October 29, 2012

Christa Foley — Secrets of Zappos Culture

“If you have a culture that creates an environment where employees can be themselves, where they’re encouraged and inspired to grow, to be creative, to always be learning, you’re going to attract top talent. You’re going to have a lower turnover. You’re going to have inspired and happy employees.”

Christa Foley
Senior Human Resources Manager at Zappos.com

Zappos.com is famous for having a unique culture that inspires uncommon loyalty and spirit among team members.  I spoke to Christa about what culture means and how Zappos Culture has helped to make Zappos one of the most successful online retailers in the world.

Key takeaways:

    • Culture is the values and beliefs of an organization that guide behavior.  Culture is not a poster on the wall.  It is the values and beliefs of team members as shown by their behaviors every day.
    • Zappos Culture is a competitive differentiator.  Zappos competes by offering great customer service.  The best way to offer great service is to have team members who are excited to come to their jobs every day.  Zappos gets its people excited and doing their best by having a culture that people love.
    • Creating a strong culture requires commitment from all levels of the organization (and especially from the top).  While creating a strong culture requires input from everyone, all eyes are on the leader.  If he or she doesn’t walk the talk, no one else will either.
    • Anyone can influence the culture of an organization.  Start small.  Even if you are not CEO you can influence the culture of your own group.  Your positive example will spread throughout the organization.

Say “Thanks!” to Christa by sending a Tweet!

Follow Christa on Twitter here.

Christopher:  Hi, I’m Chris F. Harvey, in Saigon, Vietnam. With me today is
Christa Foley, Senior HR Manager at Zappos.com, in Las Vegas, Nevada.
Zappos is famous for having an incredible culture, where people not only
love coming to work, but they produce amazing business results. And Christa
is here today to share a little bit of the Zappo magic. Hi, Christa.

Christa:  Hi. Thanks for having me.

Christopher:  Great that you could make it today. So my first
question is about culture. I think a lot of people use that word, but have
different meanings to it. How do you and Zappos define culture?

Christa:  Culture for us really is defined by our ten core values.
You can find them on our website. They’re plastered all over the Internet.
And they include things like “Deliver WOW Through Service”, “Be Humble”,
“Create Fun and a Little Weirdness.” And so, when you take all of them
together, they’re really the foundation of the organization.

It’s really the guiding principles for how we run our business. We hire
based on them and we train based on them. We conduct performance reviews
based on them, and we actually fire people based on them. And so, I guess,
if I was to sum up what our whole culture would be, it would be work hard,
play hard. But it’s really all ten of them together that comprise what the
culture is. And I think everyone’s culture can be different. It doesn’t
have to be what ours is. It works for us and that’s great. But
just making sure that a company commits to whatever it is they feel is
right for their organization. And if you commit to it in all of your
business processes, that will give you a really strongly defined culture.

Christopher:  Okay. I hear you talking a lot about values, like be a
little weird, have fun. So would you say values is what makes culture?
Having values and following values?

Christa:  I think so. I think it’s a shared vision of a philosophy, really.
Yeah, call them values, call them guiding principles, best practices,
whatever you want to call them. But having a shared vision of them and
really incorporating your employees into that shared vision so that they’re
equally responsible for it is, I think, really key in having a defined
culture.

Christopher:  So a common set of beliefs and values that you follow, and
put into business processes. That would be your definition of culture?

Christa:  Yeah.

Christopher:  Okay.

Christa:  Thank you. Good recap.

Christopher:  Why is culture important to Zappos?

Christa:  I think there are lots of reasons. I guess, the two main ones
would be, if you look kind of from the business side, and Tony says this a
lot and I’m sure he says it in “Delivering Happiness” too, but we’re really
like, your culture and your brand are two sides of the same coin. So it’s
really hard to control your brand and public image of your brand.

What you can control is your culture and your internal organization. So if
you focus on that versus, maybe, all of the glitzy kind of PR marketing
side, if you get the culture right, then your brand is going to follow that
too, and that’s going to make a huge different in terms of how the
customers perceive you and the success of your organization.

And then, I guess, the second big reason for us, would be that if you have
a culture that creates an environment where employees can be themselves,
they’re encouraged and inspired to grow, to be creative, to always be
learning. You’re going to attract top talent. You’re going to have a lower
turnover. You’re going to have inspired and happy employees. And from us
being a retail organization, inspired and happy employees certainly leads
to making it easy for our employees to wow our customers and help us build
our brand from that perspective too.

