Back to China with two goals #216

Back to China with two goals #216

Back to China with two goals

Blog # 215 I talked about the first million-dollar day celebration.  In this blog I want to talk about going back to China with two goals.


Zappos starts working on a list of 37 culture ideals which would eventually be condensed into our 10 core values in 2006. The email is super long so I will add that to the end of this week’s blog story.


We decided to cut our private label program back down to 7 brands to focus on making them great. I also decided to step away from the branded side and devote 100% of my time to developing private label and my team. The main five brands were RSVP, Gabriella Rocha, Fitzwell, Lumiani and Vigotti. Type Z and Bricks were brands that we were evaluating more closely.


So back to China we go with two goals, firm up the gel idea and find a box maker that will allow us to create our own designs. The Haiyatt Garden hotel was now our go to place to stay. Getting from Hong Kong to Houjii was always fun.


Along with the “Food” rule there was another one. “Always look both ways when crossing the street” That’s because people sometimes drive the wrong way. I’ll never forget riding in a car and the driver decides to go the wrong way. “What are you doing” I asked. “Faster this way” was his response…


The sites were always interesting, every time I came back construction was going at a very expedited rate. It always looked different every time I came back. Not drastically but I was always amazed at how fast the buildings went up.


 I remember hearing from people before I ever started travelling to China stories that simply weren’t true.  “They hate Americans”, False. “Yaks roam the streets”, False. “They eat cats and dogs”, Kinda false. You can find whatever you want to eat over there but still not common to find.

It was common to see guys on bikes carrying tremendous loads behind them or 3-4 people on a motorcycle.


We had a concept for the Fitzwell box in mind, so we used that when we started talking to the box people. The gel would be blue, so I wanted that color to be represented on the box. Tomorrow would be a big day

We were going to visit the Gel Factory to see the prototype insole and the box factory with a sample Fitzwell box.


Here’s the email about the 37 culture ideals. I took out the links that no longer work:






One day, 30% of all retail transactions in the United States will

be online.  Consumers will buy from the company with the best

service and the best selection.  Zappos will be that company.


“We are a service company that happens to sell _____________.”




(and eventually anything and everything)






It all begins with one simple question… and the rest follows

naturally once we’ve answered this question: “What do we want to

be when we grow up?”


To customers, we want Zappos to be a household name that everyone

has heard of, is passionate about, and is proud to be associated

with.  We want to be known as the place to get the absolute best

service and online shopping experience.


To employees, we want Zappos to be the best place to work.  We

want Zappos to be a place where employees are fully engaged.  We

want employees to look forward to coming to work every day because

they know that they are contributing to the company and making a

difference.  We want employees to believe in the company’s long

term vision, because they know that this is a place where they can

experience both personal and professional growth as the company

grows.  We want employees to be passionate about the company.  We

want employees to inspire others and be inspired by other

employees as well.  We want Zappos to be #1 in Fortune’s annual

list of the “100 Best Companies to Work For.”


To vendors, we want Zappos to be the best company to do business

with, because they know that Zappos is a company that is always

fair and appreciative of the partnership.  We want the

vendor/retailer relationship to be a true partnership that is a

win/win for both parties.


To investors, we want Zappos to be one of their favorite

investments.  We want Zappos to be financially successful.  In the

long term, we want Zappos to be profitable and constantly growing.

(It’s only through continual growth that we can create

opportunities internally that allow employees to grow and



Combined altogether, we call all of the above our “WOW”  

philosophy.  We want to WOW our customers, our employees, our

vendors, and our investors every chance we get.  We want every

interaction with any of them to result in them saying:


  “WOW — I love Zappos — what a great company!”


That is what we want to be when we grow up.






Because we are a service company, there is only one way to

successfully build the Zappos brand into what we want it to

become: We need to build and grow a service-oriented culture that

embodies the Zappos ideals, and we need to support that culture

with the structure and processes designed to encourage those

ideals to proliferate as the company grows and brings in new



The Zappos brand and the Zappos culture are really just two sides

of the same coin.  Just as we need to protect and grow the Zappos

brand every day, we also need to protect and grow the Zappos

culture every day.


We need every employee to contribute to the Zappos culture, which

means that every employee needs to strive to represent and live

the Zappos brand ideals on a daily basis.


The Zappos brand ideals need to be represented anytime and

everytime employees interact with anyone, whether it’s a customer,

another employee, a vendor, or even a complete stranger.  To

become a Zappos employee is to choose the Zappos way of life.  

The Zappos lifestyle and attitude is *not* for everyone.


As an employee (or potential employee), the question you need to

ask yourself is if it’s the right fit for you.  Is Zappos

something you want to be a part of for the rest of your life?  

Are you willing to strive to represent the Zappos brand ideals on

a daily basis?






If we had to choose one word to summarize the Zappos brand, it

would probably be “WOW” or “service”.  But the Zappos brand and

culture that we want to build is much more complex than that.  

