Business Leadership Startups

Delivering Happiness: A Path to Profits, Passion, and Purpose (Summary)

by Tony Hsieh

What kind of company offers its new employees $2,000 to quit? Zappos did. After a month of training, every new hire was made 'The Offer.' If they felt the company wasn't for them, they could walk away with a check, no questions asked. This single, counterintuitive policy reveals the core secret to Zappos's billion-dollar success: they were willing to pay to protect their culture, betting that a team of truly passionate people was their ultimate competitive advantage.

Your Culture Is Your Brand

Hsieh argues that most marketing is a tax you pay for having an unremarkable product or culture. Instead, he invested Zappos's marketing budget into the customer experience and company culture, creating passionate employees and customers who became the company's best marketers.

Instead of spending millions on advertising, Zappos empowered its customer service reps to do whatever it takes to 'WOW' a customer. This included sending flowers to a grieving customer, ordering a pizza for a caller, or a famous 10-hour customer service call that was celebrated, not punished.

Hire and Fire Based on Core Values

Zappos established 10 core values that were more than just wall decor; they were the operating system for the company. These values were integrated into every aspect of the employee lifecycle, from hiring to performance reviews.

During the interview process, candidates were evaluated 50% on their technical skills and 50% on their fit with the core values. A brilliant engineer who was arrogant or failed to embody the value 'Be Humble' would not be hired, regardless of their talent.

Chase the Vision, Not the Money

Hsieh's earlier ventures taught him that financial success without passion and purpose is hollow. At Zappos, he focused first on the vision of delivering happiness, believing that profits would naturally follow from doing the right thing.

After selling his first company, LinkExchange, to Microsoft for $265 million, Hsieh was financially set but felt deeply unfulfilled because the company's culture had soured. This painful lesson drove him to structure Zappos completely differently, prioritizing the happiness of employees and customers above all else, which ultimately led to its acquisition by Amazon for $1.2 billion.

Use the Phone to Build Personal Connections

While other e-commerce companies tried to hide their phone numbers and minimize human contact, Zappos put their 1-800 number at the top of every single page. They viewed calls not as a cost center, but as a prime opportunity to build brand loyalty.

Zappos call center employees have no scripts and are not measured on call time. Their only goal is to make a personal emotional connection. A customer once called to return boots because her mother had passed away. The Zappos rep not only processed the return at no cost but also had a courier pick up the shoes and sent the customer a bouquet of flowers.

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