Zappos, the famous online shoe retailer that was acquired by Amazon for $1.2B in 2009, has one of the most talked about company cultures in world. Fascinated by their unique approach to business, I wrote a profile on their culture a few weeks ago based on information from dozens of articles and blog posts. Yet the more I read, the more I wanted to know.
I wanted to learn more about how Holacracy actually works, what kinds of people thrive in a self-managing environment and how to find them, how Zappos’ life coaching program works, and what elements of their culture haven’t received much attention but are worth exploring.
I’m humbled and grateful that we had the opportunity to connect with Christa Foley, a “Lead Link” at Zappos Insights.
Before the move to Holacracy, Foley’s title was Senior Manager of HR & Zappos Insights, but in Holacracy, no one has titles or specific roles (more on that in another post). Foley spent her first 8 years at the company leading the recruitment team, which screens for culture fit based on their 10 Core Values, and for the last 3+ years, she’s worked with the Zappos Insights team, which focuses on sharing the Zappos culture with the world.
Here are some of the things we learned from talking to Christa Foley.
Hiring for Cultural-Fit Is Essential from Day One
Shortly after Zappos’ CEO, Tony Hsieh, graduated from Harvard, he started an online advertising business with his roommate called LinkExchange, which they grew to 100 employees and sold to Microsoft for US$265 million less than two years after launching. While that sounds like a tremendous success story, there was a lot of hard learning that happened in that time, and lessons that Hsieh was committed to carrying forward into his next venture.
“The biggest mistake at Tony’s first startup was to start hiring through a normal process for skills rather than culture fit,” Foley explains. “He ended up selling the company to Microsoft because at a year in, he said he didn’t like coming into the office anymore.”
Around the time Zappos was nearing 100 people—the same size LinkExchange was when his passion started to wane—Hsieh started looking more seriously at recruitment to make sure the same things wouldn’t happen again.
“That’s why we stared looking at values and fit,” Foley shares. “The best thing we did was that we made it a process with the whole company involved.
“It started with a list of 37 values that we believed in, and then Tony said, ‘Think about the people you love working with, and think about what values they demonstrate. Or maybe there are people who don’t fit—what values do they bring?’ The list was sent to the whole company, and over the course of the year, we whittled it down to the 10 values we have today.
“It’s really different when HR, or the CEO, or someone in a higher up role, says, ‘Here are our values’, without input from the employee population. What we came up with felt like something we collectively built rather than, oh, this is just a new HR thing.”
Culture = the DNA of Your Organization
There are a lot of floating definitions of what culture is. Too often, culture is mixed up with perks and benefits, but that’s not culture. As Foley put it, “culture is the DNA of your organization.”
“It’s the shared beliefs and values that you’re bringing to the very foundation of your company. When people ask me about Zappos’ culture, my answer is that our culture is our 10 Core Values.
“Our values are pretty short. It’s important that core values are actionable. Like Deliver WOW Through Service, and Be Humble.
“When Tony sent out the list, we had a really lengthy document. He went through each core value and put context around it. There are two or three paragraphs for each core value, and at the end, there are some questions to think about when thinking about that value. The more context you can give to the values, the better shot you have at living them.”
More than Implementing a Holacracy Model, Zappos Aspires to Be a “Teal” Organization
Holacracy is a method of self-organization that focuses on self-management, no job titles, a belief that people should bring their whole selves to work, and other highly progressive philosophies. It’s also just one type of self-management system, as described by author Frederic Laloux in Reinventing Organizations, which focuses on the evolution to a model he calls the Teal Organization.
“Holacracy is the thing that gets all the press for Zappos,” Foley explains. “Zappos is committed to self-organization and self-management; Holacracy is just the technology we happen to use today. I think the real thing we’re trying to get to is the concept of Teal.”
The three key principles of Teal—all of which Zappos is striving for—include self-organization/self-management, wholeness, and evolutionary purpose.
Self-Management Isn’t for Everyone
“You need people who are comfortable with ambiguity, who have a strong sense of curiosity, and who have high emotional intelligence,” Foley explains, as she describes the type of people who thrive in a self managing environment. “Those three traits are what those with entrepreneurial spirits highly over-index for. And then there’s the wholeness piece—being comfortable fully with who they are. Those are the big, important things.
“We were fortunate that all of those behaviours already existed and are things we look for in our 10 Core Values. We have a culture interview assessment that we do with each candidate before we hire them, so we did fine-tune that to make sure we were really focusing on those particular behaviours and values to make sure we were bringing on people who would be comfortable in this environment.
