Best Practices in Corporate Culture: Zappos

After being acquired by Amazon, the online shoe and clothing retailer continues to maintain the values and culture that have been with the company since the beginning.

Posted by Joe Gerard in Human Resources on July 6th, 2010

I frequently come across a number of articles related to the corporate culture at Zappos. After being acquired by Amazon, the online shoe and clothing retailer continues to maintain the values and culture that have been with the company since the beginning. New hires at Zappos receive 5 weeks of training in the areas of culture, core values, customer service and the company warehouse. The focus on culture is integrated into all departments, employee roles, performance reviews, mission, vision and goals at Zappos.

How Culture Survived an Acquisition

In July of 2009, Amazon announced they would acquire Zappos in a stock and cash deal, which ended up totaling $1.2 billion dollars when finalized. A Tech Crunch article, “Amazon Closes Zappos Deal, Ends Up Paying $1.2 Billion,” reported that “the Zappos management team will remain intact and the company will continue to operate as a wholly-owned subsidiary.” Zappos continues to operate separately from Amazon, providing CEO Tony Hsieh with the ability to manage the company the same as it was in the pre-acquisition days. The terms of the arrangement with Amazon has made it easier for Zappos to remain committed to the values and mission of the company that has been in place since day one.

Some of the interesting components that make the Zappos culture incredibly infectious include:

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1. Culture and Business “Fit”

Michael Sprouse, Chief Marketing Officer at Epic Advertising, said it well in his blog post “Zappos & the Importance of a Vibrant Corporate Culture“:

“Zappos’ culture is a little bit more casual, which is akin to the Internet marketing and e-commerce industries. This creates an environment of comfort for employees, so that they can focus on producing their best possible product.”

Sprouse’s point makes perfect sense. If it’s believed that employees will achieve success by being given freedom and focusing on culture and happiness rather than sales targets and financial goals, then go for it. While certain fundamental practices can be applied across industries, it’s important to remember that no company, or employee, is exactly the same. When creating a company’s mission and the desired corporate culture, think about the necessary elements for building a supportive environment that motivates employees to do their best work.

The interview process at Zappos is lengthy, but for a good reason. Zappos has benefited from their unwavering commitment to their culture. In a recent New Jersey Business article, “Zappos CEO Adds Happiness to Corporate Culture,” they interviewed Hsieh about finding employees that “fit” the Zappos culture:

“Our HR department does a separate set of interviews purely for a culture fit. We test for each and every one of the core values. One of the examples, which I guess is kind of hard to ask as a question, is core value No. 10: Be humble. A lot of candidates relocate, so we pick them up at the airport with the Zappos shuttle, drop them off at the office and they’ll go through the day. They’ll do a tour and their interviews. What most candidates don’t realize is that the interview started when they were picked up at the airport. That’s how we test their humility. The recruiting manager will circle back with the shuttle driver later and ask how they were treated when the candidate thought they were off the clock.”

2. The “Quitting Bonus”

Zappos will pay new hires $2000 to quit on their first day. To some, this idea may seem odd, however the justification of this practice from Hsieh makes sense. Hsieh feels that this practice helps weed out employees who may not be the right fit or have the passion required for the job. The article “Zappos: Can a Corporate Mission be Happiness?” by Nick Aster is based on Hsieh’s keynote speech at SXSW. In the article, Aster writes:

“Tony discussed the corporate culture itself, advising taking plenty of time to hire new employees, but wasting no time to fire those who do not contribute positively to the corporate culture. Barely 2% of new hires take the payout – ensuring that only people who see themselves as committed to meaningful work stay on.”

3. Customer-Centric Approach

The goal of every Zappos employee is to make customers happy.
The Zappos culture focuses on being the leader in customer service. The goal of every Zappos employee is to make customers happy. In the Bloomberg Businessweek article “Zappos Retails Its Culture,” they talk about the attempts made by employees to satisfy customers. In the article, they spoke with a customer service representative from Zappos, as well as Hsieh, who stated:

“More than 95% of Zappos’ transactions take place over the Web, so each actual phone call is a special opportunity. ‘They may only call once in their life, but that is our chance to wow them,’ Hsieh says.”

4. Office Tours

Anyone can take a tour of the Zappos office in Nevada. In the article, “Zappos CEO Adds Happiness to Corporate Culture,” Hsieh discussed the reactions from those who have taken a tour of the Zappos office:

“For several years now, we’ve given tours to the public. I usually ask people what surprised them the most at the end of the tour. The top response I get is that Zappos employees are friendly and say ‘hi’ to them and hold the door open for them while they wander around the office. Those in the tour groups say that in their own offices, when they pass an employee they don’t know, the person doesn’t even make eye contact.”

5. The Culture Book

The culture book was created as an outlet to allow the employees at Zappos catch a glimpse of their passion for their work. The book is available to the public to purchase from Included in the book is a series of short essays written by Zappos employees and their vendors, explaining the elements that make the Zappos company culture special and successful. Providing employees with the opportunity to contribute to these types of projects is empowering.

Here’s a video from the Zappos YouTube channel, where Zappos employees discuss what the Culture Book means to them:

Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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