"At Zappos, we really view culture as our No. 1 priority. We decided that if we get the culture right, most of the stuff, like building a brand around delivering the very best customer service, will just take care of itself.” – Tony Hsieh, CEO of Zappos
While you may know Zappos as an online retailer, chances are you’ve also heard of them because of their culture. Since Tony Hsieh’s book Delivering Happiness: A Path to Profits, Passion, and Purpose detailed the Zappos story, they’ve become legendary.
A helpful way to think about culture is like your organization’s personality. According to culture theorist and Professor Emeritus at the MIT Sloan School of Management, Edgar Schein, culture encompasses what organizations say about themselves (espoused values), what can be observed (cultural artifacts), and the tacit (or taken for granted) assumptions that drive behavior.
Unlike technology and strategy, which can sometimes be more easily copied, culture can create unique competitive advantage. Culture also enhances productivity and engagement, according to Sunny Grosso, Coaching & Culture Chief with Delivering Happiness, Zappos’ culture consultancy. And with 87% of the world’s workforce disengaged, equating to productivity losses as high as $550B in the U.S. alone, the business case for enhancing culture is compelling.
Culture is also critical for talent attraction. According to research conducted by Milwaukee-based start-up The Good Jobs, 71% of survey respondents report that salary and culture are equally important when thinking about their next job, and 26% report that culture is actually more important than salary.
Here are three on point ideas we took away:
- Start with values. Whether you’re shaping a new culture or re-shaping a mature one, values underpin organizational systems and drive behavior. According to Brad Wolfe, Culture Architect with Delivering Happiness, systems related to talent acquisition, performance management, leadership development, and compensation, are key to intentionally crafting culture. To create competitive advantage, values should be unique and more like guidelines versus hard-and-fast rules, according to Grosso. As it relates to Zappos, as described by Tony Hsieh in 2010, "We believe that it's really important to come up with core values that you can commit to. And by commit, we mean that you're willing to hire and fire based on them. If you're willing to do that, then you're well on your way to building a company culture that is in line with the brand you want to build.” As you think about your organization’s values, how aligned are they to your people processes and systems? How distinguishable are your values from your closest competitors?
- Learn from the science of happiness. Part of what makes Zappos’ culture unique is their focus on happiness – for both customers and team members. Research has shown that having a sense of progress, control, and connectedness, correlates with happiness, according to Grosso. Zappos embeds these aspects in their culture by creating career paths with more frequent promotions, giving employees significant latitude in how they do their jobs, and creating an environment that encourages connection between team members and the organization. Zappos has also embraced additional “happiness habits” including: mindfulness, flow, optimism, altruism, and gratitude. As a leader, how might you foster a greater sense of progress, control, and connectedness with your team members? What small changes might make a big difference to your organization’s culture?
- Connect with purpose. Purpose and culture reinforce each other, creating a kind of virtuous cycle. When organizations and teams feel connected and aligned by common purpose, culture is strengthened. Individual leaders frequently consider purpose when seeking to optimize their leadership, but these insights aren’t always shared with others. According to Betsy Rowbottom, Co-founder & Chief Culture Officer with The Good Jobs, “It's great to know your own higher purpose, but you strengthen the culture when you understand the purposes of your colleagues.” How might discussing purpose strengthen your relationships with peers and team members? Could a better understanding of purpose help you achieve more as a team?
To create unique competitive advantage and deliver more, start with culture.