Zappos Milestone: Company Culture

At Zappos, making work fun is as important as the work itself.

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Often, so-called Zapponians meet up after hours on their own. It was during one of these informal gatherings that the idea for the “Zappos Culture Book” was born. Over drinks, Hsieh and some of his colleagues decided it would be valuable to put together quotes from employees and vendor partners about what the Zappos culture means to them.

The 2008 edition of the book, which totaled nearly 500 pages, is a veritable love letter to the company. Among the hundreds of quotes are “I wake up every morning and think, ‘Today I am the luckiest guy in the world,’” from Jerry T., a help-desk employee. (All contributors are identified by their first names and last initial.) And Neil G., a customer-service employee, wrote, “When thinking about Zappos culture, one word comes to mind: family.”

The company’s culture-first mantra helped it land on Fortune’s annual “100 Best Companies to Work For” list, published in February. Zappos was the highest-ranking newcomer on the list, at No. 23, and was even mentioned on the cover.

But as the company grows, can it keep the tight-knit, family vibe intact?

Executives say yes, but they acknowledge it will be a challenge.

“You have to get more creative as the company grows and the economy changes,” said Jamie Naughton, who heads up the culture extras at Zappos. “Some programs that worked really well when we were a 200-person company don’t scale well now.”

But the challenging economic climate isn’t changing Zappos’ tune.

“I would imagine my kind of work would be cut at most companies [in this economy],” Naughton said. “But we haven’t taken anything away. Maybe it’s been scaled back to be more cost-efficient, but we all believe in what we’re doing.”

The Right Fit

While Zappos works hard to keep staffers satisfied once they’re in the door, getting a job at the company can be a challenge.

“We definitely have turned away a lot of people who might be very skilled technically, but who we sense aren’t going to contribute to our culture,” said recruiting manager Christa Foley.

After a minimum of two interviews (and as many as 10), selected applicants begin an intensive four-week training program that all employees, no matter their level, have to go through.

To make sure staffers are serious about the company — and its culture — Zappos offers a lucrative quit-now “bonus” two weeks into the training process. The firm has gotten a huge amount of press for the unusual initiative, which gives employees $2,000 to hit the road.

“[After CEO Tony Hsieh and I started the program], we got a lot of flack from human resources and legal for paying employees who weren’t committed to the company,” recalled Alfred Lin, chairman, COO and CFO. “But if you’re not committed, we’d rather you leave sooner rather than later. We know our recruiting team is good, but they’re not perfect.”

To date, less than 1 percent of new employees have taken the payout, and Lin said he thinks the offer might be too low. “It’s really a small amount to pay.”


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