This past week, arguably one of the greatest business leaders our country has ever seen died at the age of 46. I learned about Tony Hsieh, the former CEO of Zappos, in 2010 after reading his bestselling entrepreneurial manual, “Delivering Happiness.” His passion and understanding of how a relentless drive to build a strong company culture and provide exceptional customer service can transform a company from good to great has inspired entrepreneurs and CEOs globally.
Tony Hsieh’s teachings are not just for big companies. I have leveraged them over the last several years when working with local entrepreneurs in the Clatsop Small Business Development Center’s Small Business Management Program. We have explored many key tenants of Hsieh’s leadership and Zappos’s success, some of which I have outlined below, with questions that businesses of any size can ponder:
Look out for indicators of emerging market opportunities: Founded in 1999, Zappos was the brainchild of Nick Swinmurn who pitched Hsieh’s investment firm on the idea that the shoe market, then a $40-billion business in the US, was ripe for disruption. Mail order purchases were the fastest growing segment at the time (5%) providing an indicator that consumers could be open to buying shoes online, despite not being able to try them on. Question: If a new competitor were to enter your market, what part of your market share would they try to take and how can you act to protect it?
Build subject matter expertise into your leadership team: Nobody on the founding team were shoe guys and they recognized that to aggressively and successfully disrupt the market, they needed an expert who could help guide them in the industry. They brought in an ace from Nordstrom’s, Fred Mossler, to design and lead their buying strategy. Then, as Zappos began to emerge from startup into a fledgling company, it recognized a need for a leader who could take the whole company to the next level and so Hsieh stepped in from the investor seat to take the helm as CEO. Question: Successful business leaders quickly recognize their skill or expertise gaps — and are not afraid to ask for help or bring in people who can help fill in. Where do you need help?
Understand your leadership style: Hsieh was a self-admitted introvert, an oft atypical style for a CEO. Yet rather than shy away from leadership, he recognized how to surround himself with people who could flourish working for, and with him. Hsieh described himself in a 2017 interview on NPR’s “How I Built This” to host Guy Raz as “not as the tallest, most vibrant flower in the greenhouse.” Instead he saw himself as the “architect of the greenhouse where all the plants flourished.” Question: Are there any adaptations you can make to your leadership style to bring out the best in your employees?
Company culture drives everything: At Zappos, the 10 core values that drive their company culture are what they hire for, and fire by. The belief is that if you get all your employees to embrace the spirit of the company, building a strong brand and long-term customer will occur naturally as a result. Question: Do you know your core values that guide your employees’ decision making?
Don’t sell stuff, sell service: Hsieh described Zappos in that same interview with Raz as “a customer service company that just happened to sell shoes.” Customer service, not profits, was the north star for Zappos and their top core value was to “deliver WOW through service.” In fact, Zappos did this so well that they fended off Amazon’s attempt to launch a killer competitor, “Endless,” in the mid-2000s but Zappos’s relentless focus on the customer gave them such a foothold that Endless was shuttered and Jeff Bezos, founder and CEO of Amazon, was forced to remark, “Zappos has a customer obsession which is so easy for me to admire. It is the starting point for Zappos. It is the place where Zappos begins and ends.” Zappos eventually agreed to sell to Amazon for $1.2 billion — but only after Amazon agreed that Zappos could remain a separate and autonomous subsidiary and maintain its culture. Question: Is serving the customer truly at the heart of your business strategy to the point where it gives you a competitive edge?
Tony Hsieh stepped down as CEO from Zappos in August 2020 and died Nov. 27, 2020 due to complications from a house fire. In those short 46 years he built a legacy and leaves behind a forever changed business landscape having proved that companies that build a positive company culture and relentlessly focus on customer happiness can beat faster, cheaper, easier. Inspired to explore more? The Clatsop SBDC will be reading Tony’s bestseller “Delivering Happiness” at a future Books & Brews Leadership Book Club. Stay tuned!
Jessica Newhall is the associate director and Small Business Management program manager for the Clatsop Community College Small Business Development Center. She can be reached at firstname.lastname@example.org.