Tuesday, August 3, 2010

On leadership: a few words from CEO Tony Hsieh

Read what Zappos.com CEO Tony Hsieh has to say about leadership. He has a new book coming out, Delivering Happiness, and he knows a few things about workplace communication and what it means to truly engage your workforce.

Tony Hsieh: For us, the whole belief is that our culture should be our number one priority, and if we get the culture right then most of the other stuff -- like great customer service, building a long term enduring brand -- will just happen naturally on its own.

We actually have ten core values, essentially a formalized definition of our culture. A lot of companies have what they call core values or guiding principles and so on. The problem is that they are usually very lofty sounding and they read like a press release the marketing department put out, and maybe you learn about it on day one of orientation but then it becomes just a plaque on the lobby wall.
For us we wanted to come up with 'committable' core values, and by committable I mean we are willing to hire and fire people based on whether they are living up to those core values, independent of their actual job performance.

When managers from other companies join us, we tell them we expect them to be spending 10 to 20 percent of their time outside the office, hanging out with their team, getting to know the people they work with. They are initially surprised and ask us, "That sounds fun, but is it really working?" Then we ask the people who have actually done it, 'How much more productive and effective is your team because of the higher levels of trust?' Communication is better; people are willing to do favors for each other because they are doing favors for friends not just co-workers. The answers we get back as far as increased productivity is anywhere from 20 percent to 100 percent.

Tom Heath: So, as a leader, happy employees translate into healthy bottom lines?

Tony Hsieh: It is necessary but not sufficient. There are so many companies where the company culture goes downhill as the company gets bigger, and not only do we not want that to happen, we actually want it to scale, and to get stronger and stronger as the company grows.

Every employee understands that part of their job description is actually to live and inspire the culture in others. A lot of it is done on the front end; during the hiring process we do two sets of interviews. The first set is kind of the standard -- the hiring manager and his or her team will look for someone to a fit within the team, relevant experience, technical ability and so on, but then we do a separate, second set of interviews with our HR team, and they look purely for a culture fit, and they have to pass both in order to be hired. We have passed on a lot of smart and talented people that we know can make an immediate impact on our top or bottom line but if they are not a culture fit, we won't hire them. Click here to read the rest of the interview.

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