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ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

Zappos as a High-Performing Organization


By: Ryan MacCormack, Shawn McCurley, Konni Mergner, Kelly Nevins,
Joan Romano, John Sardelli, and Derek Justice
Roger Williams University

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

Abstract
Zappos is a company like no other. Their corporate culture is legendary and is the
bedrock of their business. With low turnover and a stringent hiring policy, they create loyalty
among their employees through rigorous training. With a firm commitment to their team, Zappos
has consistently hit their goals and lives their ten core values with fervor and passion. Yet, does
this make Zappos a high-performing organization? In this paper, we will explore Zappos
structure, culture, performance, strengths and weaknesses as we analyze whether they fit the
model of a company that succeeds by applying principles put forth in Ken Blanchards Leading
at a Higher Level and 144 Ways to Walk the Talk by Eric Harvey and Alexander Lucia.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

TABLE OF CONTENTS
Chapter

Page

What is a High Performing Organization?

The Power of Vision

12

Serving Customers at a Higher Level

16

Self- Leadership

22

Coaching

27

Zappos Leadership: Developing a Point of View

32

Culture

36

Conclusion

43

Bibliography

44

Appendix: Personal Reflections (Alpha Order)

47

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

What is a High-Performance Organization?


By definition, a high-performance organization is a company that recognizes that their
employees and teams are critical to their success. These companies provide their staff with the
tools and technology they need for success and base their goals and objectives on learning and
growth. This open, inclusive atmosphere tends to help these organizations have low turnover and
high employee happiness (Gossel, November). Author Ken Blanchard distills the essence of
high-performances organizations into a triple bottom line where a company focuses on being
the provider, employer, and investment of choice (Blanchard, 2010). By serving others at peak
levels, high-performing companies realize a greater level of profit and outperform their
competitors.
All companies undoubtedly want to be able to declare they are high-performing, and
many do. But are they? Companies like Southwest, Wal-Mart, and Google are often cited as
examples of high-performing organizations, but closer inspection shows flaws that preclude them
from being considered in this category. For example, Southwest has ongoing and sometimes
quite serious, customer service issues that reveal deep prejudices within the organization and
leads to many not considering them a provider of choice for customers. At Wal-Mart, class
action lawsuits have repeatedly revealed a pervasive and illegal pattern of poor treatment of
employees so they cannot fill the criteria to be an employer of choice. Finally, Google has been
exposed numerous times for spying on their customers and not revealing
data collection and storage practices. Google, like Southwest, is therefore excluded as a provider
of choice label for customers. For investors in social responsibility, all three would be viewed
unfavorably.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

Fortunately, there are companies out there that fit the criteria and Zappos, an online shoe and
apparel retailer, is one of them.

What is a Zappos, Anyway?


Zappos (a variation of the Spanish word zapotas which means shoes) was founded in
1999 by Nick Swinmurn. The main focus was strictly selling shoes online. It was a new market
idea for a $40B industry that had little to no revenue through web business at the time. As a
result, Swinmurn was turned down by almost every venture capital firm he approached. They
saw no profitability in selling shoes online, assuming no one would buy shoes this way because
they could not try them on before purchase (Gabbay, September). The point those companies
missed which current Zappos CEO Tony Hsieh did not, was that $2B of the shoe market was
already being purchased through catalogues. Hsieh, a recent millionaire due to his sale of
LinkExchange to Microsoft for $265 million, was privately funding web start-ups through his
company Venture Frogs, LLC. At the time, he had approximately 20 other companies he was
investing in, but he was intrigued by Swinmurns idea, he invested $500,000 in the startup online
retailer. Hsieh ultimately believed so much in the concept of instead providing the ultimate
customer experience, that he came on board as Co-CEO.
Since 1999, Zappos went from a company with zero profits and a goal to be a $1B in 10
years; to being sold to Amazon.com for $1.2B in 2009. With 50 percent of their customer base
comprising of repeat customers and another 20 percent coming as referrals from existing
customers, Zappos has built a near fanatical following that is almost as fervent as Zappos own
employees. One would think that in selling the company, Hsieh would have taken the big payday
and walked, yet the terms of the deal were structured in a way that the culture of Zappos stayed

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

intact and their customer service remained untouched. From an investor standpoint, all Zappos
stock was exchanged for Amazon stock of equal value. This is just the latest in a 10 year
example of how to walk the talk of being a high-performance organization. Although Hsieh had
the opportunity to take the money and run, he stayed true to the triple bottom line and stayed
the course on being the employer, provider, and investor of choice.

Zappos as Provider of Choice


Hsieh and Swinmurn looked beyond their plan on paper to grow Zappos and recognized
they needed to step beyond to capture the hearts and minds of their customers. To do that, they
saw they needed to make customer service 100 percent accessible and give customers what they
asked for, not just what Zappos thought they should have. Zappos set about planning how they
would become the provider of choice for their customers.
On September 24, 2009, Tony Hsieh gave a presentation at the Inc. 500 | 5000
Conference outlining how Zappos separated themselves from the competition by committing to
be Powered by Service. Hsieh explained that Zappos provides the best online shopping
experience possible (Hsieh, 2009). At the core is a 365-day return policy and fast, usually free
shipping. At first, the company would personally e-mail repeat customers to let them know of the
free upgrade in shipping to next day air. However, they continued to expand this feature with a
goal to give this service to every customer.
All returns are free of charge. In an age when most companies are loathe to put their 800
number on their web site, Zappos not only offers 24/7 support via phone, they provide round the
clock support via online chat too. Hsieh believes that displaying your contact information on
every landing page is one of the best ways to learn from and connect with customers. In this way

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

the company Delivers what the customer actually wants rather than what you think they ought
to have. (Harvey and Lucia). To ensure that customer service is consistent and in line with the
companys core values, Zappos does not farm out their service calls overseas. They keep
everything centralized in their new headquarters in Las Vegas, NV.
These are just a few of the ways that Zappos is exceeding customer expectations and their
loyalty in providing top service is rewarded by customers continually coming back to them to
buy again and again One example of Zappos commitment to providing a high level of customer
service was tested when a customer was concerned at having not received her order on time. She
called Zappos and realized that she had given the wrong shipping address. Most companies
would have charged for re-pulling the order, the new merchandise, and shipping it, especially
because it was due to customer error. Not Zappos. Hsieh and his team made sure the order was
filled, free of charge, and shipped it overnight to the correct address, again, at no cost.
The company also provides their customers with a free referral service on merchandise if
needed. If a customer is looking for the lowest price on a product and Zappos cant match it, they
will point the customers to a competitors website that offers better pricing. This shows that they
are conscious of their competitors and regardless if they make the sale or not, they want to give
the customer the best shopping experience possible (Ueng, October). Through consistently
supplying excellent customer support, responding to customer feedback, and building new ways
to better serve customers, Zappos has indeed carved out a niche for themselves as a provider of
choice for customers and therefore fulfills the first part of Blanchards triple bottom line.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

Zappos as Employer of Choice


At the outset, Hsieh and the Zappos team recognized that if you treat your employees
well, they treat the customers well. Many companies fail to realize there is not a distinction
between a happy employee and a happy customer. If the employee is happy, the customer is
happy. Zappos understand this and strives to create a work atmosphere and benefit package that
not only attracts top talent, but also retains thema hallmark of a high-performing organization.
The company is very selective about hiring. If they find a candidate encompasses all the Zappos
traits, but one; they will not hire the applicant. (Zappos, 2010).
While many companies have a list of values, all too often, they do not act on them.
Zappos is the exact opposite and a quick web search on the company finds thousands of links
that show video of their work environment. Time after time, you will see a fun, happy
atmosphere that offers free vending machine treats, themed offices filled with trees and plants to
resemble a jungle, and recently has added an on staff life coach to help improve employee
happiness (Kjerulf, July). When the company was faced with a board who said, think profits,
who cares if employees are happy, Hsieh stuck to his guns, stayed true to company values, and
gave equal emphasis to employee happiness. This is just one of the reasons why Zappos has been
consistently ranked as a best places to work since it opened its doors. As if to prove this point,
CNN Money just released 100 best companies to work for in the US and Zappos ranks 6. Talk
about an employer of choice! Zappos has defiantly created a motivating environment and
organizational structure that fits in the equation of a high performance organization.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

