AGS Conclave: Zappos CEO Emphasizes the Importance of Employee Happiness

Zappos, the online shoe retailer, owes its success to its
commitment to service and its positive company culture, CEO Tony Hsieh told
attendees at the American Gem Society Conclave in San Francisco April 29.

“We want to be about the best service,” he said.
“Internally, we have a saying that we are a service company that just happens
to sell shoes.”

He said that unlike many other online companies, Zappos’
1-800 customer service number is posted on every page of its website.

“We want to talk to our customers, as low-tech and unsexy as
that sounds,” he said. “We feel the telephone is one of the best ways to get
customers’ attention. We don’t try to upsell. We are trying to build a lifelong
relationship. We see the telephone as a branding device.”

But the company’s number one priority is its “corporate
culture,” which focuses on the happiness of its staff. One of its prime
innovations: After its people have completed their training, they are offered
$4,000 not to join the company.

“We don’t want people who are just there for a paycheck,” he
said. “We want people who believe in our culture. A company culture and its
brand are two sides of the same coin.”

One of the core values of the company is “being humble”—and
interview subjects are in part evaluated based on how they treat the shuttle
driver who drives them to the interview.

Another core value is a commitment to transparency. At
company meetings, employees can ask anything, and the meetings are streamed
live on the Internet. In addition, vendors have access to the company’s sales

“We now have another 1,500 eyes looking at [our
information,]” Hsieh said.  “A lot
of the vendors often catch things our buyers miss.”

Hsieh’s experience at Zappos had led him to study happiness.
He said a key to happiness is having a larger purpose in life.

“Every business has its ups and downs,” he said. “Rather
than money being the prime motivator, think about what you would be passionate
enough about that you could do it for the next ten years. That passion will get
you through the tough times.”

He said that his research has found that “companies with a
larger purpose actually generate more profit.”

“You have to look at what your company’s higher purpose is,
and what is your higher purpose,” he said.

Another element of happiness: “Perceived control.” Zappos
employees have complete autonomy on how they handle customer service calls.

“Our call centers don’t have scripts,” Hsieh said. “We just
care that, after our people hang up, they interacted in a way that was
authentic to their personality, and tended to the customer’s needs, so they go
away saying that was the best customer experience ever.”

Another thing that makes people happy is “perceived progress.”
 Zappos employees are given larger
promotions every 18 months, and smaller ones every six.

“We found employees were a lot happier because there was
perceived progress,” he said.

For more coverage on the AGS Conclave, click here.

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