It’s actually about 37 different concepts combined together.  It

takes time for employees to:


  1) Fully understand these concepts

  2) Practice these concepts on a daily basis

  3) Inspire others to practice these concepts on a daily basis


Those who can do all three become natural candidates for

leadership positions within Zappos.


1 Culture is Everything

2 Wow/Service

3 Trust and Faith

4 Idealism

5 Company Growth

6 Long Term

7 Personal Growth and Stretching

8 Achieving the Impossible

9 Team

10 Family/Relationships

11 Emotional Connections

12 Developing Your Gut

13 Empowerment

14 Ownership

15 Taking Initiative

16 Doing Whatever It Takes

17 Not Being Afraid to Make Mistakes

18 Unconventional

19 Bottom Up (Meets Top Down)

20 Partnerships

21 Listening

22 Overcommunicate

23 Operational Excellence

24 Built for Change

25 Continuous Incremental Improvement

26 Doing More With Less

27 Innovation

28 Word of Mouth

29 Lucky

30 Passion and Positivity

31 Personality

32 Openness and Honesty

33 Fun

34 Inspirational

35 A Little Weird

36 Willing to Laugh at Ourselves

37 Quiet Confidence and Respect


It’s a long list that may at first seem overwhelming… and in

some respects, it is intentionally meant to be that way.  Each and

every one of the concepts is essential to our brand and our

culture.  Our expectation is that will take time for people to

really learn each and every one of these brand/culture concepts.


– Fast Company article about core values


– Recommended book: Good to Great


Perhaps one way of dividing up the list to make it a little easier

to digest is to put each concept into 1 of 3 buckets: 


  1) What we value

  2) How we operate

  3) What our personality is





1 Culture is Everything

2 Wow/Service

3 Trust and Faith

4 Idealism

5 Company Growth

6 Long Term

7 Personal Growth and Stretching

8 Achieving the Impossible





9 Team

10 Family/Relationships

11 Emotional Connections

12 Developing Your Gut

13 Empowerment

14 Ownership

15 Taking Initiative

16 Doing Whatever It Takes

17 Not Being Afraid to Make Mistakes

18 Unconventional

19 Bottom Up (Meets Top Down)

20 Partnerships

21 Listening

22 Overcommunicate

23 Operational Excellence

24 Built for Change

25 Continuous Incremental Improvement

26 Doing More With Less

27 Innovation

28 Word of Mouth

29 Lucky





30 Passion and Positivity

31 Personality

32 Openness and Honesty

33 Fun

34 Inspirational

35 A Little Weird

36 Willing to Laugh at Ourselves

37 Quiet Confidence and Respect






We want all of our employees, especially our managers, to

understand that our culture is all that matters, and people are

our most valuable resource.  We want everyone to do whatever it

takes to protect our culture.


We want our managers to realize that there will be some employees

that may perform well as individuals but detract from the company

culture.  If those people cannot be turned around to embrace the

Zappos culture, then we expect our managers to take the

appropriate action in order to protect our culture.


We want our managers to understand that it is their responsibility

to live the Zappos culture and lead the people they manage to

embrace the Zappos culture.


– Recommended book: Branded Customer Service


– Performance review question: Does the employee understand the

importance of culture to the company?  Does the employee exemplify

and promote the Zappos culture to others?






“The secret of success is to do the common things uncommonly

well.” — John D. Rockefeller


First and foremost to our customers, Zappos is about service.  If

there were only one thing for customers to remember, it’s that we

think of ourselves as a service company, not a footwear company.


In order to succeed as a service company, we need to provide

service that is consistently “above and beyond” what’s expected.  

Every interaction with a customer is an opportunity to build and

grow the Zappos brand and create positive word of mouth.


[Begin note from Dr. Vik]


True service is the ability to serve.  From the “outside”,serving

seems like a one way street, solely giving.  But in reality, the

greatest levels of contentment and self-satisfaction are

experienced by those who have found a way to serve others.  In

addition to the true inner joy that is created by serving others,

it is a universal principle that you cannot serve others without

it coming back multiplied to yourself.


“It is one of the beautiful compensations of this life that no

person can try to help another without helping themselves.” —

Ralph Waldo Emerson


[End note from Dr. Vik]


If we can consistently WOW our customers, our employees, and our

vendors, then there is no limit to what we can accomplish



– Examples of WOWing our customers: “Surprise” upgraded shipping, 

24/7 Customer Loyalty Team and what they’re empowered to do


– Examples of WOWing our employees: Free lunch, the best benefits 

program around, “Homesickness” option


– Examples of WOWing our vendors: No markdown money, no

unreasonable chargebacks


– Recommended books: Branded Customer Service, Tipping Point, Free 

Prize Inside, Purple Cow, All Marketers Are Liars.


– Performance review question: Does the employee consistently WOW

the people that he/she comes in contact with every day, whether

it’s customers, vendors, or other employees?


