In an interview for a recent Business Week article, Zappos CEO Tony Hsieh described the source of the company’s exceptional performance and increasingly legendary customer service:
Ask Hsieh to describe his secret sauce, and he’ll tell you that much of Zappos’ success comes down to the company’s culture and the unusual amount of openness he encourages among employees, vendors, and other businesses…
If we get the culture right, most of the other stuff, like the brand and the customer service, will just happen. With most companies, as they grow the culture goes downhill. We want the culture to grow stronger and stronger as we grow.
Hsieh understands that another name for CEO is Chief Culture Officer. When culture is built and protected deliberately by the CEO — as it is by Hsieh, who embodies the values he wants Zappos to compete on, including transparency and excellence — culture sets the stage for a company to thrive. As Steve Kaufman, a dear friend and colleague who used to run Arrow Electronics, likes to say, “culture eats strategy for lunch.”
Culture drives the millions of invisible choices that aren’t covered in the strategic plan or employee handbook and would be silly if they were, norms and attitudes like unfailing respect for customers and pride that’s linked to group performance. Culture manifests visibly too, of course, often by leaders who do whatever it takes to defend it. In Zappo’s case, this means that all new hires who complete the introductory training are offered $2,000 to walk away. People who are the strongest fit with Zappo’s culture don’t take the money.
But culture is the strong, sensitive type. For all its power, it reacts strongly to neglect. When culture is not a high priority for CEOs — which is often the case — culture can lose its swagger, show up unevenly across business units, and quickly stop being a source of competitive advantage. In today’s economic climate where customer retention and customer value are increasingly vital, excellent service will be a differentiator. Tony Hsieh is a powerful reminder of the role that culture and its stewards will play in that journey.