Zappos as an Investor of Choice


The last part of a high performance organization equation is investment of choice.
Growing a company requires some type of financial backing. In order to attract investors, they
must believe their investment is going to give them a return. Simply put, you have to make them
believe in you and your business model.
Zappos has proven to be the investment of choice for many people and company alike
since its inception. (Blanchard, 2010). Nick Swinmurn thought up the idea of Zappos and raised
$150,000 from friends and family in 1999 to get going. His idea took him to the WSA Show in
1999 (a global market for footwear and accessory buyers) but had no luck in securing more
investors until he met Tony Hsieh. Hsieh put in the $500,000 in seed money, and pumped in
many more millions more as his enthusiasm and commitment to Zappos, its customers, and its
employees grew.
Over the years, Zappos has attracted tens of millions of dollars from outside investors
including $48M from Sequoia capital. In 2008, as the credit crisis put Zappos in a very uncertain
position, Hsieh watched with uncertainty as his board pressed him to abandon the companys
core values and focus solely on profits. Zappos relied on a $100M line of credit to purchase their
inventory. Lenders wanted them to maintain and hit monthly goals to continue to keep the credit
line open. However, if Zappos missed goals by even a small margin, the lenders had the right to
rescind their credit. Many members of the board of directors were concerned about the potential
credit freeze and looked for a solutionwhich many felt lay with putting profits first and
employees second.
At the time, Alfred Lin, CFO and Tony, CEO controlled the majority of the shares, but
were in the minority on this particular vote. As Lin and Hsieh began to look for new investors,

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they were approached by Amazon. Discussions revealed that Amazon not only believed in the
Zappos culture, it believed in their revenue and growth potential. While Hsieh was offered an
outright buyout, he again stuck to Zappos core values and asked for an all-stock deal that would
allow employees, investors, and even customers who held stock to trade all their Zappos stock
for Amazon stock. As part of the deal, Amazon had to agree to let Zappos operate a separate
entity that was able to maintain their culture, values, and goals as is. Amazon so admired the
culture at Zappos, they not only agreed, they have since adopted the $4,000 incentive to quit and
have begun introducing other Zappos ideals within the Amazon corporate structure as well.
This deal helped Zappos show customers, investors, and employees that they were
getting something out of the deal and not losing anything in return. With the Amazon deal
done, Zappos removed the problems of the credit crunch and moved into total solvency, and
achieved their 10 year goal of being a $1B company on time. In fact, in the first quarter after
being acquired by Amazon, net sales were up 50 percent and several hundred employees were
added (INC).This year, the company is expanding even further and is again hiring more staff.
The entire acquisition process is one that could have greatly damaged the company and
moved it away from its core values, but Hsieh was able to turn it around and make it another win
for customers, employees, and investors, which clearly shows that Zappos fits Blanchards
profile for being an investor of choice.
Zappos is a company that truly focuses on employees, customers and they have earned a
reputation for making proper investment business decisions to drive innovative culture in all
types of economies. In this way, Zappos has truly demonstrated that it is a high-performance
organization.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

The following sections of this paper detail how Zappos addresses the following
components of HPOs, including:

The Power of Vision

Serving Customers at a Higher Level

Self Leadership

Coaching

Developing a Leadership Point of View

Culture

11

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The Power of Vision


In The Beginning
Zappos.com began in 1999 with a very simple vision, To be the company that provides
the absolute best service online. (Zappos.com, 2011) Founder Nick Swinmurn set about
developing an organization whose culture is dependent on the complete satisfaction of every
customer. Today Zappos vision statement is expressed in three parts:
One day, 30% of all retail transactions in the US will be online.
People will buy from the company with the best service and the best selection.
Zappos.com will be that online store.
In keeping with this tradition, current Zappos CEO Tony Hsieh has integrated this vision
into every aspect of the company. Ken Blanchard, in Leading at a Higher Level, makes the case
for developing a shared vision and how to integrate that vision into all the organizations
activities. Zappos takes this one step further by guaranteeing 100% customer satisfaction with
every purchase, holding all organizational activities accountable to this mission.
In their book, 144 Ways to Walk the Talk, Eric Harvey and Al Lucia provide suggestions
on how best to pursue this vision of exceptional service. They focus one section on how to be
customer driven, and one specific strategy states, Deliver what the customer actually wants
rather than what you think they ought to have. If youre not sure what they want, ask! (Harvey
and Lucia, 2011, p. 11) Ken Blanchard explains this same concept in his description of
Legendary Service; an organization must decide what the customer experience should look like,
what customers want, and how to deliver on those expectations. (Blanchard, 2011) The Zappos
vision is simply a commitment to legendary service by remaining customer driven.

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Importance of Vision
The importance of developing a shared vision, whether it be for a workgroup or an entire
organization, centers on collective direction. This is the leaders responsibility to get all members
on the same page and headed in the same direction. The leader accomplishes this by empowering
followers, utilizing proper motivational techniques, and conveying the importance of mutual
responsibility. Lastly, Ken Blanchard impresses upon the importance of maintaining a proactive
stance, able to adapt while keeping the desired end results in sight. Zappos incorporates this
shared vision experience through its treatment of mutual respect and admiration for its
employees. The employees of Zappos are an integral part of their corporate culture and CEO
Tony Hsieh leads them with the companys ten 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
Blanchard states, Values define leadership and how employees act on a day-by-day
basis while doing their work. (Blanchard, 2011, p. 23) To express the importance of vision and
values, Zappos posts a video on its website with employees describing their beliefs in the

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companys core values. This dedication to a shared vision is the cornerstone of success for
Zappos.

Vision and Leadership


The process of developing a shared vision remains the responsibility of the leader. The
leader is looked to for direction and guidance, and must be the one to implement this process.
Vision development must be an inclusive process and its success is crucial for successful
leadership. Tony Hsieh was not only instrumental in the creation of this vision; he participates in
the daily application of it as well.
In mid-2009, Zappos almost lost their CEO and their entire culture as well. Tony had
personally funded Zappos initial startup costs, but need outside investors to help manage
inconsistent cash flow issues. In a major miss-step, he brought on venture capitalists who did not
share the vision of corporate culture he had cultivated for 10 years. Revenue began to fall during
the long recession and there were talks of replacing Tony with a more like-minded CEO to that
of the remaining board members. Tony still held a majority share in Zappos and chose to
approach Amazon with an offer to partner and buyout the entire Zappos board. Amazon CEO
and founder, Jeff Bezos, understood the Zappos culture and agreed to not only buy the
organization, but to keep Tony on as Zappos CEO and give him full authority over the company.
Tony has since discussed this drawn out situation in great detail and now admits he was
shortsighted. Mike Masnick wrote of this situation for Techdirt stating, Although Zappos was
highly profitable, disagreements about corporate culture and vision caused Tony to sell his
organization rather than loose it in a board takeover. In order to protect the Zappos vision, Tony
must ensure that investment interests in the future are as committed to the companys vision as

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the employees are. Vision is important in any organization. At Zappos, vision is the companys
bedrock, integrated into every aspect of the organizations structure. (Masnick 2010)
Making the vision actually work is all about communication. The leader must engage
with team members and ensure responsiveness to the vision and goals. When following up, the
leader must provide support and allow team members to pursue the vision. Lastly, the leader
must convey the message that independent employees are accountable to the vision they helped
create and the overall outcome of their actions. The power of shared vision is apparent in all
aspects of Zappos culture. The employees are engaged, the organization is responsive to their
customers, and CEO Tony Hsieh is at the helm, leading the way toward success.

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Serving Customers at a Higher Level


The second most important step in becoming a High Performing Organization is to serve
customers at a higher level. Researchers created an HPO SCORES model and identified six key
elements evident in High Performance Organizations. The R in SCORES stands for Relentless
Focus on Customer Results. This focus is not related to the industry the HPO is in. It is our
intent to compare Zappos performance in the customer service sector to the qualities that HPO
displays.
In one of the interviews with Tony Hsieh, we learn that he and Zappos employees see
their company as a customer service company that happens to sell shoes. This means a radical
shift from past service behaviors. It puts the customer right in the center of attention, instead at
the end of the process. Customer needs will drive innovation and help create new products and
new services. HPOs build their services from the customer backwards to their product and in this
way, they are able to react quickly and can adapt to changes in the market/industry. Customer
responses and purchasing behaviors, and questions asked in service calls enable the HPO to
anticipate trends much easier.
Creating Legendary Services
One of Zappos core values (mentioned earlier) is specifically targeted at the customer
and the service:
Deliver WOW through Service
The emphasis in an HPO is relentless focus on customer results, which far exceeds
merely good service. It produces reliable and repeatable customer satisfaction. When customers
expectations are consistently met and frequently exceeded, customers will return and spread the
news of positive experience by word of mouth. The leadership of an HPO has identified

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customer service as one high priority element and acts upon it. The leadership in Zappos
encourages their employees to think outside the box, allows them to be creative and to deliver
legendary service. It is the service person at the other end of the telephone that builds the
relationship with the customer and gives the message I CARE. This phrase has more than one
meaning.

