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For Sale: Business Culture

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A recent Business Week article, "Zappos Retails its Culture" offered a tantalizing proposition. After all, if an entrepreneur creates a successful business, why not sell the concept to other entrepreneurs interested in starting up new ventures?

So thought Tony Hsieh, Zappos Chief Executive. So, beginning last summer, Zappos began offering two day seminars at $4,000 a pop to share the successful Internet retailer's recipe for recreating "the essence of its corporate culture". Now, there are plans to offer these seminars once per quarter in 2010.

There's no doubt that Zappos is a successful online shoe retailer. In fact, in spite of the challenging retail climate of the past year, Zappos enjoyed a double digit sales increase. Amazon's Jeff Bezos was suitably impressed and purchased Zappos this past November for shares worth $1.2 billion.

It's obvious the company represents a strong, viable retail brand, when a great many heritage retail brands are in trouble. So why not share the formula for success by offering seminars?

Hsieh's seminars center on his culture where the topics of hiring, employee compensation, customer interaction and creating a positive work environment are top of mind. Hsieh himself, as well as a couple dozen members of his staff conduct these seminars.

Some of Zappos employee policies, as outlined in the article:



  • Call center operators' initial salary is $11.00 per hour.


  • There are no employee bonuses.


  • There are no 401K matching contributions. Hsieh believes productive employees derive the most satisfaction from helping their customers.


  • Customer service employees enjoy plenty of freedom—and latitude in doing their jobs. They can spend hours servicing one customer—even directing them to competitors' web sites. Whatever it takes to satisfy the customer's needs is job #1. Having fun while doing it is part of the job.


  • Over 95% of Zappos transactions occur online, so phone calls to customer service reps are viewed as opportunities to connect with consumers and "wow them" according to Hsieh.


  • Top priority: to establish emotional connections with the customer.


In reading all of this, a number of questions came to my mind, and I'm sure, to yours, too.


  • Do you think the Zappos culture can be easily replicated in other companies? Do you think it should be?


  • Does it make a difference if an entrepreneur who is starting up a new company tries to replicate the Zappos model, versus an established company trying to change an existing culture?


  • Do you believe each company has its own, unique culture based on its mix of executives and employees? Why or why not?


  • Lastly, do you think Zappos' employee policies would work for most companies? Why or why not?


I'd love to hear from you.


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Ted Mininni is president of Design Force, Inc. (www.designforceinc.com), a leading brand-design consultancy to consumer product companies (phone: 856-810-2277). Ted is also a regular contributor to the MarketingProfs blog, the Daily Fix.

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  • by Paul Wed Jan 13, 2010 via blog

    Ted, "how to" workshops on creating a dynamic and customer centered corporate culture are great. That said, the willingness to focus on the customer starts at the top. An approach like this needs a customer champion- CMO and preferably CEO. Without such support, companies can take away some insights, but true transformation? Doubtful.

  • by Ted Mininni Wed Jan 13, 2010 via blog

    Hi Paul, To some extent, I think you're right about the value of workshops like this. They can provide valuable insights. Still, I'm wondering whether a unique and successful culture built by one company can be emulated by another. . .you know what I mean? Thanks for sharing your insights, Paul. Much appreciated.

  • by Elaine Fogel Wed Jan 13, 2010 via blog

    Ted, professional development and education on creating a customer-centric organization are always valuable. However, Zappos has found their blue ocean difference. Other companies need to find theirs as well.

  • by Ted Mininni Wed Jan 13, 2010 via blog

    Elaine, I appreciate your insights. Looks like a wise statement from a wise woman. Thank you.

  • by Bobby Burns Thu Jan 14, 2010 via blog

    Ted, I have my own, more visceral, sense of what a company culture is: a 'personality' of a business. You can emulate, imitate, and even duplicate what I say and do, but in the end you will never be me and I will never be you. And why would you want to? Adopting some of the policies and practices might be a great idea and even beneficial, but that in itself is not synonymous with taking on Zappos' culture. Because a business is people working with and for other people, a business is at it's heart an 'organic' thing that develops a culture, a personality, a way of doing and being. This can be shaped, influenced and evne molded to some degree, but you cannot separate the impact and holistic effect of the people within the culture.

    At the end of the day, I want people to do business with my company and like my company because of who and what we are - not because we succeeded in being like someone else!

