I rarely read biographies or autobiographies of individuals or groups. This is because I rarely find accounts of success or failure by the people involved, or hired hagiographers, very believable. I usually wait for somebody to tell the story more critically, within a broader context, such as the history of a sector. But I made an exception for Tony Hsieh’s Delivering Happiness for three reasons. First, I wanted to steal concrete ideas from the Zappos playbook about customer-centeredness. Second, I was puzzled by the apparent cultural mismatch in Amazon’s acquisition of Zappos. And finally, I was curious about what a genuinely happiness-centric approach to business looks like. Deconstructing the Zappos story seemed like a good idea. This post is mainly about the last question, as well as some general thoughts about “corporate culture.”
The book is Hsieh’s story. It is also the Zappos story because he clearly personifies the Zappos DNA. So let’s understand it on those terms.
Hsieh clearly believes deeply in the idea of happiness. It pervades the book, in completely genuine ways. There is a whole section with uncritical adulation of the Positive Psychology movement that is innocent of any skepticism (for skepticism, see my review of Barbara Ehrenreich’s Bright-Sided). He also apparently believes that everybody fundamentally wants happiness:
…if you keep asking yourself “Why?” enough times, you’ll find yourself arriving at the same answer that most people do when they repeatedly ask themselves why they are doing what they are doing: They believe that whatever they are pursuing in life will ultimately make them happier. In the end, it turns out that we’re all taking different paths in pursuit of the same goal: happiness.
This incidentally, is not universally true. When I play this game, my final answer always tends to be “so I understand the world better, even if it makes me miserable.” I suspect I am not the only one whose answers converge to something other than “to be happier.” There have to be species besides hedonists and masochists.
Hsieh clearly walks the talk. There is an extended discussion of his involvement in the rave scene and what he learned from raves about feeling connected to something larger than yourself. It was news to me that the rave movement is about more than dancing Matrix style, and actually has values: PLURR: peace, love, unity, respect, responsibility. What his board called “Tony’s social experiments” seem to have been genuine attempts to create a happiness culture based on his rave experiences.
Here’s a quick précis:
The book starts with early-childhood entrepreneurial experiences, winds its way through a pizza business at Harvard and his first success with LinkExchange, which he and his partners sold to Microsoft. Though that was a financial windfall, he views that episode as a failure because he failed to recognize the importance of culture.
After a description of the brief, mandatory interlude of Web-millionaire poker-playing (there’s quite a good bit on poker-as-metaphor-for-business), we get to the main story: Zappos. Starting as an investor and then getting involved in running the business and taking on the CEO role, Hsieh navigated layoffs, liquidated nearly all his wealth during a death-and-resurrection period, while waiting for a line of credit from Wells Fargo, and led Zappos on to success. The last part of the book is an argument-by-example, rather than a story, about why culture matters, and why happiness-centric culture is the reason behind Zappos’ success. His own narrative is interspersed with supporting bits authored by others (they are selected to elaborate on, or illustrate his story, not to provide alternative readings of the story itself).
Hsieh comes across as somebody whose life centers around relationships, friendships, group experiences and bet-the-farm gambling instincts. This is a fun-loving guy who likes manufacturing realities/experiences for his own and others’ entertainment. His interest, evident even in his early childhood stories, in magic tricks, practical jokes and party-planning, all obviously helped shape his character. Those formative experiences are clearly part of the reason why he was able to build an entire company on the strength of its obsessively-attentive customer experience operations.
He is also clearly an extremely smart technocrat, with excellent strategic, financial and technological instincts. But he also comes across as extraordinarily polyannish, with an almost child-like simplicity when it comes to other people, relationships, values and culture. The biblical phrase and a child shall lead them (Isaiah 11:6) kept popping into my head.
Putting the book on the couch for a moment, the story is almost a textbook example of the sort of story that successful, generative adults (and by extension, corporations) tend to tell about their lives, in the sense of Dan McAdams’ The Redemptive Self, which I have cited before. And it suffers from all the flaws of that narrative template. For example, there is no acknowledgement or examination of the dark side of experience-manufacturing as a strength: it is also a capacity for deceit.
