OpenView Blog

Sign-up for our Free Weekly Newsletter to get the best news ideas for building technology companies

Sign-up for our Free Weekly Newsletter to get the best news ideas for building technology companies

Zappos Company Culture: Shining Example or Too Much of a Good Thing?

Sure, it’s received nearly universal high marks, but does anyone else think Zappos company culture is over the top?

When most people first hear about Zappos.com’s unique corporate culture they blindly assume it must be magical. After all, everyone says so.

But has anyone else stopped to consider whether Zappos has actually taken things too far and gotten a little carried away with the Kool-Aid in the culture department? What Zappos is trying to achieve is a unique culture where their employees are free to be who they are — that is, so long as who they are correlates with who Zappos wants them to be. In my humble opinion, the online retail giant is actually teetering on the edge of becoming a cult.

(Okay, so in this post I am obviously playing devil’s advocate. But the question does bear asking…)

Let’s step back: If you are unaware of Zappos dedication to company culture, employees abide by the following core values:

1. Deliver WOW Through Service

2. Embrace and Drive Change

3. Create Fun and A Little Weirdness

4. Be Adventurous, Creative, and Open-Minded

5. Pursue Growth and Learning

6. Build Open and Honest Relationships With Communication

7. Build a Positive Team and Family Spirit

8. Do More With Less

9. Be Passionate and Determined

10.Be Humble

 

CEO of Zappos, Tony Hsieh, has been quoted saying that if employees do not fit the corporate culture they are fired (hear it from Hsieh himself on Inc.com). Hmm. It seems to me this is not being “Open-Minded,” as the values state.

It is important to have diversity within any organization. Diversity breeds new ideas, broadens people’s way of thinking, and moves a company forward. Hiring people who assimilate easily and who do not challenge the status quo for fear of losing their jobs is not diversity. And it certainly does not uphold core value #2, “Embrace and Drive Change.”

Should There Be a Limit to Interviewing and Reviewing Based on Cultural Fit?

Zappos company cultureThe process of interviewing at Zappos requires one interview with the hiring manager to assess skills and one interview to assess cultural fit. To skeptics, this may sound an awful lot like those mean high school girls who sit in the cafeteria and determine whether you are cool enough to sit with them.

I wonder how feedback goes when someone does not meet the threshold for cultural fit at Zappos, “Hey, sorry to tell you this Bob, but we don’t think you would create enough fun and weirdness here. Please apply again when you have kicked your weirdness up a notch.”

Even reviews at Zappos are based 50% on how the employee upholds the core culture — yep, that’s 50%. This means that with the remaining 50% Zappos is assessing how the employee actually did his or her job. So, you may be mediocre at best in your job, but if you are building a positive team and family spirit (see core value #7) then you are okay by Zappos.

At some point, a company like Zappos that is so focused on company culture has to plateau in terms of talent acquisition. At some point, you run out of the best and the brightest talent who also want to be held to a lengthy code of how to abide by their companies.

Yes, it is important to have a positive company culture, but taking it too far to the extreme can be detrimental and scare away the exact people you need to help you get ahead.

 

What do you think of the Zappos company culture? Is it over the top or is Tony Hsieh on to something?

Lindsey Gurian is a Senior Talent Specialist responsible for recruiting initiatives at both the firm and
its portfolio companies. Connect with her on Twitter @lindseygurian.

  • http://www.kranzcom.com Jonathan Kranz

    Good for you Lindsey for calling this one out. I mean, if you’re an employee or would-be employee, what on earth do you do with the obligation to “create fun and a little weirdness” or “be adventurous, creative and open-minded”? These statements say less about values and more about vanity.

  • CliffElam

    I suspect this is a very shrewd way to dramatically cut down on churn at the bottom of the salary pyramid – where it is often most painful to recruit, returns the least for training $, and affects customer retention the most.

    I can assure you that the CFO is not hiring AP clerks for “weirdness.”

    _XC

    • http://www.philsimon.com/ Phil Simon

      Very true. Quirky accountants might not be such a good thing.

  • marty

    Performance and Cultural fit are not interchangeable.

    Cultural Fit is overrated. Largely a term invented by people who cannot explain why they hire poor performers. In the sales world, the only ‘fit’ that counts is fitting into the customer culture (and getting the $$$).

    What I’m hearing is an accounting term – FIFO, standing for Fit In or F___ Off. A losing strategy if ever there was one. It starts to sound like testing to see if one is a good Nazi or a ‘pure’ Aryan. An oxymoron if ever there was one.

    Imagine career progression there. Little rats sitting in every corner parsing every word for signs of a cultural mis-fit. A little rat ship, full of Baird men, lining up to prove their worth!

  • http://www.verticalelevation.com/ Carol Schultz

    Nice post Lindsey. I’ve been saying this for years. The problem is there’s no balance in their process. They are hiring mostly low wage workers who, traditionally, have very high turnover rates. They are attempting to make a boring job fun. Yeah! This may work in this type of environment, but would probably never work with high earners and quota carrying folks.

    Hsieh is being held up as a genius and the nation of sheep is following him. Skills and abilities to do a job are about 50% and more esoteric qualities like personality, culture fit, drivers, motivators, etc are the other about 50%. These numbers move depending on where a company, team, employee, manager is at any particular time.

    I think the point is that companies need to carefully align at the executive level first so that they are rowing together toward the destination. Next, they need to look at the individuals within the organization to determine what’s needed from a performance standpoint to successfully to a job, then build their talent strategy.

