Zappos Milestone: Q&A With Tony Hsieh CEO Tony Hsieh's mission is to spread happiness to his customers and employees — and quite possibly change the tone of business as we know it.

Tony Hsieh

Tony Hsieh

Photo By Jim Laurie CEO Tony Hsieh’s mission is to spread happiness to his customers and employees — and quite possibly change the tone of business as we know it.

Tony Hsieh sums up the goal of quite simply: to deliver happiness in a box.

“Our customers call and e-mail us to say that’s how it feels when a Zappos box arrives,” he said. “And that’s how we view this company.”

Hsieh, who started out as an investor in Zappos in 1999 and soon after joined the company full time, said he’s learned that companies largely succeed and fail based on the strength of their culture and the passion of their employees. That’s a lesson he learned in the late 1990s, when his company, LinkExchange, underwent rapid growth and its culture became focused solely on increasing the value of the firm, which was later sold to Microsoft Corp. for $265 million.

“Businesses often forget about the culture, and ultimately, they suffer for it because you can’t deliver good service from unhappy employees,” Hsieh said. “LinkExchange grew so fast that it became impersonal and not as much fun. The priorities were different.”

That is part of what inspired Hsieh to use Zappos as his personal laboratory to test new ideas on how to build relationships and corporate culture, which he hopes will spread into the larger business community. “For me, part of it is about seeing what we can accomplish here at Zappos, but also seeing what we do here that can change other businesses and the world in general — whether it’s through inspiring other companies to deliver better customer service or to focus on their own company culture,” he said.

Footwear News sat down with Hsieh at the company’s Henderson, Nev., headquarters to talk about shaping a corporate culture, the importance of customer service and how the company is growing beyond its shoe niche.

FN: What does the 10-year milestone mean to you?
TH: It was in 2003 that we set the goal of hitting $1 billion in gross merchandise sales by 2010. That would have taken us 11 years, but we hit it last year, so we were pretty happy about that. For us, our goal for the first 10 years was to establish ourselves in the footwear market and build our brand around the best customer service and customer experience, and also build the company culture. One of our early goals was to make the Fortune list of the best companies to work for, and we just made that this past February. So we’re pretty happy.

FN: Is this how you imagined the company would look 10 years down the road?
TH: I didn’t really have any preconceived notions in terms of what exactly it would look like. Most of [the company’s evolution] is really driven by employees, not by me. I view my role more as trying to set up an environment where the personalities, creativity and individuality of all the different employees come out and can shine.

FN: How would you describe your management style?
TH: Our company culture is based on 10 core values that our employees came up with. My style is to make sure we’re always living by those core values and making decisions based on them. A lot of bigger companies might have what they call “core values” or “guiding principles,” but it’s usually something lofty sounding, like it comes out of a press release and the employees might learn about it on day one, but then it’s just a meaningless plaque on the wall. For us, we actually hire people based on these values, and we’ll fire people based on these values even if they’re doing their job perfectly fine. Part of my job is making sure that is implemented as a policy.

FN: Is the corporate culture an extension of your personality?
TH: The analogy I would use is that if you think of employees as, say, plants, I don’t see myself as the tallest plant that everyone aspires to be. I see my role as being the architect of the greenhouse, and they’ll figure out how to grow on their own. I’m generally pretty introverted and quieter and shy. I don’t think I’m representative of the energy you see out there.

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