Blanchard describes legendary service as consisting of five elements:

Ideal Services:

Once the importance of service has been recognized and that the customer
is the center of services, expectations can be consistently met or exceeded
on a daily basis.

Culture of Service:

Serving internal and external customers at the highest possible level by


creating an environment that focuses on the customer.

Attentiveness:

Listening to what the customer wants or needs in a non- threatening,


creative way.

Responsiveness:

Demonstrate willingness to go the extra mile by paying attention.

Empowerment:

Support the people facing the customer and enable them with information
sharing, tools etc. to do the best they can.

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The five elements above can be summed up to I CARE, which connects to the
customer on an emotional level. Below are examples of how I CARE manifests itself at the
company, directly from employees, leaders and outsiders:
Ideal Services:

Q: How does Zappos 'go the extra mile'?


A:Our team members send personal handwritten thank you cards to
customers of their choice. They can also put in a request to send flowers
or a WoW package (culture book, stickers, other Zappos items we have
on hand, etc.). Usually well send flowers for a celebration such as a
wedding or to offer our condolences for a family/friend who has passed.Jane Judd on customer loyalty

Culture of Service:

Although the always-on toll-free number is prominent on every page of


the companys Web site, customer service is not the top priority for
Zappos. Corporate culture is. Tony says getting the corporate culture
right results in customer service falling into place, along with everything
else. Instead of being a department, customer service is the company. To
ensure the right attitude about things, prospective employees are asked, on
a scale of 1 to 10, how lucky they believe they are. Every new hire gets
four weeks of customer loyalty training. Do your job well at Zappos,
and you have a good chance of being honored with your own personal
random-acts-of-kindness parade through the office. Jeff Cierny

Attentiveness:

I dont really pay attention to what competitors are saying. We just listen
to our customers. But Im sure they are paying attention to our

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competitors, so the information eventually gets to us in the form of our


customers telling us what they want. Tony Hsieh
Responsiveness:

We serve therefore we are. Christina C.

Empowerment:

Zappos encourages me and gives me tools to become the best me I can


be. - Vanessa L. Employee since 2007
Empower and trust your employees. When you take care of your
employees they take pride in the work they do, which helps to provide the
ultimate customer service. Tony Hsieh

Serving Customers at a higher Level


Serving customers at a higher level means, defining your goal. Blanchard suggests asking
the question, What kind of experience do you want your customers to have as they interact with
every aspect of your organization? You need to understand what the customer wants, and create
a powerful image of what your service will look like when everything runs as planned. Zappos
has accomplished that with its core ten values. By putting the Deliver WOW through Service
in first place, Zappos Leadership makes a statement and Zappos employees live by that
statement. The Zappos Culture book that gets published yearly reflects the state of mind of every
employee.
Harvey and Lucias 144 Ways to Walk the Talk says that customers are not only people
buying the product (Harvey, Lucia, page 11, 2nd edition). Customers can be inside and outside
the company. Zappos policy is to give great service to everyone. Zappos has identified four
potential customers; customers, employees, vendors, and investors
One of Zappos strategies is to discover what the customer wants, by listening and
understanding. Really listening in a non-defensive way helps customers open up and share their

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experience. Zappos can then understand what the need is and act on it. Zappos has established a
direct connection with the customers ranging from service numbers on every webpage,
Facebook, Twitter a 24/7 live customer service. By understanding what it is the customer wants,
Zappos can deliver the perfect service experience.
Another key to delivering the perfect service is the people who deliver the service.
Blanchard emphasizes that an HPO has to make employees part of the vision, make them feel
responsible and take ownership of the process. Zappos accomplishes just that by creating the
perfect culture in which their employees can serve and be part of the Zappos experience.
My wife had ordered a pair of sandals from Zappos. When they arrived, she found that
they didnt fit. She tried to order the right size, but Zappos was sold out of her size. So heres
what the company offered: she could return the sandals (for free), Zappos would refund the
purchase price and theyd send her a $25 coupon toward her next purchase. But wait theres
more! Zappos also offered to try to locate a pair of the sandals in her size from another vendor.
(Hah! Sure, they will!) Fifteen minutes later, the company called my wife and told her theyd
found her sandals, in her size, at another online merchant and, the Zappos clerk told her,
Theyre even cheaper at this other site! Stephen J Dubner

Empower people to their full potential


In a HPO people should follow rules, but should at the same time make decisions on their
own when circumstances call for it. People who are empowered and trusted with making
decisions within their field of responsibility feel proud and energetic about what they are doing.

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People in every organization can be turned into followers, when the work is worthwhile and they
feel that they are in control of achieving their goal. This energy or flame needs to be kept alive
by cheering each other on.
People at Zappos who serve customers have rules, but at the same time, these rules are
not limiting. The rules encourage the individual to go the extra mile to deliver the best service
experience for the customer. Following are some of Zappos unique approaches:

No call time

No sales-based performance goals for reps

5 weeks of culture, core values, customer service, and warehouse training for everyone in
Las Vegas

Culture book

Interviews and performance reviews are 50% based on core values and culture fit.
Having looked at how Zappos lives and breathes customer service, we should ask the

question if there is anything that can be done better. Zappos track record has shown that the
current customer service is at the heart of Zappos success and therefore fulfills every aspect of a
High Performance Organization. The challenge lies in the ever changing needs of the customer.
Zappos has to keep adjusting to new ways of communication, new customer needs and new ways
of delivering its services. What does this look like? No-one knows for sure. That means for
Zappos, that their effort to service the customer has to keep energized, keep growing with the
situation and follow one of the old words of wisdoms panta rhei.*
* panta rhei (lat., Heraclitus of Ephesus) everything flows

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Self Leadership
High performing organizations have staff who exhibit self-leadership. Our objective is to
examine the performance effects of self-leadership efforts related to ZAPPOS success. We
explore the effects of the self leadership model by investigating the extent to which ZAPPOS
use of self leadership strategy is related to the overall performance and success of the
organizational unit.
Zappos culture embodies the empowerment model and fosters self-leadership.
Tony Hsiehs schema, which symbolizes Zappos, is sustained by the passion in a
statement which is contained in every written article, book or blog about the company If we
get the culture right, then everything else, including the customer service will fall into place.
This is embraced by every employee and supported by the following testimonial;
Zappos Culture is the overall environment; space, attitude, freedom, management style,
and actual physical surroundings which all work together to create a total milieu which attempts
to make each individual better and happier on a whole, so that each one of us will then spread
this to each other, our customers, and everyone we encounter. -Mike S. Employee since 2005
Zappos core values define their organizational culture. Those values support and
cultivate the organization workforce, their behavior, their commitment, and their
individualism/collectivism, suggesting that effective self-leadership involves achieving
equilibrium between focusing a cohesive work group which focuses on the value and identity of
each individual employee.
Blanchard, Fowler and Hawkins argue that when self-leaders infuse ingenuity into their
methodologies for success, it prompts leaders to respond to those queries; the stereotypical
pyramid turns upside down and leaders then support those who were being led.

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At Zappos, the WOW approach supports self-awareness and innovation. This first core
value promotes individuality, fosters self-confidence offering each employee the opportunity to
enhance their scope of creativity without reserve. By cultivating intrinsic freedom the common
fears which generate assumed constraints are vanquished from the equation unleashing a
welcomed passion for change. Zappos extrinsically supports open mindedness, promotes and
encourages decision making-skills, advocates the why as well as endorses exploring new
possibilities. The commitment to employee growth extends beyond the professional component;
it is aligned with personal growth. Hsiehs philosophical mission for all of Zappos employees is
to constantly challenge and stretch oneself, to guide them as they reach beyond personal
expectations to unlock their ultimate potential. If this is done, then the company will grow, and
in the process, they will be growing themselves.
Harvey and Lucias 144 Ways to Walk the Talk include several strategies which align
with Zappos mission, empower others, strategies 93 -96 and Support Teamwork, strategies 97 to
100. Summarizing the former, Empower Others, Harvey and Lucia demonstrate the value of
shared authority, the rise of untapped potentials, the significance of increased communication,
feedback and interaction impart and the inclusion of EMPOWERESE with such phrases as
Would you like, How can I, I trust Each one of these four stratagems is threaded
throughout their Zappos Family Core Values.
The latter, Support Teamwork, validates Zappos creed to realize empowerment
concurrently understanding that this is an endless cycle whereby success, risk, stress, and
confusion intrude. The resulting product is that Zappos is better than their competition on every
level. Zappos has a stated performance reliability which epitomizes their core values and belief;
passion and determination are contagious, the universal optimism that everyones actions impact

