Zappos Fires the Misfits

Discussion
Dec 09, 2010
Tom Ryan

By Tom Ryan

At a recent Conference Board event, Tony Hsieh, CEO at Zappos,
indicated that fifty percent of the online retailer’s performance review criteria
measures how an employee is furthering the company’s culture. That work
culture at the company’s Las Vegas offices may include a Dance Revolution machine,
free popcorn and free books greeting visitors in the lobby.

"We are completely committed to our core values, which we call the 3Cs
— clothing, customer service, company culture — to the point where not following
and contributing to them is reason enough for dismissal," said Mr. Hsieh
at the event, according to Vault.com. "This commitment gives our employees
strict direction to follow these values even outside their work profile."

He
further indicated that that’s why Zappos provides every new hire with five
weeks of training. "If you’re not a good fit, you don’t make
it to the end of those five weeks," he said.

According to an article published
last year in the Las Vegas Sun, Zappos’
offices feature an open workplace without cubicles or offices (even for Mr.
Hsieh) that encourages a "relaxed, fun-loving and close-knit family atmosphere" with
a focus on freedom and individuality. Customer service reps aren’t required
to follow scripts or have limits on how much time they spend on each customer.
It also features an extraordinary level of transparency as live streams of
all-hands meetings are accessible to the public.

But the liberal workplace climate
also includes free lunches, a nap room, video games, rainforest decorations
that hang from the ceiling, regular costume parties and parades, and decorations
in each department. As part of daily company tours given by select Zappos employees,
each department has its own theme and greeting for tour takers. The article
notes that one department consisted of a row of Elvis impersonators, another
featured workers mimicking cheerleaders replete with pom-poms, and one row
known as Area 52 featured "creepy voice-altering
megaphones."

Mr. Hsieh told the Sun, "We take a work hard,
play hard approach. While we do have a lot of fun, we also have high expectations
in terms of performance."

Discussion Questions: What are some sound ways for a company to establish
and preserve a dynamic working culture? Do you think cultural mismatches
should be grounds for firing? At what point does it cross the line into unfair
discrimination?

Please practice The RetailWire Golden Rule when submitting your comments.

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17 Comments on "Zappos Fires the Misfits"


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David Livingston
Guest
10 years 4 months ago

One of the best ways a company can establish a dynamic working culture is to make sure everyone fits into the culture. A mismatch in culture is most certainly a good reason to fire someone. I believe a company should be able to fire anyone at any time for no reason at all. There is no such thing as unfair discrimination. An employee is like a guest in your home. When you don’t want them there anymore, you ask them to leave.

Bob Phibbs
Guest
10 years 4 months ago

Culture is everything because employees are your most important asset. And I get that many find Zappos the most wonderful brand out there… but it’s an office.

It has no stores, customers are all pre-qualified from the web.

Truly, how hard would it be to have an exceptional crew in such a closed society?

Don’t get me wrong; I wrote about them paying people to quit two years ago but come on, how about touting a company like Lululemon that has to be exceptional in dealing with customers who are not pre-qualified, who just stop in, who have to learn a story about the brand?

Fabien Tiburce
Guest
Fabien Tiburce
10 years 4 months ago

The company culture sounds great…on paper. Company culture is powerful source of inspiration and regeneration for any organization. You want your employees to be family, to stick together, to have a common end goal. You need to do anything you foster that. But even the sweetest pill ain’t so sweet if it’s forced down your throat…Talent comes in different forms and range of personalities. I hope the company policy recognizes that.

So while Zappos’ company culture looks great on the “outside,” working at Disneyland may not as much fun as just visiting.

Ian Percy
Guest
10 years 4 months ago
Fabien has it right. We have to first decide if “culture” is a mechanistic manifestation or a spiritual/energetic one. I believe it’s the latter. Culture is a belief system, an outward expression of the heart, intention and inspiration of a group of people. Having a “policy” on culture is an oxymoron. Furthermore very little of the actual culture is under the control of executives any more than the weather man is in control of the weather. Some people’s world-view is totally incompatible with a totally open unscripted environment; they are literally a fish out of water. Of course you want to know that before you hire and train them. It goes the other way too–some people seem to need a tightly controlled environment and will flounder in a world without walls. What we need to do is take the judgment out of it and simply ask: “Is your culture helping to produce the results and market position you long for?” The two key ingredients for cultural success are: FIT and FLOW. It’s all about fit… Read more »
James Tenser
Guest
10 years 4 months ago

Mr. Hsieh’s exclusive workplace culture is not for everybody. The “keepers” apparently are willing to throw themselves into their jobs, and have low inhibitions regarding the wearing of costumes and other communal silliness. All of which is OK if it delivers happy customers and profits. I don’t see this as a model many firms can or will emulate, however. It’s too idiosyncratic and unlikely to scale well.

Mel Kleiman
Guest
10 years 4 months ago

A company’s culture can be equated to a person’s personality. Just as your personality determines who you are, what you values have, how you relate to others and the things you like to do; a company’s culture determines who the company really is and how it acts in relationship to its customers, its employees, and its community.

If you want to build a strong organization you need to make sure that the people you hire have a personality/cultural match.

The question was posed – can you or should you be able to fire someone when there is not a cultural fit? When you hire someone who does not fit your culture/values most of them will quit but if they don’t then you need to terminate them.

