Unless you’ve been holed up in a cave for the past few years, you’ve probably had some kind of brush with a quirky company called Zappos. You may be one of the millions of fanatically loyal customers who buy shoes from them over and over again. Or you may be a salivating investor who’s watched the company skyrocket from zero to over $1 billion in sales in less than 10 years. Or you may be like me – one of the lucky few who’ve had the rare opportunity to visit the corporate headquarters in Las Vegas and witness their wacky and wildly successful culture.

Whatever your experience with Zappos, the company is the real deal – a living tribute to the title of CEO Tony Hseih’s new book,“Delivering Happiness: A Path to Passion, Profits and Purpose.” During the past couples of years, I’ve read quite a bit about the company and watched reports and interviews with Hseih (pronounced shay) on numerous TV programs. But none of that quite prepared me for actually being there and seeing the business in action.

Why this Whimsical Workplace Works
Before I even entered the building, several “Zapponians” greeted our group of visitors outside with the kind of upbeat playfulness you’d only expect at someplace like Disneyland. (BTW, I’ve been to Disneyland, and they could learn a thing or two from Zappos).

When you get inside, you discover that the initial encounter with the greeters is just a glimpse of the craziness you find in every cubicle and corner of the business. People are wearing silly hats and glasses … blowing horns and whistles … playing arcade basketball and competing in pinewood derby races. To the conventional business person, it can seem over the top and a bit off-putting in its cult-like merriment. But if you look closely, you can see something else. Even though employees are marching to their own drumbeat, they’re also working in close synch with one another – and they’re intensely focused and engaged in the work they’re doing.

Despite the legendary tales of the raucous Zappos workplace, it’s not the wackiness that makes it work. It’s more about the absolute clarity and purpose in everything every person does, all being driven by one prevailing principle with two core tenets: create a work environment where employees have control and love their work – and you’ll produce a company culture where customers love doing business.

A classic example of how those two priorities come together is the company’s policy on handling customers. Employees have the freedom to do whatever they feel it will take to meet the customer’s needs – i.e., to make the customer HAPPY.  What’s more, there’s no limit on how much time a call center employee should spend on the phone with each customer.  Some employees have spent literally hours on a single call – all to fulfill their guiding principle that links employee happiness with customer happiness.

You Can’t Fake Culture
It’s easy and appealing to subscribe to that kind of philosophy – and lots of organizations claim to live by it. But for most, it’s a shallow charade that shows up like a short-term promotional event. At Zappos, it’s the true essence and heartbeat of everything they do – and it’s captured wonderfully in the company’s annual “Culture Book.” It’s their traditional collection of stories gathered each year from employees, customers and vendors about their experiences with the company. In the 300-page 2010 edition, Hsieh makes a point that illustrates the emphasis they place on culture as a conscious business strategy. The company is very clear about its brand, and as Hseih puts it, “The brand is simply a lagging indicator of the culture.”

The corollary, of course, is that the culture is a leading indicator of the brand. As quality improvement experts point out, it’s hard to control lagging indicators. They’re the outcomes that result from the actions you take – from the leading indicators you CAN control. Most organizations, though, are so fixated on outcomes and results that they fail to take the same disciplined approach in managing the indicators that lead to winning the game – like culture.

The math is simple. Employee happiness by itself doesn’t automatically equal business success. But it clearly adds up to a better customer experience – and as Zappos has proven, it also will put big smiles on the faces of happy investors.

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