“Not everyone is going to be great in a self-organized environment. Not everyone wants to completely own responsibility of their work and their roles, and there’s no judgement on that. In the same way that some people don’t want to stand on stage and give speeches, that’s just something they’re not comfortable with. Some people really prefer a manager guiding them and directing them, and some don’t.
“In our screening process, we’re trying to identify people who have the capacity to be really self-driven. It’s not to say that we don’t mentor people here and that everyone’s on their own island, because that’s not it, but it really puts the authority back on every single role for people to energize, and that’s the critical part of it.”
The Power of Screening through Values
“Since our core value creation, we’ve built out our culture interview screening process,” Foley explains. “Basically we went through and took each of our core values, and came up with 10-15 behavioural interview questions that really get at Deliver WOW Through Service, or Be Humble, or Create Fun and A Little Weirdness.
“Most of them are pretty standard interview questions, but I think what makes the interview work it that it’s a completely separate interview from the hiring manager (now called a Lead Link in Holacracy language). The hiring team is looking at the person’s skills and experience—can they do the job that they’re being hired for—versus the recruiter is only looking at fit within our 10 Core Values.
“As we go through the culture interview, we’re looking for red flags that might pop up, where someone isn’t in alignment, or doesn’t share the same values as Zappos.
“Even if we found an amazing software engineer, who was the like the god of all software engineers in coding, if they don’t pass the culture interview, we will not hire them.
“It’s not that one hire of someone who’s not quite in alignment with your culture is going to kill your culture, but once you open that door to making concessions for people because you’re so focused on their skill set, that’s when you’re going to wake up a year later and be like, ‘Okay, we’ve totally shifted our culture because we didn’t pay attention to the importance of hiring people who are going to match.’”
Zappos Wants Everyone to Bring Their “Whole Self” to Work
“We don’t have a dress code, and you can put whatever you want at your desk,” Foley explains. “If your thing is Minecraft, go crazy with Minecraft. If you’ve got five kids, and you want your kids all over, or if you have piercings, if you have tattoos—none of that impacts your ability to do your job. If you’re forced to work somewhere where you have to hide any of that, or not show that, you’re not bringing your whole self to the company.
“That’s also why we added things like the Zappos choir, and the Zappos dance team. When we have company wide events, or we do community events, those groups might perform at those different things. It’s about thinking of your employee as a whole person, and finding creative ways to let them bring their entire self to the job.
“It just makes your employees that much happier. It sounds cliche, but a happy employee is going to work better, work harder.”
Full-Time Life Coaches Help Team Members Reach Wholeness
As we previously wrote about, Zappos has a fleet of in-house life coaches available to staff to work on any personal or professional goals. After learning more about the company’s emphasis on wholeness, the initiative makes a lot of sense.
“I think it’s in alignment with our philosophy of work and life being combined, and the idea of wholeness, and that you want your employees to bring their full selves to the job,” Foley shares.
“That’s kind of where the life coach idea came in too: if you want to get the employee to bring their whole self to the job, you can’t expect them to walk through the door at 8 in the morning and shut off thoughts of, ‘I’m stressed about buying a house. I’m stressed about losing weight. I need to save money.’ That’s something that’s part of who they are, and always going to be at the back of their minds, so the life coach is really meant to be there for whatever the employee needs.
“Our life coaches are not psychiatrists. They’re not doctors. The intent isn’t that they’re going to solve the problem for the person, it’s just someone to help them figure out the underlying goal or tension they’re having, and working through goal setting with them in a 30-day process to help make progress toward whatever it is they want to make progress towards.
“We’ve now had people from all departments go through the programs, and it’s almost like another benefit. I think most companies just think about medical, dental, vision, and then we’re covered, but your employee, again, is much more than that. I think it’s an extended benefit that companies could easily offer at a fairly low cost.”
Giving Back to the Community Is a Huge Part of the Zappos Culture
Zappos is headquartered in Downtown Las Vegas, where the company is actively engaged in various charitable initiatives.
“Because we sell shoes, we do a lot of events with underprivileged kids where we’ll give them free shoes and do fittings for them,” Foley explains. “Those are really fun. We also do a lot with the food shelters down here. We’ve done events with veterans. And we do community events. We have a full charity team and we also have a full community events team. Honestly, sometimes t’s hard to keep up with what events are happening because there’s something almost every week.
“We had a zoo on campus once to raise money for a local zoo that was going under, and we had a ton of turnout from the community. You never know what you’ll see when you walk into the office. It’s funny, because if you’ve been here for a minute, you’re like, ‘Oh there’s a llama… there’s a zebra.’ It’s like, ‘Cool! What’s happening today?’”