The way he tells the story, there is no sociopath side to his character, and no sociopaths anywhere around him. Zappos was apparently entirely built by Wonderful Human Beings. I find that hard to believe, but if it is true, then Zappos may be the case study that falsifies all my theories of management. I’ll wait for a few more versions of the story to emerge before I make any revisions though.
Like most autobiographical accounts of events, the book does not entertain the thought that others might read the events differently. It is written with the unexamined assumption that privileged access to the facts leads naturally to the best account of those facts, so no attempt is made to separate data/facts from conclusions. The book even begins with a disarming acknowledgement:
“Finally…you’ll notice some sentences that aren’t the best examples of English grammar… I wrote this book without the use of a ghostwriter. I’m not a professional writer, and in many cases, I purposely chose to do things that would probably make my high school English teachers cringe, such as ending a sentence with a preposition. I did that partly because I wanted the writing to reflect how I would normally talk, and partly just to annoy all my high school English teachers (who I appreciate dearly).
It is interesting that he believes “professional” writing is about grammar and prepositions rather than about maintaining a certain critical detachment towards your own thoughts. It shows. Charming and endearing though the sentiment is, I immediately saw it as a red flag. To get any value out of the book, I’d have to treat it as the transcript of a psychoanalysis session, rather than a trustworthy and critically self-aware text.
That said, Hsieh is clearly too smart to offer an obviously deluded or flawed account of the events, and is also genuinely selfless enough to not turn the story into a self-serving one. He has made a good case, and he believes in it.
The question is, should you? Or is it too good to be true?
The Zappos Corporate Personality
It certainly isn’t too good to be true in the sense of presenting a false picture of a happy company. From the contributions by others in the company, it is clear that most of the employees are actually significantly happier than employees of other companies.
The Zappos corporate personality appears to be an extension of his own, and this is an outcome of deliberate design. Through the friendship and partnership choices that fueled his entrepreneurial career, as well as the hiring practices he put in place, Hsieh was able to turn his social environment into a projection of his own personality (the social synchrony aspect of the rave culture is not a peripheral element in this story; it is the main point). Everything I’ve said about how he comes across appears to be true of the company as well. The following quotes are particularly revealing:
“Although it seems obvious in retrospect, probably the biggest benefit of moving to Vegas was that nobody had any friends outside of Zappos, so we were all sort of forced to hang out with each other outside the office.”
“I thought about all the employees I wanted to clone because they represented the Zappos culture well, and tried to figure out what values they personified. I also thought all the employees and ex-employees who were not culture fits, and tried to figure out where there was a values-disconnect.”
“There are a lot of experienced, smart, and talented people…but a lot of them are also really egotistical, so we end up not hiring them.”
“The best team members have a positive influence on one another and everyone they encounter. They strive to eliminate any kind of cynicism and negative interactions. Instead, the best team members are those that strive to create harmony with each other and whoever else they interact with.”
Now I am trying my best to be fair here. I am not trying to use selected out-of-context quotes to misrepresent the Zappos culture. I think this is how they actually view themselves, and want their culture presented. This is textbook bright-sidedness/positive psychology. They seem like genuinely fun and nice people (the book makes them sound close to Amway/cult-like, but I don’t think they are that bad; I think I’d like them socially even if I couldn’t dream of working with them). As a company, like Hsieh himself, they walk the happiness talk.
They actually have a “culture fit” HR interview designed to keep things this way. It is clearly a test designed to keep, well, jerks like me out.
If you’ve been reading this site for any length of time, especially my Organization Man series, these quotes should be huge red flags. They are the classic signs of groupthink, assumed consensus, suppression of real dissent and a determined elevation of harmony-seeking over truth-seeking. I doubt anyone at Zappos would agree with this harsh reading, but the conclusion is inescapable. I would be very surprised if anyone at Zappos has read The Organization Man. If the book is in their famous library, and checked out more than three times by people who are still there, I will be guilty of having seriously misjudged them. The library seems to be dominated by books like Fred Factor and Fish, in addition to the usual Seligman-gang Happiness tomes and Tribal Leadership (I haven’t read this one).