Christopher:  I like what you said about how culture leads to… shapes
your brand. And the Zappos brand, what you guys… Your competitive
differentiators is all about service and differentiating on that, and so
you can’t supply that unless you have that foundation of culture.

Christa:  Right.

Christopher:  On top of it, I’d like to say that culture, who you are is
your brand. You can’t fake it.

Christa:  Yep.

Christopher:  And that’s…

Christa:  Exactly.

Christopher:  …rooted in culture. Okay. Great. So here’s a personal question
for you, Christa.

Christa:  Okay.

Christopher:  In Tony’s book ‘Delivering Happiness’, there are a few
chapters where they talk to employees, and Christa F I figured was Christa Foley.

Christa:  That’s me.

Christopher:  Yeah, who was from Vermont, and I’m from
Vermont, I noticed that. And it said that you did recruiting for, I
think it was executing recruiting for years. And you were…

Christa:  Yeah, I worked in the staffing industry, so agency recruiting.

Christopher:  Yeah, agency recruiting, and you were totally burned out. You
were looking for a new opportunity to move away from Texas. You took this
job at Zappos almost on a whim, but you found that when you came to Zappos
they wanted you to do recruiting and you were kind of like, “Ugh.” But then
after you got used to the culture, you loved it, you loved recruiting. So
what happened?

Christa:  I think a couple of things happened there. One, this is the first
time that I’ve worked somewhere where I 100% believe in the organization
that I’m recruiting for. If you’ve ever had to hire someone and you’re in a
situation where you’re not 100% sure about the company, or maybe the person
has the right skills for the job but you don’t think the company
environment is going to be super great for the employee or the candidate,
that’s a really tough position to be in. It kind of put you at odds with,
“What’s the right thing to do here for all parties versus what’s the right
thing to do for the customer.”

Christopher:  Sorry, so you mean like trying to sell someone an opportunity
that you’re not sold on yourself?

Christa:  Exactly. Exactly. And, certainly, at Zappos, I recognize how
lucky I am to be here and I think all employees feel the same way. So
there’s nothing like talking to an employee or I’m sorry, a candidate, and
talking about a position that not only are they going to be great from a
skills perspective, but they’re really going to like it here. I think it’s
really important that people realize it’s not just what’s great for the
company, but there are two people in this mix; it’s the company and the
possible employee, so you need to look at both sides. So that was huge for
me. The fact that we consider both, that we consider the whole package of
the candidate to make sure that they’re a good fit with the organization.

And then secondly, honestly, I think every job has some aspects that are
routine or, dare I say, boring or monotonous. Recruiting is and can be a
grind. It’s repetitive work; it’s constant interviewing. And if you don’t
feel passionate about what you’re doing, that can really lead to burnout,
and I think that’s kind of where I was when I joined Zappos. And so the
difference at Zappos, one of the main differences really, is one of our
core values, which is to be adventurous, creative, and open-minded. Every
day since I’ve been here, almost over eight years now, I’m pushed every day
to figure out how to innovate the recruiting process, bringing new things
to the table, how to make it a good experience for the candidate, how to
make it fun for the candidate, and make sure that we’re getting the right
match on both sides. And that creativity makes sure that there is no
element of boring-ness to the job. It’s constantly new; it’s constantly
refreshed. And I think anybody would want that in whatever role you have,
to have that opportunity to be creative and be innovative and do something
new.

Christopher:  So I’m hearing two themes here, Christa. One is you’re on a
mission, and you really believe in what you’re doing, and you believe in
bringing people into the organization who are going to thrive there, add
value to them, and they’ll add value to the group as well. That’s the first
thing I heard. The second thing is, the values and culture at Zappos allow
you to be creative and do different things in recruiting that… I’ve done
a little recruiting myself and you can be straight-jacketed sometimes.

Christa: Yes. Yep.

Christopher:  And being empowered to do that is also a lot of fun. Wow, and
I can hear the passion in your voice too, it’s great.

Christa:  Yeah.

Christopher:  And it’s fun to spend time with passionate people. There’s a
deficit of passion in the world, I think. And I think that’s why people are
attracted to organizations like Zappos.

Christa:  Yeah, especially at work. You’ve got to figure out how to have
fun at work and how to be inspired at work, otherwise it is totally just a
grind. It’s just the hamster running in the cage.

Christopher:  So what are some of the ways that Zappos encourages having
fun at work?

