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Zappos CEO on corporate culture and ‘Happiness’

Marketplace Staff Jul 25, 2011

As we make our way through the maze of cubicles and conference rooms, different departments introduced themselves with different noise-makers. Western wear rang cowbells for us; dinner bells announced the clothing team; and the travel team, for some reason, happily squeezed rubber ducks. Down the hall, in the lunch room, a woman was singing karaoke, pretty well too, actually.

At some point, you figure they are getting work done. But one thing you won’t find is an office with Tony Hsieh’s name on it. He works at a regular desk in a cluster of cubicles decked out in dark plastic jungle vines. It’s known as “Monkey Row.”

RYSSDAL: I have to ask you the productivity question, because we are here surrounded by people who are, many of whom are working, but there’s another sizeable group that’s standing around chit-chatting. There’s a party down the hall that’s been going on for an hour. How does all this affect actually day-in and day-out selling shoes?

HSIEH: Probably the easiest example to give is when we do new management orientations, we encourage new managers to spend 10 to 20 percent of their time outside the office. So what you are seeing now, consider that… maybe “away from their desk” might be a better term. But a lot of that is actually outside the office, whether it’s going bowling with your team or happy hour with the people you work with and so on.

The initial reaction we get from new managers is “OK, that’s great, sounds like fun, but there’s a lot of work to do. What about productivity?” And then we ask the managers that have done it, how much more productive and efficient is their team, because there’s higher levels of trust; communication is better; people are willing to do favors for each other ’cause they are doing favors for friends not just coworkers. And the answers we get back range from 20 percent to even 100 percent more productive. So kind of a worse case scenario, you break even and you’re having more fun doing it.

They’re definitely having fun. Zappos has been ranked among the best places in the country to work. And all the high jinx don’t seem to be hurting the bottom line either. Zappos took in more than a billion dollars in sales last year. It’s actually been growing at time when most other shoe retailers are struggling.

Maybe because of that, Tony Hsieh has become an accidental management guru. People and companies pay thousands of dollars to come and learn the ways of Zappos corporate culture. Hsieh’s even written a book about it a New York Times best-seller called “Delivering Happiness.”

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