Zappos holds the distinction of being one of the largest online retailers of clothing, shoes, and accessories. But for entrepreneurs and corporate leaders, it is much more than just a profitable business. Zappos ascribes its success to its values-based culture, and its culture stories and unique best practices are well-known. The company has become a clear poster child for culture, leading to the creation of Zappos Insights, “a team within the Zappos Family of Companies created simply to help share the Zappos Culture with the world.”
As Culture Evangelist at Zappos Insights, Jon Wolske is tasked with “taking the culture show on the road.” He brought his one-man show to the 2nd Annual Ultimate Culture Conference, going beyond the standard Zappos culture fare to take a deep dive into what makes the company a thought leader in culture.
Zappos’ in-house “rockstar”
“Rockstar” Jon took the stage with enthusiasm and started by sharing his belief about what defines culture. “For me it’s the attitudes, the feelings, the values, and behaviors that characterize and inform a group and its members,” he said. “That’s even still kind of like grabbing smoke. What is it really? My belief is that culture is who you are. One of the things at Zappos we believe is that your culture and your brand are two sides of the same coin. So, it’s who you are. It should guide and inform how you do what you do, and should always point you to why. Why do you do what you do?”
Your culture and your brand are two sides of the same coin.
Zappos’ values stood out to Jon from the day he joined the company, but he didn’t start out in his current position, which he calls “the best job in the world.” Jon began his Zappos journey with a job in their call center. “I took a job in the call center because I needed a job that offered health insurance. I didn’t know anything about the company. I really didn’t know anything about the culture. I wanted to get real for my family. I found a company that was so much more than a call center job, so much more than a customer service job. They had this thing, this culture, that was driving it all.”
His enthusiasm led him to a new role as Zappos’ first tour guide. He helped build their tour process to support the infamous “wow” experience that drives Zappos. Tours at Zappos are now legendary, and they host more than 1,200 visitors every month. It might seem surprising that so many people come out to visit a functioning office, but as Jon said, “it’s not about seeing what we do—it’s about feeling. What does it feel like when you come on the campus? That’s the best way to describe it. You walk into the lobby and there’s a feeling.” This feeling comes, in part, from Zappos’ dedication to their core values, which present clear expectations to team members and business partners.
Video Clip: Hear Jon on the Zappos “WOW” experience:
Disrupting to stay the same
“Sometimes, even when you do have good things going, you have to shake things up to keep those good things,” said Jon. Zappos’ rapid growth, combined with its merger with Amazon, increased the team to more than 1,500 employees and necessitated a move to a new campus. “We were focusing on growing as a business, and we were hiring for culture, and our business decisions were made with the culture in mind, but still, as we grew, those people who had great ideas were no longer able to make them happen. Without realizing it, as we grew, bureaucracy had crept in and started to kill new ideas.”
While autonomy and empowerment are not explicitly listed in Zappos’ core values, they were always a very important part of Zappos. With the company’s growth, however, came “layers of managers and managers and managers. Guess what happens? You start managing the ideas out. Or, somebody grabs a hold of a great idea and they twist it to their own thought process, and it’s completely different than the intention from the person who thought they had a great idea. [That person] doesn’t see it come to fruition, and they stop having great ideas.” While decisions were still being made with culture in mind, problems began to surface. “We found that, oh no, the innovation’s gone. How do we stop that?”
Zappos realized that “you can’t formalize the past”—the autonomy and empowerment that was once present in the culture grew organically because it needed to be there. But they didn’t say, as many others do, “let’s get back to our roots.” They decided to take a hard look at their structure.
The problem with growth
Jon shared an interesting insight from the book The Triumph of the City1: “As a city grows, productivity per individual increases. As organizations grow, productivity per individual decreases. We are experiencing that trend, right? What if we could organize more like a city? There are all sorts of crazy things that you could do. But how do you restructure a company?”