Christa:  Gosh, we do a whole bunch of different things. It’s funny,
because one of our core values is to create fun and a little weirdness, and
that actually was one of the most contentious core values back when Tony,
in 2004, originally sent out just 37 different concepts to all employees to
take a look at when we were developing our culture and our core values. And
I think people thought it was a little quirky. They weren’t sure if it made
sense form a traditional business environment. But, like we’ve been talking
about, you have to have fun at work. You can’t take yourself too seriously.
And so that’s, for sure, one of most favorite and, I think, probably one of
the most noted core values that we have. It’s finding the right balance of
working hard and playing hard.

One of the things we do is that when new hires come on board, everybody
that we hire goes through a four-week training program, regardless of the
level of position that they’re in or what department they’ll be working in.
And part of that class is to teach people how to, what our philosophy is
towards to “wow customer service”. People actually will take two weeks of
calls after they’ve learned how to use our systems, so they really get
front-line experience for what our expectations are for service. But the
other big piece of that class is making sure that people fully understand
what our culture is and what our core values are, so we really dive deep
into each of the core values and really make it clear to employees what our
expectations are for each of them to be empowered and involved in the
culture. I don’t think you can have culture where it’s coming just from
your CEO, and it can’t come just from HR, otherwise it’s not received well
by employees and it’s really not a true culture, I don’t think. So by the
time employees leave this class, they understand that they’re responsible
as well, for the growth of our company and our culture as we grow and get
bigger.

So, we let people know, if you have a fun idea, if you want to do a parade,
if you want to set up a hiking challenge and get people involved, do it.
We’ll help you with the resources. You don’t need anyone’s permission to do
that. And, again, I think when people feel passionate about what they’re
doing, not only their work, but they feel like they incorporate other
aspects of their life that they’re passionate about into their work. Then
people have fun, they have a good time, they connect with their employees,
and overall, it just elevates the whole atmosphere and innovation ability
of the organization.

Christopher:  I’m a big believer in having fun too, and that was one of the
things that we did a lot when I was a CEO of my old company. But I did get
push back sometimes, and it was… Halloween, now  I love
Halloween. It’s my big thing. Some people would have decorations. The sales
team hung a mannequin by its neck and put a sign on the mannequin that
said, “Didn’t reach target,” which I thought was brilliant. It wasn’t even
a manger; it was the sales team that did that.

Christa:  [laughs] Right.

Christopher:  But some people said, “Oh, well, people take time to create
these decorations. They should be working.” What would you say to that?

Christa:  I say if your culture is really important you, you need to build
time into the work schedule to allow for culture. We have a philosophy, I
guess, we call an 80/20 rule, where 80% of employees should be focused on
their job and their tasks at hand, but 20% of the job, or the time at the
job, should be focused on culture, on learning, on growth, on development,
on team building. We actually require our management team to spend 20% of
their time doing team building activities with their groups, so they
connect with them. I feel like when you stop looking at your co-workers as
co-workers, and you start thinking of them as friends or family, I think it
makes a huge different in the way that people collaborate and how they work
together.

To be clear, we’re not a cult. Everyone doesn’t love everyone. We don’t
skip through the halls holding hands. But there’s mutual respect, and I
think the way you avoid concern or pushback about the fun piece of it, is
making sure that it’s built into your business model, and making sure that
employees understand it’s a privilege, they’re responsible for owning it,
and they’re also held accountable if it gets out of hand.

Christopher:  And I understand that sometimes someone could be doing a
great job, but if you feel they’re not a cultural fit, you will ask them to
leave?

Christa:  Yes. Yep. It’s important to make sure that you have people in the
organization that are onboard with the culture and help, and demonstrate it
in everything that they do. We cover ourselves, I think, from a legal
perspective by from almost the first touch-point that we have with the
candidate, they get a list of our ten core values, and it’s not just the
phrases themselves, but it’s a paragraph or two paragraphs for each one
where we really dive into what the expectations are and what we’re all
about. Our performance review process is 50% based on culture assessment
and 50% based on performance assessment.

Christopher:  Wow. 50% on culture?

Christa:  Yeah. So there’s no surprise. We don’t hide the fact that culture
and fit with culture is important. People grow; people change. Some people
grow and change away from being a strong fit here. We have those
conversations with people, and if we feel like someone is not a fit, even
if, as you mentioned, from their performance side, they’re doing really
well, we will take steps to help them exit the company. It’s not a good
match for anyone. And we’re willing to take what some people in HR or legal
might feel is a risk; because we feel it’s really important to make sure
that you maintain the integrity of your culture.

Christopher:  So this would be an example where you incur costs or pain to
follow your values and do what you think is right?

Christa:  Yeah.

Christopher:  Okay.

Christa:  Yep, for sure.