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

24

another is abundantly clear. Strategically, Zappos inherent commitment to employee


advancement paves the way for self-confidence, conviction and organizational pride. Selfleadership is fertilized by individual learning, a critical facet of high performing organizations.
ZAPPOS is a leader in the industry; their core values hold their employees to high
standards, and meet with little or no resistance as they demonstrate the commitment to these
values across every level of the organization. ZAPPOS has created an organizational culture
which embraces growth, learning, self-awareness, commitment and a greater good for all. The
environment which supports this magnanimous culture, cycles through change and challenge at a
rate that for many would seem unfeasible; it is this ideology that warrants a more in-depth
analysis as we develop an alternate plan of action to facilitate the emotional, behavioral and
constructive thought patterns associated with self-leadership and significant rates of change.
The culture of ZAPPOS is unique; ever changing, transforming, and adjusting as stated in
one of their core values, Embrace and Drive Change. This campaign is what controls ZAPPOS
ethos, their destiny and evolves their culture. This realization, albeit solid in theory, we
recommend the following systemic approach to ideologically enrich the constructs of the self
leadership behavioral design. Focusing on the three skills of a self leader as offered by
Blanchard et al,

Challenge Assumed Constraints: Zappos core belief to be determined, passionate and


drive change could be markedly enhanced by focusing their leadership training systems
towards a deeper awareness of individual personal constraints. Managers who poses the
tacit knowledge necessary to identify the subtle nuances that restrict their direct reports
effectiveness can release those constraints allowing them to go beyond those assumed
constraints to reach their goals

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

25

Celebrate Your Power Points; ZAPPOS core belief Do More with Less emphasizes
improvement, efficiency and urgency. Strengthening self-awareness edifies the source
of intrinsic power; a deeper understanding of power provides the breadth to expand its
value. ZAPPOS commitment to employee empowerment could easily pivot on the five
sources of power.

Position Power

Personal Power

Task Power

Relationship Power

Knowledge Power

Fowler et al argue that the sole advantage of power is the ability to do more good
which aligns with the ZAPPOS family culture, further more is offered by Fowler et al
that everyone has some measure of each of these powers within them; however
unbalanced this promulgation may be.

Collaborate for Success; ZAPPOS candidly acknowledges in their core value, Build
Open and Honest Relationships with Communication, that communication is the most
vulnerable sphere within any organization. The interconnectedness that underscores
ZAPPOS credo would be enhanced to an even higher level if individuals engaged in
supportive leadership (SL) training. SL foundation concentrates on the emotional and
behavioral elements of leadership which complements as well as elevates core value #6.
ZAPPOS is undeniably a HPO; innately habituated to the mechanisms that promote
exceptional growth, knowledge, self-awareness, by fusing these recommended methods

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

to their passion, vision and mission they will advance to a higher level of an already
HPO.

26

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

27

Coaching
According to Blanchard, all industry sectors will be experiencing a leadership shortage
sometime in the near future. The development of new leaders is becoming an important focus
for executives and senior managers. More and more, coaching is being recognized as one of the
key competencies that effectively develops future leaders. (Blanchard, 2010, p. 2) Blanchard
describes successful coaching as deliberate, purposeful, and fully aligned with team and
organizational objectives (Blanchard, 2010, p.150) Zappos clearly incorporates this
successful coaching mindset by staying attuned to its cultural values in all aspects of the
business, from the hiring process, to initial training and then pipelining employees into upper
level positions throughout an employees longevity.
Blanchard highlights five applications of coaching, including:

Performance coaching (when an employee is not meeting performance standards)

Development coaching (when an employee is ready to move to the next level)

Career coaching (when an employee is ready to move to a new career role)

Coaching to support learning (to follow up with training an employee has recently
engaged in)

Creating an internal coaching culture (when leaders utilize coaching to assist their
employee base)
(Blanchard, 2010, p. 151)

Hiring the Right People and Initial Training


Zappos engages in each of these five applications through its core value: Pursue Growth
and Learning. To begin with, individuals are hired with the mindset that the best expertise

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

28

they can bring is expertise at learning and adapting and figuring new things out- helping the
company grow, and in the process, they will also be growing themselves. (About Zappos Core
Value #5) Zappos takes extra care to hire people who are the right fit for their company and
even offers $4000 for new employees to leave after training (those that take the offer are not
allowed to apply at Zappos again).
Once hired, an employee goes through a pipeline and culture training process, so that
they are able to deliver WOW experiences both internally and externally to all customers.
Training for new hires includes:

Four-week new hire training (including answering phones)

Zappos History

Zappos Culture

Science of Happiness 101

Tribal Leadership

1-week Kentucky Boot Camp

Public Speaking

Delivering Happiness

Intermediate-Level Competency with Microsoft Office

(Hsieh, Training, Mentorship at the Core of Our Employee Pipeline Strategy)


Hiring for the right fit and then providing the new hire training means that people are
educated right in the beginning about what work at Zappos involves, setting the tone for
performance coaching.
Continuous Improvement
To address the idea of development and career coaching, Zappos has an Insight Team
made up of 12 people including the CEO, a Mage of Mayhem, a Goals Coach and a Culture
Evangelist, all designed to bring out the best in employees and the business. The goals coach is

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

29

a full time position whose purpose is to help an employee achieve any 30 day goal they have,
whether personal or professional. The top three goals that this person helps employees to
achieve include:
1. Career Development
2. Weight Loss
3. Management of personal finance/budgeting
(Schubnell, The Life Coach at Zappos)
Zappos also offers training to employees in new skill sets, which result in pay bumps.
Interestingly, the company does not offer annual raises to staff- they need to obtain new skill sets
in order to get pay increases. CEO Tony Hsieh explains, Our philosophy at Zappos is different.
Rather than focusing on individuals as assets, we instead focus on building as our asset a pipeline
of people in every single department with varying levels of skills and experience, ranging from
entry level all the way up through senior management and leadership positions. Our vision is for
almost all of our hires to be entry level, but for the company to provide all the training and
mentorship necessary so that any employee has the opportunity to become a senior leader within
the company within five to seven years. (Hsieh, 2010)
Clearly, the company is focused on career development for its staff, and has a pipeline
training strategy in place for each of its departments, all starting with making sure the employee
is the right fit. These activities tie into a number of the 144 Ways to Walk the Talk, including:

Develop and maintain technical knowledge

Commit to quality and continuous improvement

Commit to self-development

Coach others

Support organizational values

Empower others

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

30

What the Employees Say


Chelsea S, employee of Zappos since 2007, had this to say about the coaching culture:
The Zappos Culture has allowed me to grow at my own pace as well as to be myself. Within a
little over two years, I have learned various skill sets, been a Specialist on a specialty team, and
have been give the opportunity to be a Senior Rep. I dont know of any companies that allow
you to step into the role of a lead position and see if its something you would want to purse in
the future. (Zappos Culture Book, 2010, p. 28)
Denise M, employee since 2009, gives a bit of insight about the development and career
coaching works for her. Other places leave you stuck in one position and hire new people for
upper level jobs. Here they want us to learn the upper level jobs and do them. We have classes
all the time, and we can learn about everything from history and happiness to public speaking
and Power Point. (Zappos Culture Book, 2010, p. 35)
Beyond the Current Employee Strategy
The company is extending its pipeline training to college freshmen, offering internships
and additional training, so that by the time they graduate, they are ready for the Zappos work
experience. Hsieh explains, Once our entire eleven-year pipeline is built (from four years prior
to joining Zappos all the way through seven years after joining Zappos), we'll have a substantial
long-term competitive advantage over everyone else. Combined with our ongoing efforts to grow
our brand and our culture, we believe that our BCP (Brand, Culture, Pipeline) strategy will
provide the platform necessary for Zappos to be a long-term enduring and growing business.
Interestingly, the company is offering Zappos Insights training program to outside
companies and executives for a fee, including a two day quarterly boot camp, meetings with
Zappos top management to discuss how the program works in real life, use of templates that

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

31

can be adapted within their own company and an online subscription to their Insights Core
Curriculum and blog.
Individuals who cant afford the Boot Camp can choose shorter, less expensive versions of the
training at the Gold and Silver levels. All include the Core Curriculum online, which
incorporates the following modules:

Core Values

Hiring and Firing

Training for Leaders and Longevity

Customer Service

Empowerment and Engagement Inspiring Purpose

Leadership

According to Market Watch, Zappos considers itself a living lab because of its external
training programs and because they allow anyone to tour the company, speaking with any
employee about their personal experience in working at Zappos. Essentially, Zappos is taking its
internal coaching programs and making them available to other companies and individuals
interested in duplicating the Zappos experience. This company is not only growing its own
internal leaders, but helping to address the coming leadership shortage noted by Blanchard
through its external training programs.
The only concern this researcher has about Zappos foray into corporate training is that
the company may begin to lose focus on its core business and thus lose the power of their brand.
At its core, Zappos is still an online retailer. If Zappos pumps more time and energy into service
training that does not directly benefit its core business, will its core business lose its value?