Holacracy Helped Zappos Finally Bring Pets into the Office
Prior to Holacracy, Zappos wasn’t a pet-friendly office. There were too many logistics, and the idea had been shut down. “In the past we would start talking about it, but there’s some real issues you need to think about as a business if you’re going to allow it,” Foley notes. “Are people allergic? There’s different things you have to think about.
“One of our employees who started in our call centre was really passionate about it after we launched Holacracy, and he just worked through the process of Holacracy to figure out: okay, what are all the concerns? And he come up with solutions for each of them. So we’ve designated floors now where you’re allowed to have a dog with you in the office, and it’s been great. Employees love it.”
Focusing on Culture Allows Immense Freedom for Creativity
Foley noted that a lot of Zappos’ culture has been covered by the media, and that Tony Hsieh’s 2010 book “Delivering Happiness” also shared a lot about how things work at the company, but she did note that the reason she is still there, and why she’s liked working there for the last 11 years, comes down to creative freedom.
“I think an under-appreciated, or an under-spoken part of working at Zappos, no matter what position you’re in, is how focusing on culture at your company allows every employee to be super creative in what they’re doing.
“When I first started, I was overseeing recruiting for the first seven years. When we were small, I was interviewing five people a day. Every job has some part of it that’s rote or routine and boring, and at some point, you’re tired of doing it, but I’ve never felt that at anything I’ve done at Zappos because our values are such a part of the way we operate the business.
“I’ll give an HR example. Even if we’re going to send an email to let the company know that we’re having flu shots, we’re all asked to think about how to make that feel like Zappos, and that Zappos voice. When our benefits manager sent that email out, it caught everyone’s attention because Twilight books were big at that point, and her email subject was, ‘How do you know if you have the flu, H1N1, or you’re vampire?’ She gave the information that the employees needed to know about, like where to get their shot, but she did it all in the context of: these are flu symptoms, these are H1N1 symptoms, and then, do you sparkle in the sun?
“It’s not only the ability, but actually the pushing of people to really infuse whatever they’re doing with our culture that makes it so much more interesting and fun and creative. I think that’s the thing that maybe doesn’t get much attention about our culture, but I think our employees would say that’s one of their favourite parts.”
Zappos Finds Inspiration from the Cultures at Netflix, Southwest, Medium, and Google
As an influential pioneer of modern culture, I was curious which companies or leaders Zappos turned to for inspiration, or which other companies they thought were doing cool things. I was pleasantly surprised with Foley’s answer:
“I think Tony and anyone at Zappos would say we steal shit from everybody. When we hear of a company doing something really cool, we’re like, ‘Oh, we should think about that.’ And we might tweak it and make it fit Zappos, but we’re big on, ‘What are other companies doing?’ We’ve always had the attitude that there’s no competitor for culture. Anything that makes the workplace better for any company is better for all of us.
“We’ve taken things from Netflix. I think they have a really good culture, and really good focus on it. Southwest Airlines we’ve met with a lot. We’ve talked with the people at Medium. I think Google has a great culture.
“Everyone’s going to have a different culture. We had about 20,000 people tour Zappos last year. With Zappos Insights we do training about how we hire for culture-fit, so we have a lot of companies that come in to learn from us, and we always say, ‘Our intent isn’t to make mini Zappos’. We’re not trying to say you should be what we are, and have our values.
“Our values may work for us, but we’ll have a bank come in, or a government agency, and not every business can do what we do at Zappos, but that’s not the point. The point is to figure out what you want your company’s values to be, and include your employees in that process if you can, and then really just stick to them.
“Sometimes when people want to interview or talk to us, I get a bit self conscious, because we haven’t done anything that’s rocket science. It’s about applying common sense and a focus on people in your business. If you think about it that way, it’s really not that hard. It’s just a shift from how many traditional businesses operate, so it’s a bit of mindset shift.”
On the Future of HR
It’s clear Zappos does things differently. They’ve rethought essentially every role at their company, including their human resources department.
“HR is all about the people, and how do you make that shift? Obviously there are true, valid HR things you need to know about, worry about, and pay attention to, and there’s legal things along with that. That doesn’t mean you can’t be focused on your people and on your culture.
“The HR world is the way it is because not everybody is going to make the right decision. Not everybody is going to do the right thing. That would be a utopia that doesn’t exist. But if you figure out how to hire the right people, then you don’t need all those HR policies and regulations to control your population, because you’ve hired people that you trust and can train, and believe in.”
For more on Zappos’ culture, and Foley’s conversational thoughts about the evolution of the workplace, follow her on Twitter: @electra.