  • by Ted Mininni Thu Jan 14, 2010 via blog

    Hi Bobby,

    Thank you for weighing in on my post. All I have to say to your insights is this: exactly right. Every company is unique because it is comprised of its own unique group of employees. While it is possible to glean some good ideas from other enterprises, at the end of the day, it isn't possible to exactly copy them. . .nor, as you stated, should we want to. Rather, we can use the ideas of successful companies as a way to understand how important it is to build a strong company culture that is customer-centric from top to bottom. Do what you're doing with your own business; you've got the right idea. Thanks again, Bobby.

  • by patmcgraw Fri Jan 15, 2010 via blog

    Wow. $11 per hour, no bonus and no matching contribution 401K because "Hsieh believes productive employees derive the most satisfaction from helping their customers."

    Do you happen to know if Hsieh considers himself 'productive' and pays himself at the same rate?

    Just askin'.

  • by Ted Mininni Fri Jan 15, 2010 via blog

    Hi Pat,

    I know what you mean. It crossed my mind as I was writing this post: "I wonder how many employees would be happy with this compensation in most companies. . ." You've got to consider. Maybe they've been given stocks or some other perks we simply don't know about. The article did not elaborate on that. Great observation, though.

    Thanks for bringing up an important point, Pat. I appreciate it.

  • by Ron McManmon Mon Jan 18, 2010 via blog

    I had the privilege of visiting Zappos and was given the grand tour by Tony, Alfred and the gang. First, what this article doesn't reflect is after the training Tony will give the "soon to become employees" a few grand $$$ to not work at Zappos - Hmmm. Secondly, they have an extremely LOW attrition rate due to a number of reasons mentioned above.

    1 - They have fun... I would work for these guys any time!!!
    2 - They focus on making the customer happy resulting in job satisfaction!!!
    3 - They embrace and promote cross TRAINING and mitigate stagnation!!! This enables all Zappos employees the ability to grow into positions where 401K plans and bonus's are a possibility... So, they do not inhibit GROWTH and in fact promote it better than any company I have first hand knowledge.

    Last but not least, Tony works in a cubicle right along with his guys. Culture and environment is almost always created from the top down. I did not see ego's running around like "chickens with their heads cut off" - YIKERS. If a company wants to duplicate their processes (and In think it is a great idea to at least adopt some if the company wants to be successful with HR in the near future) then looking at there organization from the top down might make cents (sense)!

    Personally... I drank the Zappos Coolaid but I would add my own sugar:)

    Cheers Ron

  • by Ted Mininni Mon Jan 18, 2010 via blog

    Hi Ron,

    Loved your comments! Thanks for weighing in. Your observations mean a lot because you've drunk the Zappos Kool Aid as you pointed out yourself--tongue in cheek! Seriously though, it's nice to have insights on how Zappos' employees feel about their company and their remuneration packages. . .and more info on how it works. Love your observation about Tony Hsieh working in cubicle land with his employees and the fact that egos seem to have been checked at the door. All great stuff. You're right, Ron: there are aspects of Zappos' culture that could and should be emulated by other businesses. Just one thing: it's impossible to replicate exactly since every company has its own unique culture, right?

    Thanks for weighing in, Ron. Great stuff.

  • by John DeHart Tue May 18, 2010 via blog

    Great Questions:
    1. Do you think the Zappos culture can be easily replicated in other companies? Do you think it should be? The framework (Core Values, The Envisioend Future and Core Purpose) absolutely can be replicated in any company, however the actual culture can't. Culture should be and is unique to every company - it gives you your unique identity.

    2. Does it make a difference if an entrepreneur who is starting up a new company tries to replicate the Zappos model, versus an established company trying to change an existing culture? It is FAR easier to start on day 1 - to architect your culture from the start, then try to do it half way through. It is why most companies fail at building a great culture. And most entrepreneurs dont realize how important it is until much after they (we) start our companies.

    3. Do you believe each company has its own, unique culture based on its mix of executives and employees? Why or why not? Absolutely. When done right, your culture dictates who you hire, AND who you fire.

    4. Lastly, do you think Zappos’ employee policies would work for most companies? Why or why not? Nope. Those policies will work only if you have a great culture - thats the beauty of it!

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