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

32

Zappos Leadership: Developing a Point of View


Chapter 15 of Blanchards Leading at a Higher Level explores the topic of how a leader
determines their point of view on leadership and how to communicate this point of view to their
followers. Several of these same principles are to be found in 144 Ways to Walk the Talk by
Harvey and Lucia. Here, we will explore how these common concepts and principles for
developing and communicating a vision are utilized to great success by the leader of the greatly
successful and popular on-line shoe retailer Zappos, Tony Hsieh.
Blanchards point of view, according to chapter 15 is that to create a great organization,
leaders have to make sure everyones aiming at the right target and vision. The stated goal o
chapter 15 is to help a leader develop their own point of view and prepare a leader to teach
others. The focus, according in Blanchard, is to focus on serving, rather than being served.
Chapter 15 laid out 8 Main Elements of a Leadership Point of View:
1. Who are the influences, or key people, in your life who have had a positive or negative
impact on your life?
2. What key events in your life have had an impact on how you lead others? How did these
events impact your thinking about leadership?
3. Think about your lifes purpose: Why are you here and what do you want to accomplish?
4. What are your core values that will guide your behavior as you attempt to live your life
on purpose?
5. Given what youve learned from past influences, life events, your life purpose and core
values, what is your leadership point of view your beliefs about leading and
motivating people?
6. What can people expect from you?

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

33

7. What do you expect from your people?


8. How will you set an example for your people? (Blanchard, 2010)
Similar to and building on these core values, Harvey and Lucia provide several examples
of how to build and communicate a vision, including:
81. Provide everyone with a copy of your mission, vision, and values (or your organizations
equivalents). Adopt the mindset that these guidelines are as important as your work values
and treat them accordingly. (Harvey and Lucia, page, 31)
89. Adopt the mindset that your employees dont work for you you work for them. Refer to
your team members as: the people I work for. (Harvey and Lucia, page 33)

Zappos core values are directly linked to the 3rd, 4th, 5th, 6th, and 7th Elements of
Leadership vision outlined by Blanchard:
-

Think about your lifes purpose. Why are you here, and what do you want to
accomplish? Hsieh has described his viewpoint as Generally, I associate drama with
negative emotions, and I want to experience positive emotions Hsieh is also writing a
book called Delivering Happiness. (Jacobs, 2009) Based on his descriptions of what he
wants out of life, it is possible to describe Hsiehs life purpose as experiencing and
delivering to others happiness positive emotions through his work.

What are your core values that will guide your behavior as you attempt to live life on
purpose? Hsieh has defined these values in his 10 Core Values for Zappos. This is also
what is recommended by Harvey and Lucia; provide everyone with a copy of your
mission, vision, and values

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

34

What can people expect from you? Those who work for Zappos, as the core values state,
can expect an environment of fun, creativity, and the ability to be a little weird; in other
words just be different from the rest. Hsieh describes this as asking himself the question
what kind of company can we create where we all want to be there, including me? How
can we create such a great environment, where employees get so much out of it that they
would do it for free? A New York Times article describes some Zappos employees
working for as little 11 dollars an hour, a clear testament to the fact that the employees
appreciate the vision, and enjoy what they expect to receive from their leader and
employer. (Jacobs, 2009) Ensuring that employees are receiving something form their
employer beyond money is tied in to the philosophy of Adopt the mindset that your
employees dont work for you you work for them. Refer to your team members as: the
people I work for.

What do you expect from your people? Hsieh expects from his employees that they will
continuous better themselves through learning, that they will learn to carry out their jobs
under less than ideal situations; doing more with less, that they will be creative in
carrying out their tasks, and that they will be humble towards their customers. As an
example of the dedication that Zappos employees show, a marketing employee
exchanged a pair of shoes for a woman who had a bad fit, and over-nighted them to her
free of charge in order to ensure they would arrive in time for the women to have her feet
measured for orthotic inserts for her shoes the next day. (Jacobs, 2009) As a result of this,
Zappos continues to enjoy a reputation for innovation and dedication to customer service.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

35

Having read Chapter 15 of Leading at a Higher Level, as well as 144 Ways to Walk the
Talk, the values and elements which Blanchard has identified in creating and communicating a
leadership vision have clearly been utilized by Tony Hsieh and Zappos.com. As a result of
communicating to the employees of Zappos what they can expect to receive from and give to the
company, Zappos has attracted and maintained a dedicated work force as well as a reputation as
an outstanding customer service company. Zappos has risen to become the most popular on-line
shoe retailer, and it stands to reasons these keys for success could be carried over into any
venture, even the public service sector such as the military, as Blanchard describes in a case
study at the end of the chapter, drawing on the story and experience of a Navy SEAL Officer. In
short, a vision may determine the success of failure of a venture.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

36

Culture
In this section we will evaluate why Zappos' culture is one of the major contributing
factors that makes it an HPO. What exactly is an organization's culture? In chapter 13 of
Leading at a Higher Level, Ken Blanchard defines culture as "the context in which all practices
exist. It is the organization's personality; it's 'how things are done around here.' When we talk
about an organization's culture, we are referring to the values, attitudes, beliefs, behaviors and
practices of the organizational members." (Blanchard 2011, p.241)
In Michelli's book, The Zappos Experience, he discusses the Zappos culture in great
detail. His opening statement in chapter 2 is "While the Zappos culture is enviably strong today,
the journey to its well-defined values was not exactly linear. The way the leaders at Zappos
developed their culture and defined their values should offer hope, insight, and encouragement to
those who lack a written set of values or feel there is a gap between their purported corporate
values and the actual culture of their business." (Michelli 2012, p.27) This statement is exactly
in line with what Blanchard discussed in his chapter 13 about how most low performing
organizations have that gap between their intended values and the actual values that are enacted
on a day-to-day basis.
In the beginning, the Zappos leadership team did not explicitly define their core values
when they started the business. Instead the leadership team implicitly demonstrated what the
values were. This is demonstrative of Harvey and Lucias behavior principle #12 from 144
Ways to Walk the Talk: Make sure you WALK THE TALK. Earn the right to hold others to
high standards by meeting them yourself (Harvey and Lucia, p. 9). One of the leadership
team's goals was to create a work environment where people could have fun and experience a
sense of community. They firmly believed "people who play together stay together" and that

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

37

their team's ability to survive was dependent upon this. Creating a fun environment did not cost
anything and yet created a tight connection among the employees. Amanda R. (an employee at
Zappos) described the culture as "One word that describes the Zappos Culture is 'Fun'. We all
know the common thought that you're not supposed to have fun at work. Well, Zappos puts that
to rest. Every day, Zappos tries to do something different to make each day exciting and fresh.
From parades to dress up days, only Zappos could pull off the activities we do each and every
day. (Zappos Culture Book 2008). Ana S. writes: To me, the Zappos Culture means
excellence, acceptance, and FUN. I have never ever worked for a company that is so conducive
to my goofy personality and, for that matter, encourages it (Zappos Culture Book 2010).
In the early stages, Zappos also focused on service delivery after they sought out direct
input from their customers. They felt their customers needed to have faith in the fact that their
shipments would arrive in a timely fashion once their credit cards were charged. The original
drop shipment method from the vendors was not conducive to this. Service reliability was
compromised. The leaders felt the future of Zappos was dependent on service delivery and
therefore discontinued the drop shipment method of delivery. CEO, Tony Hsieh, stated "We
want to be the best in customer service" (Michelli 2012, p.30). This was his declaration that
customer service was a top priority and the leaders would enact and live that to ensure this
became part of the "living" culture. Zappos then leased their fulfillment center, enacted
technological solutions to help keep up with the demands, and moved its headquarters and call
center to Las Vegas. The move to Las Vegas was made under the notion that there they had a
workforce that was accustomed to working 24 hours per day and would deliver the desired
service standards Zappos held itself to.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

