Last week I was traveling in my vehicle and I was listening to CNBC on my radio when a couple of business analysts began discussing Zappos, the shoe maker/direct sales company. As they were discussing the company they seemed amazed that the CEO of Zappos, Tony Hsieh, had spent so much time when he became CEO focusing on the values and the culture of Zappos first, insuring that they got those right before moving on to anything else. I seem to recall the words “fanatical about values and culture” mentioned by the analysts, and, of course, on the Zappos website they also talk about being “fanatical” about their values and culture.
While the business analysts were amazed, I wasn’t. Early on in our research, as early as 2002, we discovered that the organization’s Vision, comprised of an Aligned Purpose, Values and Goals, was a key Element in driving performance in organizations. Later on we discovered how the other Elements in the Seven Elements of High Performance™ work together to create an organization’s culture. What seems to set Zappos and similar high performance organizations apart from the rest is that they place an extraordinary amount of emphasis on how they interact with each other.
As we shared in our article about Understanding the Dynamics of Culture, there are two components of culture, or “how we do things around here.” There is the process side, or how we do what we do; and the interaction side, or how we treat people as we do what we do. Every organization, whether intentional or not, has a culture that comprises these two components. Most organizations that actively manage their culture seem to focus on the process side, trying to get their processes under control, lean, and working well. And while this is important, it isn’t where the emphasis needs to be at first.
As Hsieh realized early on, if everyone in the organization isn’t treating each other by a set of standards that promotes good relationships, then the process side of the culture will never be optimized. So he set out to insure that how Zappos interacts with people, internally and externally, encouraged good relationships. None of Zappos’ 10 Core Values mentions anything about money, revenue, or profits, yet, through this focus on Values and Culture, Hsieh took Zappos from virtually no sales to over $1 billion in sales in just 8 years, 2 years ahead of their plans. This led it to eventually be acquired by Amazon for $1.2 billion in 2009.
Hsieh still remains at the helm and still remains fanatical about the company’s values and culture. But it isn’t just the fanatical will of the CEO that leads to Zappos’ success. Everyone else in the organization is just as fanatical about the values and culture at Zappos. This has led Zappos to be named consistently to the Best Companies to Work For list since 2009, and remain a consistent performer financially, as well as having an impact in the community. Most organizations would love to have the kind of success and reputation that Zappos has.
Unfortunately, most organizations aren’t willing to be fanatical about their values and culture. Are you? What about the rest of the people in your organization?