If you don’t know the name “Tony Hsieh”, get to know it. (It’s pronounced “Shay”) Tony is the CEO of the much lauded “Zappos”; an online shoe retailer that has been quietly revolutionizing what it means to be a successful business in the 21st century.
Tony sells shoes. The exact same shoes that you can pick up at your local mall, or through any one of the thousands of other online shopping sites. He isn’t cheaper and while his selection is impressive, there’s very little that separates the Zappos website from its competitors. So, why then did Amazon CEO, Jeff Bezos, purchase 100% of Zappos shares… to the tune of 1.2 Billion dollars?
Delivering Happiness is Tony Hsieh’s quasi-autobiography that tracks the ten years he spent building Zappos from nothing into one of the world’s leading online retailers. Like many business biographies, Delivering Happiness recounts and provides insight on the successes, the spectacular failures and the hurdles in between that Tony and his merry band encountered on their path to greatness. But there’s a difference to this book over many other success story narratives. Tony’s only 36 years old. (34 when he wrote the book). Delivering Happiness is not the tale of a man looking back on his life, but rather the account of a man at the peak of his professional prime. And yet it reads like it was written by someone with the wisdom of decades in business. It reads like a book written by someone with a message that needs to be shared.
Focus. Then Experiment.
“A great company is more likely to die of indigestion from too much opportunity than starvation from too little.”
“Packard’s Law” as quoted in Delivering Happiness, page 89
Zappos is a testament to what’s possible for business – highly successful, profitable business – on today’s global stage. Hsieh and his team built Zappos to be the world’s leader not by focusing on the bottom line, but by focusing with zealous obsession on their key market differentiator – exceptional customer service.
You need to know what you’re good at. What you care about. You need to zero in on the one core area of your business that you want to be remembered for and become insanely good at that one thing. In a world with a virtually endless list of competitors, we no longer have the luxury of being best in class at all aspects of our business. You can’t be everything to everyone. And so, we need to start making distinctions as to who we’re appealing to, and obsessing over what would make that person happy. The internet has widened the world’s stage, meaning that we now have access to an unprecedented number of prospects. The more clear we are in our mission, purpose and offering, the more easily that world can find us.
As mentioned, Zappos is not the cheapest. They’re not trying to be. Until well after they became the significant market leader, they didn’t carry anything but shoes. They weren’t trying to be a one-stop-shop. Instead, they focused exclusively on delighting their client base – going above and beyond the expected level of service for those who were attracted to their offering in the first place.
Having a singular focus of delighting customers at every turn (“Delivering Happiness”, as Tony calls it) allowed Zappos the luxury of knowing which business decisions were right for the long term success of their brand, even despite potential short term setbacks. With that singular focus shared company wide – truly lived and breathed within the halls of the Zappos offices and call center – all staff knew where the priorities of the company lay. And that may be the key to Zappos’ success.
“At Zappos, as with all the core values, Being Adventurous, Creative, and Open-Minded is not a recommendation; it’s the way we live.”
Delivering Happiness, page 169
Culture is king at Zappos. So much so that, several years ago, Tony took it upon himself to create a “Culture Book”; a physically printed and bound book, outlining the ten core values of the company, along with detailed explanations of each and employee stories of the values at work. Every employee gets a copy, and every employee knows the ten values verbatim.
Could you repeat your company’s values right now? how often do you think about them? Zappos employees don’t just know the core values, they live them. Zappos has turned exemplifying the core values into a badge of honor – something for which people are recognized and rewarded. The value to this, from an executive perspective, should be obvious: When all your people know exactly what “success” and “the right attitude” mean in an office environment, they’re free to play within those guidelines; free to experiment and push the boundaries of what’s been done before. And play they do.
By providing a clear goal (deliver happiness), combined with a publicly stated set of boundaries (the ten core values), Zappos has created a “safe environment” for employees; one in which they have permission and encouragement to experiment on how they deliver.
We can absolutely apply this to our own lives.
What’s your goal? (pick an arena of your life)
What are the values with which you want to accomplish that goal? Can you define them?
What works for a company like Zappos can work in our own lives and work.
A Hierarchy of Happiness
“Meeting Expectations < Meeting Desires < Meeting Unrecognized Needs”
paraphrased from Delivering Happiness, page 235
For many people starting a new job as a call center employee, management is not an immediate aspiration. That doesn’t stop the Zappos team. From the minute they finish the four week training course, all employees have an opportunity to participate in “The Pipeline”; a seven year program that can take anyone from entry level call center attendant to senior management. Zappos provides the training, mentorship and opportunity to climb the company ladder all the way to the top. And on your first day, you may not even have known you were interested in management.
Towards the end of Delivering Happiness, Hsieh spends 12 pages looking at the psychology behind happiness. He borrows from Chip Conley’s Peak in looking at how Maslow’s Hierarchy of Need and how it can be condensed to three levels of happiness: meeting expectations, meeting desires and meeting unrecognized needs. Obviously, you need to be meeting expectations to be considered, and you need to meet desires to have any modicum of success. However, it’s when you start to meet unrecognized needs that you begin to delight your customers. “The Zappos Pipeline” is Hsieh’s way of meeting the unrecognized needs of his employees. A free upgrade to overnight shipping is how Zappos does it for his customers.
Hsieh understands the power of going beyond what’s expected, particularly in our ever increasing word of mouth world. People talk about that which surprises and delights them, and meeting unrecognized needs is sure to do both. It’s not a matter of doing the minimum, but of doing the maximum that leads to long term success.
Business success for this generation (both for the individual and the organization) will go to those who understand their strengths, build a culture around it, and use that culture as a framework to exploit every opportunity to delight their customer. Learn from Tony. He’s got 1.2 billion reasons to prove it works.