Core Values and Clear Vision
Every day, people in all walks of life, from movie stars and CEOs to members of the media and ordinary people, are using blogs, Twitter and other forms of online social media to discuss, share, announce something new or just to listen. It is the ultimate level playing field and is fair to all.
Tony Hsieh is quite a success story in the online world. While attending Harvard in the early 1990s, Hsieh earned money by selling pizzas. Then he got an idea for an online advertising company, and he eventually sold the company to Microsoft for $265 million.
In 1999, Hsieh became involved in a concept that would revolutionize how shoes are sold, using the Internet. The company is called Zappos, a derivation of the word zapatos, which is Spanish for shoes.
Part of the reason for Zappos’ meteoric success is that it got the economics and operations right. The company offers customers a huge selection of inventory — four million pairs of shoes (and other items, such as handbags and apparel) — which is housed in a warehouse in Kentucky next to a UPS shipping hub. Furthermore, Zappos offers free delivery … and free return if you don’t like the shoes.
Zappos has grown to more than 1,400 employees, roughly half at corporate headquarters near Las Vegas, Nevada, and the other half in Kentucky; has been recognized as one of the best companies in America to work for; and, with more than ten million customers, sells more shoes than any other company on the planet.
Zappos has become a billion dollar business, and much of it has been done online, from taking orders and customer service to Hsieh having daily conversations with his customers through his CEO blog and on Twitter.
Hsieh has used the Internet not only to connect with his public and customers, but also to drive broad awareness. Sure, there has been tons of mainstream and online media coverage about Hsieh and Zappos — from Oprah and 60 Minutes to BusinessWeek — yet the catalyst that caught everyone’s attention was how Hsieh communicated his authentic, sincere and open style online.
Early on, Hsieh recognized the importance of investing time personally to establish and build relationships with everyone from customers and employees to reporters and people who are just curious and in the process. He is respected as a business entrepreneur and thought leader who is accessible through his blog, personal e-mail and online social media sites, such as Twitter. I caught up with him via a series of e-mails for an online interview.
When I asked Hsieh to name the three most important elements of business in the digital age, he responded, “I would boil it down to just one thing: Embrace transparency.
With the digital revolution,” Hsieh e-scribbled, “all companies are becoming more transparent, whether they like it or not. The ones that choose to embrace transparency will be the ones that gain more trust with their employees and customers, and those are the ones that are much more likely to be successful in the long term.”
Aside from his being a smart visionary with a keen sense for the online environment, I asked what made him see the importance of connecting with audiences through social media.
“At Zappos, our number one priority is our company culture,” says Hsieh. “Our belief is that if we get the culture right, most of the other stuff, like delivery, great customer service and building a long-term enduring brand, will happen naturally, on its own.”
“Could the Zappos business model be transplanted to revitalize such old institutions as General Motors or Amtrak?” I asked. “In other words, could the Zappos magic be cloned successfully?”
“I don’t think the Zappos culture can be or should be cloned, but I do think the idea of being transparent and running a business based on core values and a meaningful vision that’s not just about money and profits can work for any organization,” he said. “It doesn’t really matter what the core values are, as long as the entire organization commits to those core values. The most important thing in any large organization is alignment [around values and vision].”
©2009 David E. Henderson
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