[To read previous posts about Big Omaha, click the appropriate link. Big Omaha: Day 2 (AM), Big Omaha: Day 2 (PM), Big Omaha: Day 3 (Dennis Crowley), and Big Omaha: Day 3 (Melody McCloskey) I didn’t set out to write separate posts for all the speakers on Day 3, but it ended up that way.]

After Melody McCloskey spoke, there was a panel discussion. While I was listening to bits and pieces of it, and it was good, a number of us were conversing on Twitter about Melody’s presentation. Those discussions continued into the break, where it seemed everyone I talked with had an opinion about Melody. The break was probably timely because it gave people a chance to release about Melody’s presentation, and then refocus for the final speaker. The final speaker being Zappos’ CEO Tony Hsieh.

Tony Hsieh
I had heard a lot of people buzzing about Tony Hsieh in the lead-up to Big Omaha. While I was familiar with Zappos, I was looking forward to hearing more about the company.
Tony started off by sharing about his early jobs. He started off at a pizza shop, where he shared how one customer would always come in and buy a pepperoni pizza every night. He often wondered why this person would be a pepperoni pizza every night. He came to find out the guy would take the pizza and then sell it by the slice for a profit. That guy was Alfred Lin, who is now the CFO of Zappos.
At 23, Tony co-founded LinkExchange. He worked there for a few years, but despite building up the company and running it he didn’t like it. He dreaded going to work. So, he sold the company to Microsoft. With the money he made, Tony invested in a number of companies. One of those companies was Zappos, and he’s been working there ever since.
Because of his experience with LinkExchange, Tony wanted to do make sure the culture was good at Zappos. He invests into it. (So much so that when Amazon purchased Zappos last year, it was written into the deal that Zappos would keep its work culture after the acquisition.) Tony also stresses investing into customer experience instead of marketing. He wants Zappos to have the best customer service and experience.
  • What do customers expect? What do they actually experience? What emotion do customers feel? What stories do they tell friends? How can culture create more stories and memories?
  • The telephone is one of the best branding experiences because you have an individual’s undivided attention. A company’s phone system shouldn’t be about efficiency, but about its brand. Zappos will direct people to competitors, if they don’t have something in stock, to keep its brand. (Their longest phone call? 6 hours.)
  • Always about maximizing customer experience. This means running an inefficient warehouse to maximize it for the customer. The inefficiencies are considered marketing expenses.
  • Number one priority is company culture.
Tony then shared how someone applying to Zappos goes through two hiring processes. They go through the formal interview process, but also go through a hiring process to see if the person will fit into the company’s culture. They will put an applicant through five weeks of training where they are immersed in the company’s culture. This means working the warehouse, handling customer service phone calls.
During the training, Zappos will offer to pay the applicant to leave. They’ll pay for their time in training, and an additional $2000. The thinking is, Zappos wants people who are passionate to work there. They just don’t want people who are in it for a paycheck. (No one takes the offer anymore to leave during training.)
Another integral part of their culture is Twitter. Everyone working at Zappos is trained in how to use Twitter. They believe it helps build the culture at Zappos. The guidelines to employees? Be real and use your best judgment.
  • Three C’s: Clothing, Customer Service and Culture.
  • When people get a delivery from Zappos, many consider it happiness in a box.
Strong culture makes a great company. Don’t make core values a meaningless plaque. Zappos has ten core values, and they are always present to the employees and customers. If you go to the Zappos web site, you’ll come across the values. The hardest value to sometimes gauge in an applicant is #10, “Be humble”. They don’t want arrogant employees, and they don’t make compromises. It doesn’t matter what value a particular employee will add to their company if it takes away from the company’s culture. The added value is lost by the culture being compromised and lost. When applicant comes in to interview, they’ll send a car to pick them up. How they treat the driver factors into the interview.
  • Create fun and a little weirdness. Everyone has their own quirks. Zappos wants those personalities to shine through.
  • Be adventurous, creative and open-minded.
  • Commit to transparency. It builds trust with customers and employees. Be real, you have nothing to fear. (When people take a tour of Zappos they can talk with any employee.)
  • They encourage people to read the books Good to Great and Tribal Leadership.
  • “That’s great, but it would never work at my company”. Whatever. Adpot a culture and values, and stick with it.
  • When it comes to vision, whatever you’re thinking think bigger. Does the vision have meaning? Chase the vision, not the money.
  • The Zappos culture and brand has evolved since its inception. It hasn’t stayed stagnant.
Tony ended this segment of his presentation with a few questions.
  • Where does the story begin?
  • Where does the story end?
  • How do you reinforce the good memories?
  • What were the emotions, positive and negative?
  • How can you create more stories and memories?
Tony did some Q&A, and then he talked briefly about his upcoming book, Delivering Happiness.
There are three types of happiness.
  1. Rockstar: It’s fleeting. People pursue pleasure and keep chasing the next high.
  2. Flow: A person is engaged and time flies. (Like when an athlete goes “into the zone”.)
  3. Meaning/Higher Purpose: Being part of something bigger than yourself. This happiness is lasting.
Tony then said if you ask someone what their goal is life, follow-up their answer with “why”. If you keep drilling-down you’ll eventually get to an answer that is a variant of “happiness”. Do the shortcut to happiness and be a part of something bigger than yourself.

Tony wrapped up, and also received a standing ovation from the crowd. (Scott Harrison being the other speaker to receive a standing ovation.)

He then gave everyone in attendance a free advanced copy of Delivering Happiness. If you wanted a signed copy, you made a $20 donation. All donations went to charity: water. People lined up for a signed copy, just so they could give again to charity: water. A lot of money was raised for charity: water at Big Omaha. Very cool.

4 thoughts on “Big Omaha: Day 3 (Tony Hsieh)

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