The Happiness Culture: Zappos Isn’t a Company—it’s a way of life

There’s a good chance you’re already familiar with Zappos—that certain online retailer you’ve probably drained hours on while sifting through shoes, clothes and other random things.

But to truly know Zappos, you first need to understand its CEO, Tony Hsieh. Under his guidance, Zappos has been operating as a full-blown “Holocracy” since 2015, an experimental way of running a company that gets rid of traditional manager roles and job titles. It’s intended to eliminate bureaucracy and fuel innovation. And it’s helped the $1.2 billion company consistently rank on Fortune’s “100 Best Places to Work” list for seven straight years (among many other things, of course).

But first, let’s back track. For Hsieh, it all starts with LinkExchange, an Internet advertising cooperative he founded. He sold his company to Microsoft in 1998 for $265 million—not because he wanted the money, but because he disliked going to work for his own company.

“The company culture ended up going downhill, and it ended up being not a fun place to work anymore. As the company grew and we started hiring more and more employees, we realized that not everybody we hired was good for our culture,” Hsieh told the Chicago Tribune. “By the time we got to 100 people, I, myself, was dreading getting out of bed in the morning to go to my own company.”

When he started thinking that way, he couldn’t help but wonder how all of his employees felt. At that moment, he vowed that he wouldn’t make that same mistake when taking the reins at online retailer Zappos. That’s why, today, if you ask Hsieh what the top priority at Zappos is, he’ll say its company culture—not customer service.

“Our whole belief is if you get the culture right, then most of the other stuff, like delivering great customer service or building a long-term brand or business, will just be a natural byproduct,” Hsieh said.

Hsieh decided to implement 10 core values that would come to represent Zappos.

Deliver WOW Through Service

Embrace and Drive Change

Create Fun and a Little Weirdness

Be Adventurous, Creative, an Open-Minded

Pursue Growth and Learning

Build Open and Honest Relationships with Communication

Build a Positive Team and Family Spirit

Do More with Less

Be Passionate and Determined

Be Humble

“Researchers found it actually doesn’t matter what your core values are. What matters is that you have them and you align the entire organization around them; and you’re willing to hire and fire people based on having nothing to do with their actual job performance,” Hsieh said.

During the interview process, the human resources department at Zappos does a separate set of interviews purely for core values and culture. And Hsieh admits that they will fire people independently of their actual job performance based on whether they’re living or subscribing to Zappos’ core values.

All new Zappos employees are greeted with a four-week training program. At the end of the first week everyone is offered $2,000 to quit. The offer stands until the end of the fourth week. Zappos wants employees who really want to work for them and no one else.

Everyone is challenged to make at least one improvement, every week, that makes Zappos better reflect its core values. Both personal and professional growth is expected.

Zappos also doesn't hire very experienced workers. They bring almost everyone in at an entry level and grow their talent from within. All employees can access 30 different courses created by Zappos exclusively for their staff.

“What we learned over the years at Zappos is there is a huge, huge difference between motivating and inspiring,” the executive said. “If you can inspire your employees through a vision that has a higher purpose or by having values, then you can actually accomplish so much more, and you don’t really need to worry about the motivation part. It just kind of takes care of itself.”