Bill Emerson
Guest
Bill Emerson
10 years 4 months ago

The culture of a company is, in my experience, one of the main determinants of its success and longevity. While others may disagree, I believe this is the primary responsibility of the CEO. As an example, think about replacing Tony Hsieh with someone with a different view of how a company should be operated, say Bob Nardelli. Do you really think Zappo’s would continue on with its current success? That’s not to say everyone should operate like Zappo’s. Just that they have found what so far is a winning environment.

Jonathan Marek
Guest
10 years 4 months ago

The fact that the Zappos company culture isn’t for everyone is right… but it doesn’t matter. It works for them, in their business. It is an important part of their profit model – attracting, retaining, and motivating the right types of employees for their particular business.

The broader point is that company culture is economically important and takes a concerted effort to maintain. And it’s hard in a brick-and-mortar environment. Emulating the specifics of Zappos isn’t the answer. Finding your own specifics that work for your own business is the answer.

Anne Howe
Guest
10 years 4 months ago

A wide open culture is a wonderful thing, especially when it can scale the way Zappo’s has. I agree that cultural fit criteria should be a part of an employee performance evaluation, especially when service is one of the most important core deliverables of the brand. An employee that can’t deliver on a core brand pillar is going to be happier elsewhere, and oftentimes a dismissal is a blessing in disguise for the misfit.

Read my recent experience with three employees of Zappos.com who unquestionably over-delivered on their core brand values. I applaud Tony for clarity, bravery and success. He is a different kind of leader, but a leader that many can learn from.

Rick Myers
Guest
Rick Myers
10 years 4 months ago

Is it inappropriate to say what happens in Vegas stays in Vegas? I know that if I walked into work with an Elvis costume on people would think me a little strange. Requiring people to dress in costume at work would not work for me. I think it takes a special kind of person to like that sort of thing, and it doesn’t necessarily mean that they work harder or more effectively. In the end it’s getting the job done and producing profits that matters to companies. But then again I would know the culture is a bad fit for me, and I wouldn’t feel comfortable working there. I assume that you would know that going in.

Kevin Graff
Guest
10 years 4 months ago

Rather than shoot holes in the Zappos approach, I’d rather try to learn from them and figure out what they are doing so well to create raving fans (both staff and customers), and then try to apply that to retail. The reality is that few retailers have any true identifiable culture for either staff or customers. Ask any employee what their company stands for and most will stare at you blankly. Ask them what their core values are and they’ll respond with “Huh?”.

To the question, “should you fire someone who doesn’t fit your culture?”, the answer is YES (providing you can tell them what your culture is supposed to be in the first place).

Bill Hanifin
Guest
10 years 4 months ago

Establishing a distinct and identifiable corporate culture is much discussed, but seldom well executed. It’s interesting that most examples of establishing a tangible corporate culture are found in the online and technology world.

It is generally valid to expect employees to adopt and foster the culture with the balance being that the culture has to be fully exposed and explained just as Zappos does in its 5 week training program.

The interesting challenge is how to create the asset that Zappos has in other, more traditional businesses. How would Bank of America, Sony, or Ford “version” the Zappos model to create business value while maintaining a compatibility with their brand? That is the tougher question to answer and should be on the agenda of CEOs in each of those enterprises.

Robert Straub
Guest
Robert Straub
10 years 4 months ago

Call me a cynic but when I read that a company stresses freedom and individuality, the first thing that pops into my head is how much flair are they expected to wear? And, yes, I did work at TGI Fridays way back in the day so my cynicism is well earned!

Craig Sundstrom
Guest
10 years 4 months ago

I’ll confess I’m not a Zappos groupie, of which, it appears, there is an abundance, so I’m a little hesitant to criticize what I frankly don’t “get”; it seems to work for them, so fine. But there’s always a problem with what can be fairly described as eccentric “cultures” in that they often become so wrapped up in building the “means” that they ignore the “ends”; and there’s no better way–or worse way really–to ensure your doom than by being shut off from outside influences: “fitting in?” sure, but diversity can help to…remember what Santa learned from Hermie and Rudolph: misfits have a place too. Happy Holidays!

George Anderson
Guest
10 years 4 months ago

To Bob Phibbs’ point, Lululemon is an interesting example of corporate culture at work. Run an article search at the top of the page and you’ll find our coverage of the chain from June 2007 through September of this year.

Ed Rosenbaum
Guest
10 years 4 months ago

Zappo’s gets it…the Customer Service thing. Of course any company should have the right and, in fact, the cast iron set of kahunas to fire anyone not adhering to the company culture.

I don’t even know why this qualifies as a discussion question. This is absolutely black & white to me. Why would anyone want to retain and pay someone not adhering to the culture of the company? Especially a company like Zappos who believes the customer is first and foremost the reason they are there. Heck, Donald Trump does it every week and before he hires the person who does not fit his corporate culture.

George Whalin
Guest
George Whalin
10 years 4 months ago

I am a long-time an admirer of the Zappos way of doing business. By evaluating their people based on how they fit into and adapt to the company culture Zappos has built one of the Internet’s most successful retail companies.

By talking with anyone who has hired and managed employees you will learn there is one compelling reason employees either leave on their own or are terminated. That reason is an inability or lack of desire to fit into the company culture. Retailers could significantly reduce the high cost of employee turnover by taking steps to hire people who better fit into the company culture. They could also improve overall job satisfaction by evaluating their people to determine how they are fitting into the company culture.

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