What is more, not only is this the culture dominant, it is viewed as having no costs, and as the primary cause of Zappos’ success. Both are deeply dangerous thoughts. The latter particularly so. As I noted in my highlights post on Gareth Morgan’s Images of Organization, the “Organization as a Cultural System” is just one of at least 8 major metaphors of organization. Each of the other 7 will yield an alternative account and causal hypothesis of the Zappos story.
The companies of the 50s with a similar “happiness” culture, that Whyte analyzed in the Organization Man, hit a reality shock starting in the late 70s. What killed the culture back then was the end of the happy, easy-growth era, and the emergence of real and vicious competition as markets matured and stagnated across the board. A new, much harsher culture appeared overnight all over the economy, much better adapted to the new realities. If I am right, and Zappos is a case of déjà vu all over again, they are enjoying the benefits of being the market creator in the growing online-shoes business. If a credible competitor ever emerges, this culture will be in serious trouble. Going by historic time constants in these matters, we can expect that around 2020. Generally, major economic sectors, as they near maturity, attract at least one major challenger which helps create the mature, zero-sum market with razor-thin margins. It remains to be seen whether the Internet-fueled growth era will obey this law.
But we’re wandering. Let’s get back to Zappos, and the three questions that made me read this book.
Zappos as a Customer Experience Role Model
As a playbook to steal from, in building customer-centric organizations, the book succeeds brilliantly, and I got more than my money’s worth in terms of the ideas it gave me for my own projects. I won’t attempt to summarize or distill the ideas.
Enough said on that. If customer experience is a problem for you, read the book. You will learn a lot.
Zappos and Amazon
I am not going to share my conclusions on this subject. For pretty much the first time on ribbonfarm, I am self-censoring my own thoughts because I think they might get me into arguments I don’t care to get into, and offend people I don’t want to offend. I have an answer that satisfies me, and I’ll forgo the value of debate. I think I am starting to get old.
Happiness as a Business Premise
If you’ve been reading ribbonfarm for any length of time, you know that I steer by a truth/happiness yin-yang dichotomy (see my Philosopher’s Abacus post). So my starting position on the “happy company” hypothesis is a skeptical one. I’ve sketched the historical-precedent argument why a happiness-culture may run into trouble with market maturation, but I haven’t provided an analytical argument.
Despite my personal preferences, I don’t think being truth/reality-centered is necessary or a better alternative to “happiness” as a foundational premise. In fact “truth-centeredness” can be a lousy foundational premise, because it can be a centripetal force that tears a company apart, as easily as it can be a cohesive force that keeps it together. Truth informs dismantlement as often as informs mergers (see my Gervais Principle series).
What holds for humans, holds for corporations: beliefs that help you survive and beliefs that are true are not the same thing. The pursuit of knowledge can be detrimental not just to your happiness, but to your survivability as a human being or a corporation. It is a self-indulgent luxury like any other life value.
With my own biases out of the way, let’s talk happiness. While Hsieh is very careful to point out that all corporate cultures are different, you get the impression that he thinks happiness-maximization ought to be a foundational premise for all cultures (going back to the “we’re all taking different paths in pursuit of the same goal: happiness” quote).
The part of the book where the happiness idea comes through most clearly is in Hsieh’s discussion of how he came up with the list of core values for the company. I was aghast at how seriously they seem to take a subject that is normally just an exercise in cynical perception-management in other companies. It was a bottom-up process based on what employees thought were the core values. The 37 initial bottom-up value suggestions were eventually edited and distilled down to 10. The actual lists are revealing enough that I am going to reproduce them:
The Bottom-Up List
Culture is everything, WOW/Service, Trust and faith, Idealism, Company Growth, Long-term, Personal growth and stretching, Achieving the impossible, Team, Family/relationships, Emotional connections, Developing your gut, Empowerment, Ownership, Taking initiative, Doing whatever it takes, Not being afraid to make sacrifices, Unconventional, Bottom-up meets top-down, Partnerships, Listening, Overcommunicate, Operational Excellence, Built for change, Continuous incremental improvement, Innovation, WOM [Word of Mouth], Lucky, Passion and positivity, Personality, Openness and honesty, Fun, Inspirational, A little weird, Willing to laugh at ourselves, Quiet confidence and respect.
