experience and skills, while the second set determines whether they would be a good fit within the team. The second interviews include questions concerning Zappos' core values.

For example, hiring managers seek to determine whether job seekers value honest relationships, transparency, embrace opportunity and are humble, among other qualities.

Zappos uses a special approach to determine candidates' humility. After interviews, HR directors contact the shuttle driver who brought the applicant to the company offices and ask the driver how he/she was treated. If a candidate didn't treat the driver with kindness and respect, the candidate won't be hired, no matter how well they did on the actual interviews.

Zappos also asks potential hires on a scale of one to 10 how lucky they are, Hsieh said, joking, "Obviously, we don't hire those with bad luck." After applicants offer their answer, they are asked to scan a fake newspaper to determine the number of photos. Within the newspaper is a headline that gives them the answer. According to research, those that say they are luckier found the headline. Luck is about being open to opportunity, said Hsieh, an important value for the company and their employees.

To ensure the values are taken seriously, they are fully integrated in the company's culture - to the point that not following the values is grounds for termination.

"It actually doesn't matter what your values are; what matters is that you have them and that you align your organization around them and you're willing to hire and fire people based on them and it can impact their actual job performance," he said.

Hsieh recommended employers go to to help them figure out the values that are right for their organization and how to implement them.


Zappos family core values

Here are the 10 core values Zappos lives by. They're used to develop the company's culture, its brand and its business strategies:

* Deliver WOW through service.

* Embrace and drive change.

* Create fun and a little weirdness.

* Be adventurous, creative and open-minded.

* Pursue growth and learning.

* Build open and honest relationships with communication.

* Build a positive team and family spirit.

* Do more with less.

* Be passionate and determined.

* Be humble.

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