38

When Zappos was in the beginning stages and after they acquired their first warehouse in
Kentucky in order to serve their customers with premier service, the initial characteristics of their
culture continued to evolve. The first employee who was responsible for the oversight of the
warehouse explained, Determining what we think is right for the customer, setting a course in
that direction, diving in, making mistakes, and learning from those mistakes represents a lot of
how Zappos was created. We went through the development of our own processes at the
Fulfillment Center and figured things out as we went. (Michelli 2012, p.13)
As the Zappos culture continued to evolve the leaders recognized the Zappos cultural
identity was headed toward one of service. Zappos leaders asked themselves these four
questions, which align with Blanchard's findings, in order to stay on track to culture
identification:
1. Do you have explicit corporate values? If so, do those values reflect a blend of your
founding principles and the evolving demands of the marketplace? Or are they static and
immutable?
2. What do your customers value? How do your corporate values match up with the wants,
needs, and desires of your customers? (This is conducive with Harvey and Lucias #20:
Build business partnerships with your customers by under-promising, over-delivering,
and following-up to ensure they are satisfied. Solicit their input on how your products
and services can be improved (p. 11).
3. Since values can be both explicit (stated) and implicit (unstated), do your corporate
actions align with your stated values? If not, what do the major decisions of your
business suggest about your company's real values?
4. How willing are you to consider revising your stated values to match your demonstrated
actions or revising your actions to match your stated values? What might those revisions
look like? (Michelli 2012, p. 31)

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

39

Michelli points out that Tony Hsieh did not seek out the opinions of his senior leadership
team when he attempted to document the culture. As Blanchard suggested, Hsieh sought the
diverse strengths of the entire employee base at Zappos. He solicited input from every staff
member and he received a wealth of "broad and unusual" descriptors from them that wasn't only
representative of the senior team. By doing this Hsieh gained insight and ownership from the
very people who would be enacting this culture making it a living entity. By seeking and
utilizing input from employees at all levels Zappos demonstrates Harvey and Lucias # 81:
Provide everyone with a copy of your mission, vision, and values (or your organizations
equivalents). Adopt the mindset that these guidelines are as important as your work rulesand
treat them accordingly (p. 31).
As noted throughout this paper, values awareness is very heavily relied upon at Zappos.
The ten core values are exposed everywhere and are synonymous with the Zappos name. They
are prominently displayed on the website and are printed on the delivery boxes so the customers
will see them as well. Potential employees are expected to have a thorough knowledge of them
as well. These values are engrained in everything Zappos does from beginning to end.
These values guide employees in their everyday interactions and decision making
processes. Even when Zappos is seeking prospective job candidates they tend to seek those
individuals who fit the culture before those who fit the skills. Hiring managers consider whether
or not an applicant will fit into the team culture before they consider an individual's skill set.
They see the skill set as something teachable and can be learned as long as the individual is
responsive to the values regarding learning and growth. (Michelli 2012, p. 45) Great attitudes
and passion are highly sought characteristics as these cannot be taught; they are innate within the
employee and are necessary in order to fit into the Zappos culture.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

40

Zappos CEO, Tony Hsieh, refers to his companys values and culture as being
synonymous with the Zappos brand. He also knows it takes far more than words to produce a
culture that is values-driven. The best way to know the Zappos culture is to take a tour or
interact with our people. Values are not what we do on paper; theyre what people do and how
they feel doing it. (Michelli, p. 16) In 2004, Zappos produced its first culture book where they
solicited uncensored feedback from their employees regarding the culture at Zappos. The
following are employee testimonials from the 2010 version of that book:
Alicia J. writes: The Zappos Culture is born from Ten Core Values that are key to living life,
not just working here. So many companies talk about core values and mission statements at
orientation, but few follow through. Zappos lives and breathes its core values.
Andrea B. writes: The Zappos Culture runs deep in all the Zappos employees. Its a way of life
for most of us, with principles and beliefs that we all apply to daily life, not just work. Its
almost like an infectious disease.
One common characteristic that Blanchard has found in the organizations which he
considers high performing is that "the culture serves their people, customers, and stakeholders
equally." (Blanchard, 2011 p. 243) Zappos leadership clearly understood the importance of
feelings in determining behavior. These leaders continually attempt to translate their values into
feelings of trust for all stakeholders to include vendors, employees, and customers.

An example

of this trust is in Michellis book on page 16. One of the Customer Loyalty Team (CLT)
members stated that the trust experienced by the customers also reflects the trust extended to
staff. She states, Our leaders put such a great level of trust in us to do the right thing without
hemming us in through scripts or unnecessary rules. They also encourage us to grow and have

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

41

fun with our peers. Because of the way we are treated, Zappos gets the best from us, and so do
our customers. Obviously, some people will violate trust, and you can manage that when it
happens, but that doesnt justify distrusting. You get so much in return when trust is extendedyou get wow. This is a solid representation of Harvey and Lucias # 93: Share authority. Let
each team member be the owner of something meaningful- like a process, a database, a piece
of equipment, a room in your facility, etc. Having real (and recognized) authority changes the
scope and perception of a responsibility that is already part of the job description (p. 34).
Blanchard creates a model for a sound culture within organizations. In order to achieve this,
he states three elements must be in place:
1. A foundation of clear performance expectations
2. Behaviorally defined values, and
3. Accountability for demonstrating both (Blanchard 247)
Zappos culture clearly reflects all three of these characteristics. The Zappos culture has a solid
foundation based upon these concepts. Blanchard reiterates on p. 256-257 that in order for
organizations to create high performing cultures they must also share 5 critical success factors
which are all clearly demonstrated by Zappos as well. They are as follows:
1. The senior leadership team must demonstrate commitment to the long-term process. The
senior team must be the champions of change.
2. Values must be defined in behavioral terms. When behavioral terms are used then they
are measurable.
3. Accountability for delivering promised performance and demonstrating valued behaviors
is paramount. Consequences must be applied both ways; negative consequences must be
administered when performance is sub-standard and positive consequences must be
administered when standards are met or superseded.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

42

4. It is vital that all staff are involved in and buy into the culture transformation at every
phase. Everyone in the organization must have input into defining the culture. This will
help solidify their overall commitment and enhance their passion.
5. The elephant must be eaten one bite at a time. The development process must be
strategic. Start small and ensure the process is understood and then branch out to other
parts of the organization.
It is clear from the points made here and throughout the rest of this paper, that the Zappos
culture meets all five of these standards and is truly evident and top priority in everything right
from the initial interview through the delivery of the product to the consumer. It is woven into
the fabric of everything Zappos touches; it is real, malleable, and alive. Zappos' culture is
aligned with Ken Blanchard's interpretation of what a high performing culture looks like and
represents and with Harvey and Lucias 144 Ways to Walk the Talk. This is clearly
demonstrated from the emphasis on their values; the way senior leaders model and demonstrate
the desired behavioral attributes, the desire to consistently seek improvements, the passionate
employee accounts of the Zappos culture and the employee participation, acceptance, buy-in and
ownership of the values system.

ZAPPOS AS A HIGH-PERFORMING ORGANIZATION

43

Conclusion
As this paper has shown, Zappos is a company like no other. Having explored their
corporate structure, values, leadership attributes, and pipeline strategy, it is clear their unique
corporate culture is what drives their success. With low turnover and a stringent hiring policy,
they create loyalty among their employees through rigorous training. With a firm commitment to
their team, Zappos has consistently hit their goals and lives their ten core values with fervor and
passion.
Although we, as a team, feel that Zappos is amongst the best of high performing
organizations, we humbly offer the following suggestions (highlighted through the paper) for
continuous improvement:

Being cognizant that technology and customer needs will never remain stagnant, be sure
to continuously monitor new technology and communication tools and customer service
trends, as well as continue to poll customers about their wants/needs.

Currently, employees drive their own continuous improvement. Having managers


identify gaps in employee skill sets that limit the companys current effectiveness may
also help to drive innovation and improvement.

Another training program that Zappos might offer its employees is one in Supportive
leadership, concentrating on the behavioral and emotional elements of leadership.

Be careful that continued growth of offering outside corporate training through their
Insights program may confuse the customer about the Zappos brand and its core
business as an online retailer. While many companies have grown to encompass many
industries, Zappos will want to think strategically about how it builds out this part of the
company so that customers and employees dont get confused about the core business is.

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44

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Gabbay, N. (September, 17 2006). Zappos.com case study: why shoes are great for e-commerce
yes, really [Web log message]. Retrieved from:
http://www.startup-review.com/blog/zapposcom-case-study-why-shoes-are-great-for-ecommerce-%E2%80%A6-yes-really.php

Gossel, L. (November, 3 2010). What is a high-performance organization (hpo)? [Web log


message]. Retrieved from: http://www.helium.com/items/802036-what-is-a-highperformance-organization-hpo

Harvey, E., & Lucia, A. Walk the talk. (2 ed.). Flower Mound, TX: MultiAd.

