Zappos and a Sustainable Culture
What are the key characteristics of your organizational culture?
It’s the third question asked by the Baldrige Criteria. Poudre Valley Health System focuses on its culture of engagement and innovation. Iredell-Statesville Schools is committed to a culture based on the principles and practices of performance excellence. The City of Coral Springs expresses its culture through four core values: customer focus, leadership, empowered employees, and continuous improvement.
The key characteristics of the cultures of these and other Baldrige Award winners are very similar.
Zappos went in a different direction, and its unusual culture is attracting a lot of interest, as Christopher Palmeri described in “Zappos Retails Its Culture” (BusinessWeek, December 30, 2009). Sixteen times a week, the online shoe retailer leads groups of 20 guests through its suburban Las Vegas headquarters. Last summer, Zappos started offering $4,000 seminars “on how to recreate the essence of its corporate culture.” It turns out that your culture can be a competitive—and financial—advantage.
Here’s an example of that culture. Zappos pays its call-center operators $11 an hour. No bonuses. No 401(k) matching funds. The CEO believes “the most productive employees work for the psychic gratification in helping others,” which sounds like a convenient rationale for not paying them what they’re worth, but they seem to buy into it.
On the plus side, Zappos’ customer service reps can spend as much time as they need helping a customer, which may include writing thank-you notes, sending flowers, or directing customers to rivals when Zappos is out of stock. Since Zappos has been recognized for customer satisfaction, this approach appears to work.
As Zappos grew, it formalized the culture by identifying its key characteristics, which it defined in 10 core values:
- Deliver Wow through Service
- Be Passionate and Determined
- Embrace and Drive Change
- Build a Positive Team and Family Spirit
- Do More with Less
- Pursue Growth and Learning
- Create Fun and a Little Weirdness
- Build Open and Honest Relationships with Communication
- Be Adventurous, Creative and Open-Minded
- Be Humble
The company hires to these core values and 50% of every employee’s annual review is based on them. Considering they’re paid $11 an hour, customer service reps should get the highest rating on #5.
Two questions come to mind: Is such a culture sustainable? Can a culture created by an energetic startup serve a larger and growing company? Well, three questions: At what point is making a good living worth more than working in a cool place?
To read more about organizational culture, click on one of the following articles:
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