July 11, 2011 Culture, HR, Leadership, Management

Company Culture always affects the bottom line

Zappos Chief Executive Tony Hsieh spoke at the annual Society for Human Resource Management conference this year.  He explained that before joining Zappos, he dreaded coming to work at his own company. It wasn’t fun to work there anymore
because the company culture went completely down the drain.

When he began his work at Zappos, he decided to make a change. Eventually, their company mission evolved from having the greatest selection of shoes online, to providing the best customer service, to having a dynamic and fulfilling company culture. Along the way he learned lessons to share with other organizations trying to do right by shareholders and employees at the same time.

“Our number one priority is company culture,” he explained. “If we get the company culture right, then . . .delivering great customers service or building a long-term brand or business will follow.”

Their culture begins with the hiring process. Potential candidates participate in two sets of interviews and they need to pass both in order to be hired. Often, they pass on very talented individuals that do not fit with their company culture.

The first set of interviews may inquire into the person’s experience and skills that would make them a good employee, while the second set determines whether they would be a good fit within the team. The second set includes questions concerning each of their core values.

Hsieh said at first, the company,  resisted drafting core values because it seemed very corporate and often they read like a press release. But, they asked the employees for their suggestions and a year later released the values.

To ensure that these values are taken seriously and integral in the company’s culture they must be committable core values. The company can fire people for not following the values, even if they are executing their traditional roles correctly.

For example, when interviewing, in order to determine whether one person would be able to thrive under these values, the company will try to determine whether they value honest relationships, transparency, embrace opportunity and are humble, among others.

Humility, the last value, is very difficult to determine, but after the interviews, HR will circle back with the shuttle driver who brought the applicant to the company offices and ask how they were treated. If they did not treat the driver with kindness and respect, then they won’t be hired, no matter how well they did on the actual interviews.

They also ask on a scale of 1 to 10 how lucky the potential hire is. Obviously, they don’t hire those with bad luck, he jokes. However, basing this exercise on a research study, after their answer they have them scan a fake newspaper for the number of photos. Within the newspaper is a headline that gives them the answer. According to research, those that answered that they were luckier found the headline. Luck is about
being open to opportunity, said Hsieh, an important value for the company and their employees.

“It actually doesn’t matter what your values are, what matters is that you have them and that you align your organization around them.  You may disagree with the values established by Zappos, but purposefully establishing a company culture works successfully
for many companies.