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Hsieh, T. (June , 1 2010). Why I sold Zappos Inc., Retrieved


From: http://www.inc.com/magazine/20100601/why-i-sold-zappos.html
Hsieh, T. Training, Mentorship at the Core of Our Employee Pipeline Strategy, Huffington
Post,

Retrieved from: http://www.huffingtonpost.com/tony-hsieh/zappos-ceo-how-

weve-built_b_812187.html

Jacobs, Alexandra, 2009. Happy Feet: Inside the Online Shoe Utopia. The New Yorker.
Available at: http://www.newyorker.com/reporting/2009/09/14/090914fa_fact_jacobs

Kjerulf, A. (July, 9 2009). Happiness at Work at Zappos. Retrieved from


http://positivesharing.com/2009/07/happiness-at-work-at-zappos/

Landau, Blake. 4 Questions With Tony: What Other Businesses Can Learn from Zappos.
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http://www.cmswire.com/cms/web-engagement/4-questions-with-tony-what-otherbusinesses-can-learn-from-zappos-009544.php

Masnick, M., (2010). Techdirt.com, Refreshing Honesty On Why Zappos Sold To Amazon, June
7th, 2010. Retrieved from: http://www.techdirt.com/articles/20100607/0014299706.shtml.
McDonald, Duff. Case Study: Open Source at Zappos. Baseline Magazine. November 10, 2006.
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http://www.baselinemag.com/c/a/Past-News/Case-Study-Open-Sources-Sole-Purpose-atZappos/

Michelli, J. (2012). The Zappos Experience: 5 Principles to Inspire, Engage, and Wow. USA:
McGraw Hill.
Schubnell, M. The Life Coach at Zappos, Coach & Grow Rich, Retrieved from:
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Tech Republic. October 1, 2009. Retrieved from:


http://www.techrepublic.com/blog/10things/10-questions-on-customer-service-anddelivering-happiness-an-interview-with-zappos-ceo-tony-hsieh/1067

Ueng. (October, 5 2009). Zappos: 4 keys to building your brand [Web log message]. Retrieved
from http://resoluteventures.typepad.com/savvys-resolute-adventures/2009/10/zappos-4keys-to-building-your-brand.html

Zappos, 2011. Zappos Family Core Values. Retrieved from: http://about.zappos.com/our-uniqueculture/zappos-core-values

Zappos IP, Inc. and its affiliates. (2010). 2010 Culture Book. Las Vegas, NV.

Zappos.com, (2011). Zappos.com, In The Beginning - Let There Be Shoes. Retrieved from:
http://about.zappos.com/zappos-story/in-the-beginning-let-there-be-shoes.
http://about.zappos.com/our-unique-culture/zappos-core-values/pursue-growth-andlearning
http://www.zapposinsights.com/membership/faqs

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APPENDIX: Personal Learning


Derek Justice
This course and team project has acted as my introduction into collaborative learning at
Roger Williams University. It is truly an eye-opening experience. From the inclusive classroom
setting to the amazing professionalism of my peers, this introductory course has energized my
motivation to learn and contribute.
My initial contribution to this project was the vision section of our paper and PowerPoint.
I used sources from Blanchard, Harvey and Lucia, and multiple online sources to correlate our
learning of HPOs with Zappos vision and values structure. This activity was by far the easiest
part of the project for me, since my experience in writing research papers is extensive. The
difficult part was collaborating with team members to achieve our group goals for the project.
This meant reducing my own content in my paper in some places and accepting specific
recommendations on my writing, which I found somewhat difficult. Group dynamics also
became an obstacle, forcing our team to find creative ways to solve our differences.
As for my overall project contributions, I will be the main presenter of our group project.
This is a role in which I thrive and cant wait for our chance to showcase our hard work. The
individual content of each team member is wonderful, but when pieced together, the final
product will be outstanding. And I get to be the one to show it off! But the road to completion
has taught me some very good lessons. First, a team works well when individuals put their
personal objectives behind them and work toward a common goal. Second, good team leaders
are even better followers when it comes to specific recommendations and compromising. Third,
patience is a virtue. All individuals must be given a chance to provide support to the group
without receiving undue pressure or criticism. Fourth and finally, our group rocks! For the short
time we have worked together, we were a High Performing Organization. There were struggles

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and challenges, but we overcame these issues and utilized individual strengths toward a
collective goal.
I am fortunate to have had this experience and the wonderful support of my peers. Their
drive and determination empowered me to be at my best. I have already developed professional
relationships with my team members and hope to work with them again in the future. Thank you
to Dr. Arnold for making this course and group project a positive learning experience. And thank
you even more to my team members for your hard work and amazing contributions to our
project. You have all exceeded my personal expectations and made me proud to be a part of your
team.

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Ryan Maccormack
Looking back on the semester, I would first off like to say that it was indeed a very
important and eye opening class. Especially important were the new concepts I gleaned on the
nature of achieving a high performance organization, or turning around an organization that was
or is faltering. Coming from a military environment, I have often been shown only one way to do
things, one way to lead others and approach a task; the method of command and control. Our
book which we have used throughout the semester for our class discussions and the final paper,
Ken Blanchards Leading at a Higher Level introduced the idea that instead of rigid discipline
and control, one of the most important aspects of leading is to develop others, to train, and coach,
and bring them to the point where they can accomplish a task with minimal assistance and
maximum confidence. This does not mean that there is no longer any accountability, or any form
of discipline for failing to abide by the organizations rules and regulations, but rather that the
first step is no control and intimidation, but developing and learning, with discipline as a last
resort. I have seen that some of the best leaders, in the Army, both NCOs and Officers, were
those that tried the mentor approach first off. Blanchard has given some very important concepts
to apply in my own line of work, and for that I am excited and grateful.
The team which I was assigned to work with on the class project were a very different
sort from those in my unit. They come from a variety of backgrounds, and occupations, and as
such they bring a different set of ideas and values to the project. They were flexible in terms of
when we would turn in our various parts of the project, which I believe made is easier for all of
us, with our lives and schedules so busy. They also never hesitated to lend a helpful suggestion
or some advice if one of use was confused on a particular portion of the assignment, and they
certainly never hesitated to answer a question when any team member had one. So far, our

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assignment is on track, nearing completion, and from all the drafts I have read of it, it will be an
impressive presentation, the culmination of our hard work this semester. In all, it has been a
thoroughly interesting and educational experience, and I look forward to the day we present to
the class. Thanks folks, its been a good experience. Best of luck to all of us in the presentation
and the rest of the semester.

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Shawn McCurley
Creating High Performance Organizations has been a great class. I enjoyed reading Ken
Blanchards Leading at a Higher Level and Harvey and Lucias 144 Ways to Walk the Talk. Our
team projects were also very educational. I feel the team project brought everything we learned
throughout the semester together in a real world organization and I was able to see exactly how a
high performing organization sets itself apart from average organizations. Our team chose to
utilize Zappos as our organization of interest.
I was amazed how each of the areas we were assigned to evaluate were congruent with
Blanchards findings in his book. In my opinion Zappos is truly a high performing
organizationfrom its culture, hiring practices, training, vision, leaders, and many other aspects
that were evaluated. Working on this project has given us the ability to begin to look at an
organization and see it from a much different perspective. As we learned what makes
organizations high performing and how they can increase the triple bottom line, it has given me
the necessary tools and insight into the type of organization I would like to work in. It has also
enabled me to look at existing organizations with more of a critical eye and seek ways to
improve and bring them to the next level.
I was responsible for the section on the Zappos culture and the power point slides
associated with culture. Our team was an interesting mix of people. I think the energy and
enthusiasm was outstanding among the team. It is always interesting to watch a team come
together for the first time and experience the growing pains and cycles that they all go through.
We experienced all the team development stages that Blanchard outlined in his book and once
again when I stepped back and reflected on the process its amazing how everything fell in line

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with Blanchards findings and development models. It has given me more of a strategic
viewpoint and mindset to the overall project management process.
Lastly, I would like to thank the team for their flexibility and understanding when I was
unable to meet certain deadlines due to personal and professional conflicts. This semester was a
bit turbulent for me and the teams support was very helpful. The professionalism and teamwork
was inspiring!

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Konni Mergner
My contribution to the paper is the 3rd chapter Serving customers at a higher level. I
also edited and put the final touches on the power point presentation.
Reading through the assignments at the beginning of the course I was questioning if a
team paper could be done with the means we had, the short timeframe and the fact that all team
members are spread locally. I learned that within a group of highly motivated individuals work
can be shared and an excellent result can be delivered. It helped quite a lot to have learned about
leaders and teamwork in a high performing organization. Everyone chipped in to deliver the best
they could for the best possible outcome.

