Tony Hsieh started his career as a corporate employee at Oracle. Like many college graduates entering the workforce, he found himself disillusioned and disappointed in the reality of corporate life. Unlike most of his peers, he decided to do something about it. Only 5-months into his new job, he quit to co-found his own business with Sanjay Madan.
This first venture, LinkExchange, was an Internet advertising network that was later sold to Microsoft for $265 million dollars. Next, he co-founded the investment firm Venture Frogs, and also became the CEO of Zappos, which would go on to grow unimaginably under his leadership and ultimately define his career so far. With a net worth of nearly $900 million dollars today, Hsieh’s business success is considerable. However, his biggest contributions are to be found in the innovations in corporate culture that he has trail-blazed more than the wealth he has generated for himself and his businesses.
Relationships over profit
Hsieh believes strongly in putting relationship first in business. That means relationships between businesses and customers, relationships between businesses and employees, and relationships between employees. This view is especially reflected in Zappos’ hiring process, in which employees are gauged explicitly not only on their general fitness for the job, but also on their personality. Hsieh wanted all his employees to be the kind of person that he himself wanted to get to know better and to sit down for a drink with.
Building real personal relationships allows people to communicate more effectively, to apply themselves more fully, to be happier, and to simply work better. He doesn’t just support this view verbally, it’s reflected in his business practices, and validated by his success.
In his book, “Delivering Happiness”, Hsieh repeatedly addresses the issue of work stress, burnout, and work-life balance. Instead of advocating for keeping our personal and work lives separate, he advocates for making work rewarding and fulfilling on its own merit. He states “…when people dread going to work on Monday morning, it’s because they know they are leaving a piece of themselves at home.”
Hsieh believes businesses should empower employees to pursue personal growth, and encourage them to find their purpose and apply themselves to their task in their own way.
In an era when businesses have increasingly switched to automated messages, emails, and chat support, Hsieh swears by the power of the phone call. Zappos lists their phone number at the very top of their website in bright bold lettering, and encourages customer service representatives to engage with and build relationships with customers. The focus is not on solving a problem and getting to the next call, but rather on representing the business in a personal and meaningful way.
According to their figures, only about 5% of Zappos’ sales are made by phone, but a much larger portion of repeat customers will call the company at some point in their time as a customer. Phone calls, unlike written communication, are a direct human interaction, which offers an important opportunity. That single phone call is likely to inform that caller’s relationship with the Zappos brand in all their future purchasing decisions, regardless whether they ever contact the business again. By going out of their way to make a connection during that one phone call, Hsieh believes they can cultivate the happiest and most loyal customers in the world.
Return on collisions
In 2009 Hsieh organised a revitalisation project for downtown Las Vegas, where Zappos is headquartered. Among other things, the initiative provides free office space and funding for a diverse set of creatives and entrepreneurs. Rather than focusing on the return on investment of individuals, Hsieh instead made it the project’s mission to bring various wiz kids, “change makers”, and creative thinkers into close proximity with each other. The purpose of this is not to empower individual projects, but to encourage “collisions”, or serendipitous encounters.
Increasing the odds that interesting individuals like this meet, connect, and exchange ideas with each other gives them what extra something that they need to to spark innovation and to bring disruptive ideas to life. This approach is less about finding and investing in great businesses so much as it is about “institutionalising return on luck” to turn great potential into great businesses.
In Hsieh’s view, the relationships that individuals have, the way they connect to other people, and the chance encounters they expose themselves to make people more creative, happier, and more productive at work. His personal success, the reputation of his ventures, and the vibrant cultures he has nurtured show that businesses of all sizes stand to learn something from his unique approach, both to create a better working environment, and to create a healthier and more innovative corporate culture.