Christopher:  Do you think culture spontaneously arises in an organization?
Or does it need to be created by somebody and/or maintained, even if it
does spontaneously arise? What do you think?

Christa:  I think it’s yes and no. I think it’s a combination of those
things. I think there has to be some thoughtfulness behind culture. I think
in a small, maybe, start-up organization culture can just spring naturally,
but beyond that, and if you haven’t started thinking about culture or your
values as you become a mid size or large size company, I think it does need
some massaging, whether that be from senior management or your CEO or from
HR, to help start the conversation and start the dialogue about what the
culture should be. In Tony’s book, he’s talks a lot about, he thought about
his personal values and what was important to him in a business, and then
he also looked at leaders at Zappos, the people that were doing really
well at Zappos, and looked at their personal values.

Christopher:  Ahh.

Christa:  And that’s how he came up with that list of 37. So I think you
kind of need someone to help massage it or get the ball rolling. But from
there, like I said before, it cannot just be something that HR handles or
that the CEO handles, because there is no way to scale that. So it’s
important that, again, you train everyone and you make it really clear what
the expectations are and what their part of the role is in making sure that
the culture continues to grow and thrive. So I think it’s kind of a
combination of both. Some thoughtfulness and some massaging, from some key
people at the organization to get it started. But then you absolutely need
to involve your employees and bring them in terms of ownership to make sure
that it continues to grow.

Christopher:  I got it. So the CEO sounds really critical, though. I mean
you always need the CEO to be supportive and talking and living the values.

Christa:  So here’s the thing. If you don’t live your culture or your core
values with integrity, if it’s clear that HR is talking about this or some
managers are doing it, but clearly other managers aren’t, and certainly if
your senior leadership up to your CEO is not living their core values, you
have no chance in hell of getting people on board with it. They’re going to
see it what it is, which is just it sounds good from a marketing
perspective so let’s say this is what we do. But if you’re not living it,
it’s not ever going to be natural and organic.

You mentioned that you had an HR person come through one of our boot camps.
We have a whole department called Zappos Insights, and their focus is to
help share our culture with other companies that want to learn about it.
And the number one concern that these companies have when they come and
talk to us is that their CEO or senior leadership isn’t on board with it,
or they want to see really hard ROI metrics around why culture works.

Christopher:  Oh, brother, yeah.

Christa:  And you can put some metrics on culture, but I think you’re
missing the point if you just want to quantify it in an exact dollar. I
don’t know how you can 100% quantify employee happiness and engagement and
customer satisfaction. Those are the things that you need to be looking at
and it’s hard to put concrete numbers to that, but it is so important. And
that’s a tough situation for people to be in if you have a key leader who’s
not on board.

Christopher:  So what advice did you give those people, how to get their
key leader on board?

Christa:  Yeah. So my advice would be to start small. Usually, the people
that come in are either in HR or they manage their own particular area. And
I just say start small; start making changes within a group. It can be
overwhelming to think about global company-wide changes. Start doing things
in your organization as it relates to the business unit that you run. And
if you’re doing it right and you have your employees on board with it, the
changes will become evident within that group. And then people, obviously,
that interact with them in other departments that get to see this, they’re
going to take note and it’s going to sort of start this spreading of, “Hey,
look what they’re doing,” or, “Hey, look how happy they are,” that kind of
thing. Then I think you can buy-in from there. But take it bite-sized pieces
and start small would be my advice.

Driving culture or creating culture does not have to be expensive; you do
not have to spend a ton of money to do this. Most of the things that we do
are really low cost. So it doesn’t have to be something coming away from
your bottom line. But the key is really to commit to it. Once you’ve
decided what it is and you have your employees on board, there has to be
full commitment to them. And then, I think you can just watch it grow from
there.

Christopher:  Wow, thanks. Christa, I’ve got to let you go. I know you have
a job to do. I want to thank you so much for spending some time today for
this interview.

Christa:  Sure.

Christopher:  I think culture is great. I think Zappos is an inspiration,
especially as big a company as Zappos is, and that it has taken a mission
to spread these ideas throughout the world, which I think there’s a
shortage of these kinds of ideas. So I want to thank you for meeting with
me today, and helping spread these ideas and sharing a little bit about
Zappos.

Christa:  Sure. It was my pleasure. Thank you so much.

____________________

Say “Thanks!” to Christa by sending a Tweet!

Follow Christa on Twitter here.

  • Linda

    I love Zappos! I read Delivery Happiness when I started working for a tech company several years ago and I whole-heartedly support their vision and how they run their culture. So inspiring!