It’s no surprise companies look up to Zappos for inspiration. The Las Vegas-based online apparel retailer has disrupted the traditional way of running a business and succeeded. Its CEO, Tony Hsieh, knew that in order to make customers happy, he first had to make his employees happy. As is often the case, Hsieh struggled with the culture in his first company. In fact, he hated it – so much so that he lost all motivation to show up. But through this experience, he learned that culture is more of a priority than the profit of a company. With Zappos, he promised himself that he would be more intentional about the culture he created, and the people he employed
Ultimately, a successful company hinges on the people you hire and how you onboard them, but that’s not all. Here are six lessons leaders can learn from Zappos CEO, Tony Hsieh to build a sustainable workplace culture.
Focus on building relationships
A company’s most valuable resource is its people. These are the subject matter experts that know the equipment, the processes and have ideas on how to innovate. The biggest mistake companies make is overlooking their resources (a.k.a, their people), and instead focusing on the results.
There are a wealth of benefits that can arise when leaders focus on building strong relationships with their employees: increased loyalty, trust, commitment, respect, productivity, innovation and performance to name just a few. Employees want to feel cared about. When employees have strong relationships with their managers, they’re more likely to exhibit prosocial behavior, such as being more collaborative.
What made Hsieh stand out is that he focused on delivering the best customer service and creating a culture that was unparalleled to others. Taking the time to get to know your team members on both a personal and professional level gives managers the opportunity to better understand what’s going on in their personal life that’s impacting their professional performance.
Not only that, but Hsieh has made it a point to build relationships with Zappos’ vendors as well. This has not only strengthened relationships, but strengthened the overall brand, because vendors want to go above and beyond for the clients who treat them well.
Give employees space to create and learn from mistakes
The most innovative companies are ones that encourage their employees to share opinions and ideas as well as take risks that could potentially fail. For example, 3M took a risk on the Post-It Note when it was discovered inadvertently by an employee circa 1980. Now, 3M produces more than 50 billion Post-It notes each year and has over 22,000 patents that are derived from employee side-projects.
Additionally, products such as Gmail and Adsense are a result of Google giving developers a percentage of their time to think of creative opportunities that would help grow Google. Google refers to its program as the 20% program which gives employees 20% of their time to create new projects.
Organizations such as LinkedIn, Jooble and Hewlett-Packard have all adopted similar programs. Thought not every company can afford to give their employees a percentage of time to dedicate to new projects or process improvement, they can encourage employees to take risks and think more creatively. Traditionally, companies discouraged their employees from taking risks. However, this has held companies back. Employees, especially the new generation of workers want to express their ideas and try new out-of-the-box things.
Zappos encourages their employees to use company resources for outside projects and Hsieh takes pride in his employees being their own mini-entrepreneurs. For this reason, Zappos has transitioned from hierarchy to a Holocracy, a management style that gives employees the flexibility to work with less oversight from managers and more freedom to take on new projects.
Prioritize leadership development
According to a 2017 study, 45% of managers reported that they have never received formal management training. In fact, research conducted by Jack Zenger found that most managers don’t receive training until they’ve been in a leadership role for almost 10 years. As a result, 60% of new managers under-perform in their first two years. Consequently, managers develop poor leadership habits that they’ve picked up from other managers, or from just trying to figure it out by themselves.
Employers who deny access to leadership development discourage managers from being successful. Being proactive and equipping employees with leadership skills before they step into a management role will undoubtedly help them be successful. Prioritizing leadership development through training, coaching and providing a toolbox of resources will prove to be invaluable to managers as well as their direct reports.
Define core values and turn them into actions
Core values serve as guidelines for any decision made within a company, from hiring to firing. The new generation of workers want to work for companies in which they align with their defined core values. However, the biggest mistake most companies make is not living up to their these values. Rather, they have them sprinkled throughout the website and on job descriptions to attract talent they think will resonate with them. But when that talent joins the company they’re soon disappointed.
So instead of using these generic descriptions, leaders should be living out their core values in everything they do and every decision they make. Employees should be doing the same. This is why it’s important to define core values that align with the direction of the business rather than implement generic ones that many companies use. Zappos, for instance, has 10 core values that it lives out every day in everything it does.
Be deliberate about building your culture
The mistake most leaders make is believing culture forms from the people they hire. Therefore, they don’t have a hands-on, intentional approach when it comes to creating it. As a result, toxic behaviors run rampant and the culture quickly becomes out of control. It’s not until a scandal breaks or a lawsuit occurs that the company is forced to take action to fix it. By then, it’s already too late, as the company’s reputation is tarnished and it loses its appeal for quality candidates to want to apply.
Being deliberate about building your culture from the start means hiring people who will add to the culture. It’s also about addressing toxic behaviors immediately and reinforcing expectations and core values. Zappos is a strong example of a company that was deliberate about building its culture. As a result, every employee is excited to make customers love the Zappos brand as much as they do.
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