  • http://www.philsimon.com/ Phil Simon

    Not to be contrarian, but it’s Tony’s candy store, no? If it’s broke, then he’d fix it, right?

  • http://www.cazoomi.com/ Clint Wilson

    Good write-up and seems cults are the same world-wide:)

    ~Clint
    @cazoomi

  • http://www.markcenicola.com/ Mark A. Cenicola

    Groupthink culture may indeed lead to a ROI plateau at some point. When that happens, you need diversity so you don’t end up with an inability to innovate. Innovation comes from unique ideas, and challenges to the status quo.

    However, I believe Zappos’s culture is in for a significant change with the relocation of it’s entire staff from their Henderson, NV office to downtown Las Vegas. You can’t underestimate the effect a significant move like this will have on its culture.

    We experienced this phenomenon, albeit at a much smaller level, when we moved into a new headquarters after being at the previous location for more than 5 years. Your culture changes while in transition and a new culture may develop as everyone adapts to a new environment. Environment plays a big part of a company’s culture, and can change the way people behave.

  • SMTaylor

    I think there is nothing wrong with evaluating a potential employee’s fit with the company as well as their job skills. I’m sure companies that value creativity highly like Ideo look for certain characteristics in their employees as well. Admittedly Zappos is nothing like Ideo but apparently their corporate culture works.

    I think the accusations of a “cult-like” atmosphere are probably being made by people who don’t like the feel of the corporate culture which is fine – not everyone fits into every work place. Zappos seems to value a certain mindset that seems to rub a number of people the wrong way (including I think a number of commenters here.) Is there any evidence of purges of people for thinking wrong like Marty seems to envision? I haven’t seen any.

    At the end of the day though while the Zappos model certainly wouldn’t work for every business sector or even every type of retail company but if they get results and keep their employees happy with their fun and weirdness, more power to them.

  • maethlin

    I’m not really seeing it. Maybe I’m missing some general knowledge about zappos (like it’s numbers are tanking or it’s known to be falling apart internally) but the article doesn’t really offer a shred of proof that zappos’ approach is problematic.

    Not to say that it’s perfect – honestly I have no idea, I know some people who have bought their shoes and really liked the service and I know the company generally has done well in the past, but I don’t know how they are doing now.

    But I might be missing the point of the article here – all I see is labelling it as a cult, suggesting it *might* be overboard for some vague reasons (50% consideration for culture doesn’t seem like it could be considered arbitrarily bad unless there is some data on this?). Then at the end there’s a definitive statement about taking things too far without defining what too far is.

  • http://twitter.com/veena_srinath veena_srinath

    Anything carried to the extreme is always bad, and Mr. Tony has to understand, these are good values to live by, but each of them can be interpreted totally differently by different people, so it still leads to employee VS manager conflicts that are “Your opinion” Vs “Mine” …and no prizes for guessing who always wins (the senior guy of course), so really, nothing has changed.
    Guidelines are good, 360 degree feed-backs are good, democracy and meritocracy are good, but regimentation of any of these- not so good.

  • MattB

    Disney does the same thing all the way down to their park employees that collect the garbage. Last i checked they have been around a long time and are widely viewed as successful. It may sound harsh, but if you do not fit the culture, it is going to be hard to make a successful go at any job. Fitting the culture does not mean that all employees agree on everything, or that you cannot challenge each other. You cannot take any individual value and make an assumption based on that, it must be looked at as a whole. If you fit the culture, the rest can be trained. If you don’t fit the culture, but you are amazing at your job, its not going to work. The values in most cultures are inherent to people and cannot be learned. Job skills on the other hand can be taught. If you are working somewhere and you do not like it, find another job and quit. A company that focuses on culture has the ability to build and maintain a team that is as close as you can get to family. I don’t know many families that are all the same, in fact its quite the oppisite. That is the kind of place that i would want to work at.

  • KevinCrenshaw

    Drive change? Deliver WOW through service? Pursue growth and learning? Build a positive team? No danger of groupthink with *that* culture. Sign me up. ;-)

  • Howdy Doody

    Culture is a means to an end: long term profitability. Leaders need to create and manage a culture that is appropriate for their industry and the target customers. They must first have a very deep understanding of both before building the “culture program”.

  • Steve

    I would be intimidated to work at Zappos. Hiring for cultural fit is natural, but Tony is going overboard with it. Zappos is only breaking through 1 billion in sales after over 10 years, while Google was already a billionaire after less than 10 years. Zappos overkill will one day backfire itself from those who were not cool or hip enough to join. Zappos is beautifulpeople.com with a shoes store front.

  • http://minimees4.com/ Rose Bush

    Great article Lindsey, though I have a totally different view from most. I personally think the reaction to Hsieh’s comments have been amplified and come from an emotional POV rather than a business one. When I read the quote, I hear him saying ‘we’re raising the bar. Customer first so let’s run the business like we’re all customers’. And now when I read the “Core” values,(some of which I’m certain are apart of other corporations), I hear, ‘excellence, integrity, engagement & yes diversity’. Having said that, I think ones reaction depends on the lens from which they’re viewing. Half full or half empty. Oh and I am a shoe loving Zappos customer(no stock, though I should). Orders, returns, refunds, doesn’t matter, never a problem. Their customer service is top-notch in my book!

    • Lindsey Gurian

      Thank you for the response, Rose.

      I agree that Hsieh’s comments are more emotional as this is “his” company so it is more difficult to have a detached approach to hiring.

      I am also a shoe- loving Zappos customer!