As a result of its growth, Zappos had slipped into the typical organizational structure based on a “command and control” model. Decisions were made at the top, leaving the people doing the work without a say in how things were done. “For years and years and years we have been working top-down, and people are just starting to realize, wait a minute, what if working top-down isn’t working?” Jon said. “And so, on the bigger picture of organizational structure, somebody is going to figure out what’s next and then all those old-school businesses are going to be left in the dust. So how else can we work as an organization?”
Self-organization and holacracy
Self-organization is not new. Companies like Gore and Morning Star Farms have excelled with self-organization. Tony Hsieh, Zappos’ CEO, ran into the gentlemen that created a system called holacracy. They decided to “use a system that existed to get us into self-organization and self-management with the end goal being self-organization and self-management.”
“So, for us holacracy was the tool that we chose. Holacracy says instead of working top-down in departments, you work in circles.” Jon explained how, in this structure, “You answer to your circle. It is self-managed in that if this table here was one circle and they have different roles, you’re going to get together and manage, which means you’re going to talk about any opportunities or concerns or questions about your work, but there’s not that one person managing it. Shouldn’t the people who do the work own the decisions?”
Exciting circles at Zappos
The holacracy structure not only gives employees the autonomy to make their own decisions; it also allows for the freedom to try new things—and, in the case of Zappos, help the organization regain its innovativeness. “If somebody says, ‘I think we need to have a circle that does X, Y, and Z,’ you can come up with all sorts of great ways to say that’s not a good idea, right? Ultimately what happens is there’s a process to say, okay, is it actually not safe to try? Will it cause us harm or move us backwards? And guess what happens guys: Most things won’t cause you harm or move you backwards to try. So, we heard earlier you can’t be afraid to fail. Why should we try? Because you might fail, and you’ll learn from that.”
Switching to a circle structure (including interesting circles like sexy infrastructure, flywheel operations, wowing customers, brand aura and storytelling, and Zappos 2.0) has led to some “amazing wins” for Zappos. “It’s getting back to what we need it to be, and the opportunities are arising to do things completely different than we ever imagined.”
Opportunities are arising to do things completely different than we ever imagined.
“We can now see that how are we working together as an organization is actually working better. Because while I may hold a tiny role in your circle, I know you and I know your folks, and I know more of the company that I would know if I was simply working one job and doing what we used to do.”
“Don’t be afraid to try”
Jon shared one of Zappos’ amazing wins, where the lead link for their Brand Aura circle partnered with their charity team. They worked with the Best Friends Animal Society to sponsor an “adopt an animal at Christmas” campaign, and Zappos picked up the fee for each adoption. It was a huge success that generated more than six million click-throughs to the Zappos website, won a charitable PR and marketing award, and resulted in 6,000 adoptions.
But Jon is quick to mention that it’s not perfect. There are problems that do arise, and he gave an interesting example: “We took away the attendance policy in the contact center. Do you know what happens when you take away an attendance policy in a contact center? People stop showing up. We learned a lot of great lessons.” In this case, they re-grouped and decided, “okay this is not right, we should have something formal.” The key is “don’t be afraid to try.”
A closing point about purpose
The Zappos team was challenged at a recent all-hands meeting “to think about Zappos—not shoes, not retail—based on our values, our brand, what should we be doing. Nothing is out of the question if you’re passionate about it and we can actually get the resources to start doing it.”
The challenge continues on a daily basis to make sure everyone lives the values and mission of the organization—to deliver the “wow” experience. “It’s got to be about purpose before it’s about anything else for us. Are you creating great experiences in all directions? So, we know that moving forward, Zappos is going to be about so much more than just selling shoes on a website, and the sky is absolutely the limit.”
How does your organization foster a “wow!” experience in the workplace? And have you considered an alternative organizational structure? We invite your thoughts and comments via social media.
Visit our video library and join the Ultimate Culture Community to view Jon’s full presentation and receive access to all conference videos and updates on new posts.
Article direction: Tim Kuppler.
1 Glaeser, E. (2012.) The Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. London: Penguin Books.