The Final List
Deliver WOW through service, Embrace and drive change, Create fun and a little weirdness, Be adventurous, creative and open-minded, Pursue growth and learning, Build open and honest relationships with communication, Build a positive team with family spirit, Do more with less, Be passionate and determined, Be humble.
(apologies for the paragraph style; a bullet-list would have made this post a mile long).
I spent quite a lot of time deconstructing these lists, but I won’t bore you with the details. I concluded that the final list is an accurate distillation/summary of the bottom-up list (not surprising given the cloning-culture; the process is in a sense a validation that Hsieh’s strategy of building the company in his own image actually worked. Unless there were closet cultural skeptics who kept their mouths shut). But there are a couple of interesting highlights:
Lucky didn’t make the cut. Somebody clearly thought that luck (of the ‘being in the right place at the right time’ variety) had something to do with the story. I think sheer dumb luck has something to do with every story. There is only so much you can do to make your own luck and do the whole “fortune favors the prepared mind” thing. But as critics of positive psychology like Ehrenreich and McAdams point out, downplaying dumb luck is one of the first moves in going bright-sided.
I initially thought humble meant being existentially humble in the face of all the randomness and arbitrariness of the universe. It is the flip-side of acknowledging “lucky.” But apparently, Zappos idea of humble is the more basic interpersonal “don’t brag” kind, designed to cut egotistical jerks down to size (assuming the recruitment process accidentally let them through).
“Open and honest relationships” doesn’t seem to mean trying hard to see the truth and then telling it like you see it, when necessary. At Zappos, it seems to mean being open and honest about what you really feel. This is a share-your-feelings therapeutic sort of openness. Another reason low-reactor jerks like me, who rarely share feelings, wouldn’t make it past the front door. Again, to be clear, I am not saying this is a bad thing. It is what it is, with costs and benefits.
Finally, there’s a lot I agree with on both lists. Values I share. But it is the ones that I don’t share that ultimately matter. Cultural fit is a matter of complete consensus, not sufficient alignment.
But the biggest surprise to me is that nowhere, not even in the original version, is there any kind of truth-seeking value. I thought I’d see at least one sentiment along the lines of “we don’t hide from reality” or “we admit when we are wrong.” Even though such behaviors are part of the story (such as when Tony and his team admitted that drop-shipping as a business model wasn’t working and that they needed to shift to an inventory model), reality-centeredness isn’t articulated. As I already said, I don’t think truth/reality centeredness is necessary or always useful. But you still expect lip service at least. Again, no judgment, just a note of surprise for me. I am not about to argue with success.
Analyzing the DNA
Is happiness-centeredness as modeled by Zappos necessary under some conditions? History suggests that perhaps early-stage growth companies that are creating a new sector need to be happiness-centric. But I don’t think this is true. I recently reviewed The Lords of Strategy, and it is clear that at BCG, the growth company that created the sector, the governing value was some version of truth-centeredness.
Perhaps happiness-centeredness is necessary for growing market-creating companies that are based on a strong sales culture? This, I think, may be true. I’ve seen other examples that fit the mould (including, though I don’t want to overemphasize these examples, Amway and Saturn).
Is happiness-centeredness irrelevant to success? Are Hsieh and Zappos making a huge, collective correlation-to-causation leap of faith? If we look through non-cultural organizational metaphors, will we find other, more compelling explanations? I don’t know, but when the Zappos story matures, and more versions of the story are available, this would be an interesting PhD thesis question for some student of organizational behavior in 2022 to tackle.
The Broader Corporate Culture Issue
The Zappos story is one of the many things making “corporate culture” a hot topic. I think the topic has gained currency because as “social” enters the brand narrative of companies, the internal culture becomes part of the external brand (Hsieh says as much). With that in mind, a couple of interesting items you should look at:
- Google, I think, is another happiness-centric company, and its culture has been in the news. I made a trail about it, Google Culture: the Good, the Bad and the Ugly, with what I could find. The recent Pandas vs. Lobster post and an older New Yorker feature are particularly useful.
- Dan Shapiro’s post, Your Company Culture is a Meaningless Platitude, also a response to Hsieh’s book, is a must-read.
- I haven’t synthesized my thoughts, but a while ago, I wrote this post on the E 2.0 blog: There is No Such Thing as Culture Change