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Kelly Nevins
I have really enjoyed my semester in Creating High Performing Organizations. Through
the readings, class discussions and team project, I feel I have a good blueprint for what a HPO
would look like. The team project helped to drive a lot of the concepts home, from creating a
vision of what the paper and presentation would look like, to identifying team member values
and creating a team culture for getting the project done. My contribution was the chapter on
coaching, and as editor of the paper. It was not easy to play the role of editor, as I know each
person worked hard on their sections and that it can be hard to both offer, and receive advice on
how to strengthen our respective pieces.
As identified in Chapter 10 of Ken Blanchards Leading at a Higher Level, our group
definitely went through the five stages of team development. In our orientation phase, we
brainstormed ideas for our topic and settled on Zappos. We agreed on individual assignments
and deadlines. Although never formally stated, we informally selected a leader to mediate the
process as we worked together.
In the dissatisfaction phase, we learned that people had a different understanding of what
had been agreed upon. There was some storming that took place, as we identified what values
were most important to us and clarified our goals. Given the passion evident within our group
members, I feel like the storming phase passed fairly quickly and we were able to move into the
integration phase. It became clear of the individual talents each of our team members had, and it
seemed to me we really started operating as a team.
The delivery of this paper and our presentation indicates that we successfully navigated
to the production stage. I would say the quality of our project is high and that there was no

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one person who did the lions share of work. When we leave this class, the project and our
team will terminate and I for one, would like to congratulate our team on doing a great job.
The project served as a microcosm for what can happen in the workplace. We did not
thoughtfully create a values system for our team, and often values within a company are
developed organically. The book talks about how this can lead to a culture that is unhealthy, and
thus provides a prescription for how to begin the transformational change process.
My contributions to the online class discussions have highlighted how what Ive learned
from this class is being introduced to my workplace. Im most excited about launching a
discussion with our management team about our corporate values (or lack thereof). I know the
discussion will only be a small step towards creating a high performing workplace, but its a step
in the right direction. If all goes well, Ill be able to help drive more of the concepts learned in
this class over time.

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Joan Romano
This has been an extremely interesting course for me. It ran the gamut of the HPO
concept, manifestations, intricacies and evolution to reach the ultimate goal a high performing
organization. So often in our classes we read, observe, discuss and listen, however in this
course via our final project we were given the opportunity to investigate, develop and apply all
these components and the actually use them in a real life situation, building a high performance
team comprised of our classmates.
Ken Blanchard identifies five stages of team development, seeking to apply these stages
to our team dynamic proved to be an enlightening experience in many ways. The team was preselected so I was unsure of how we would function as a unit. I did know a few of the members,
having been in classes with them during previous semesters, however there were also new
comers to the course as well as to the Leadership M.S. program. That being known coupled
with the uncertainty of the skill set, contextual knowledge and most importantly personality and
commitment I could not envision the values system or the culture that our team would exhibit.
We definitely progressed through each of the stages, some more smoothly than others.
Our first meeting as a team, rather impromptu during a break from class, set the stage for the
weeks that would follow; text book would be an accurate assessment of the complexities that
surfaced, those 15 minutes were a concentrated dose of the evolutionary process which would
eventually produce an impressive final product. The model of stage one, which addresses
relationships, communication and flexibility were challenged, it was evident that a common
ground was yet to be found, eventually it was and we were all somewhat comfortable in our
positions. During the second phase we managed to agree on an HPO, our purpose, individual

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assignment responsibilities and a timeline which would eventually adjust to each team members
personal time line an issue that would require continual oversight. The third phase; team
developmental levels , was perhaps the most challenging when considering the more exigent
members of the team and the cascading effect they would have as a result. The orientation
platform introduced the personalities or characters of the team, in an unpremeditated fashion a
leader was selected to guide the mission of this collaborative cohort. The dissatisfaction stage
provided us undeniable evidence that messages were being understood on a variety of levels
and extremes, once again we rallied, reemphasized and reaffirmed our concepts and desired
outcomes. These heady interactions did not linger, we as a team moved closer to our goal and
could now be described as a more cohesive and focused unit. The fourth step, production is
where individual contributions to the team effort really took shape, each person taking the lead
on tasks wherever they excelled, yet others stepped back creating a bit of an imbalance, however
the overall contribution to the final paper was indeed a balance of all forces. The fifth and final
stage of this phase is termination, where the final paper and presentation will unfold. Although
this is considered the termination of this team, it has certainly set the groundwork for many of
these individuals as they progress through this program, they will most definitely be interacting
in the future. As for me, I will not have that opportunity, nonetheless it was a tremendous
learning experience and I will take many aspects of this process with me as I move forward, for
that I would like to thank each member of the team. If I were to describe the leadership style that
was necessary to sustain this group I would undeniably connect it to the Blanchards fourth step,
Situational leadership beyond a doubt. The requisite directing and supporting of behaviors, the
coaching as well as the delegation on some level through each phase was remarkable. The open

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discussions, the feedback, the concessions and the ultimate focus on the final paper touched on
every aspect of Blanchards theory.
There is a multitude of learning outcomes to be had from this assignment, many of
which will be useful in future classes but the purest outcome for me is in the arena which
encompasses life practice . This course which culminates with our final project has provided me
firsthand, the essential mechanisms which support the framework of an HPO.

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John Sardelli
My task within the team project was to write the first section of the paper that identified
if Zappos was a high-performing organization. As such, I completed the first section of the
paper, conducted all preliminary research, set up the initial formatting to try and help everyone
stay on point with the framework, and provided additional research tools, links, and videos for
others on the team to help them round out their papers. Additionally, I contacted Zappos directly,
first via e-mail and then in a series of phone conversations, to discuss possibly getting a copy of
their CEOs book. In the end, the company not only sent 25 copies of Hsiehs book, they also
sent another 25 of the most recent edition of their culture book. In total, it was a contribution
from Zappos that totaled $814.56. I also set up the PowerPoint template for the team
presentation, embedded videos and other content, and set up the timing and animation for the
presentation.
Working on the Zappos team project was an intense learning experience. I am used to
working in groups where if someone does not fulfill their part, the goal is simply not met and
repercussions are severe. This was not the case for this class, as it is a college workgroup where
there are no financial bottom lines at stake that could cost clients or employers millions. So, I
came into the project uncertain of what to expect and what the group dynamic would be.
The beginning phase was filled with hurdles. Many of the members had conflicting ideas and
there was significant debate about what the business topic would be and who would do what. I
feel that at times, I was initially closed-minded and sometimes felt my way was the best way. I
had to look within myself and realize that I was part of a team and realize this is no different than
a real work team that I could be working in day-to-day. In fact, there were more benefits to this
because it wasnt like anyone was going to get fired at the end and there was no client money at
stake if someone made a mistake. It was a good skill-building exercise overall. With that said I

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feel I worked hard to drop the know-it-all-attitude and accepted that I was part of a team and
valued everyone and their ideas.
What was interesting to see in the team dynamic is that we had others on the team with
the same mindset as I did at the outset and aspects of the paper were hijacked in the process as a
result. Ill be honest and say there was a little bullying at times and while I dont necessarily
agree with all the decisions that were made in the paper, it is all water under the bridge at this
point. In fact, this often happens in the workplace, so its good to be able to find ways to let go,
and go with the flow of things in a new way.
Positives that I will take away from the experience include learning to become much
more observant so I could learn more about peoples strengths, weaknesses, and personalities.
This helped me to adapt to the evolution of the paper and to help achieve our ultimate goal. Our
team and individual functions were mostly well-defined. We had several discussions that created
our vision. We used go to meeting for our communication portal and summarized our meetings
and shared the minutes via email. This was a very important tool I referred back to on more than
one occasion.
Even though I work in teams sometimes in my professional life, a lot of my work can be
solitary. As a result, Ive developed an authoritative leadership style that can be hard to break out
of at times. Much like Dr. Arnold, I often find I prefer to work on tasks on my own so I can see
the full 360 degrees of the project. Working on the team project has taught me how to zip-mylip and actually practice excerpts from Walk the Talk. Im also working hard to adapt more to
Ken Blanchards Situational Leadership approach.
I am very proud of the team overall and feel everyone worked to try and do their personal
best for the team, regardless of what dynamics were at times. I hope to work in more academic

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research teams in the future and am certain it will help to further develop my teamwork skills as
well as my leadership abilities. This project, as well as this class, have made me more reflective
and helped to begin to evolve more as an individual, leader, and team player. As a result, I feel I
have a stronger ability to create a vision and execute a goal as a leader in my organization.
Thank you for this wonderful opportunity. I will always remember it. I look forward to the
presentation as it is one of our goals to knock it out of the park.