From our customers:


I’ve ordered many times from Zappos and am always very pleased

with the service, product, and fast shipping.  But you’ve out-done

yourself this time!  My husband and I live in a small town where

we can’t buy nice shoes at any local store unless we go to

Walmart.  We both ordered some new running shoes from Zappos on

Tuesday night, pretty late (around 10pm).  I was shocked the very

next day at noon when a UPS truck drove into my drive way with

what else?  Our shoes!  About 12 hours from the time I submitted

my order they were at my doorstep. I felt like I was in the

twilight zone or something!  So this is just a thanks for once

again exceeding my expectations.  I’ll definitely spread the word

to all my friends about your superior service.



This is my first time ever ordering shoes with Zappos.  I have

visited the website numerous time but never placed an order. I am

so blessed and so impressed by your promptness and dedication to

go the extra mile to satisfy your customers.  What an impressive

company.  Thank you for your kindness and dedication to go that

extra mile to provide a total satisfaction guarantee.  I was just

happy to get such a great deal on the shoes I purchased and was

happy to receive them within the 6-12 day time frame but how

awesome for Zappos to take that extra step to ensure satisfaction.  

I am impress and definitely will place shoe orders in the future.  

This is my shoe shopping store definitely!!



I don’t know who will see this email, but I am compelled to tell

someone how I feel–Zappos gives the absolute best service of any

internet store I have ever bought from.  From the moment I order

something through my total satisfaction and/or return and

replacement to upgrading my shipping.  FOR FREE!  Nowhere else I

have ever bought from compares! You are super and I just wanted to

tell you I do appreciate it and that I do not just take it for

granted.  You are outstanding.  I hope you will always keep up the

good work. Zappos is the FIRST site I choose to shop for shoes.  

Always!  And I do tell all my friends, too.






Trust is one of the most important parts of the Zappos culture, as

it is the glue that holds everything together.  If we say we will

do something, then we do it.  If someone else takes responsibility

for something, then we trust that it will get done.


As a company, we trust that our employees will perform to the best

of their abilities and always keep the company’s best interests at

heart.  For employees, we hope that they will trust that Zappos

always takes care of its employees, and treats them better than

almost any other company out there.


As a company, we have faith that in the end, if we stay true to

our brand/culture ideals, we will become a great company.


– Nick’s “leap of faith” story about starting Zappos


– Fred’s “leap of faith” story about leaving Nordstrom and joining



– Performance review question: Is the employee trusted with

responsibility by his/her manager and co-workers?  Does the

employee complete assigned tasks on time and accurately?






Inherent in the Zappos brand and culture is a sense of idealism.  

We’re idealistic in our vision for the future.  We believe that by 

offering great service, we will inspire other companies to also 

improve their service, and in our own small way, we will help make 

the world a better place.


We’re idealistic in that we don’t worry too much about

competitors.  We believe that if we simply focus on giving our

customers the very best service, the competition doesn’t really



We’re idealistic in that we always try to be “bigger”… 

individually each of us tries to be the bigger person, and as a 

company we try to be the bigger company.  Not everyone or every 

company plays fair, but we don’t let that get us down and we don’t 

succumb to their level, because we believe that in the end, 

character is what matters most in the long term.  


We’re idealistic in that we believe the good guys always win in

the long run.


– Performance review question: Does the employee view challenges

in an idealistic manner?






Without company growth, there would be no Zappos.  It is the 

growth of the company that enables us to do everything that we 

want to do.  It is the growth of the company that allows us to 

constantly create new opportunities for our employees and for the 

company as a whole.


Historically, our gross sales have more than doubled year over 

year since the company’s founding:


1999: Almost nothing

2000: $  1.6 mm

2001: $  8.6 mm

2002: $ 32 mm

2003: $ 70 mm

2004: $184 mm 

2005: $300 mm (goal)


We approach all of our challenges with the future growth of the

company in mind.  We design our systems and processes to be

scaleable, but we also realize that things that work for us today

may not work for us tomorrow.  Because of our growth, the company

is constantly evolving.  This is something to always keep in mind

and plan for.


– Performance review question: Does the employee approach problems

with the company’s future growth in mind?  Are the employee’s

solutions to problems scaleable?  Does the employee contribute to

the company’s continued growth?






When Zappos first started, we experimented with offering customers

$10 off their first purchase to incent them to try us out.  While

this had an undeniable effect on increased sales in the short

term, what we found was that the customers we got through that

offering were not loyal.  They were only buying from us because of

price, and if a competitor offered a better promotion or a lower

price, we lost that customer instantly.


So we quickly stopped offering any type of blanket discounts or

promotions altogether, and decided to differentiate ourselves

another way, which led us to really focus on having the best

service and the best selection.  Today, Zappos is a full-margin

retailer, and we don’t offer any promotions or discount programs



Focusing on service is a long term strategy, because the benefits

aren’t always obvious in the short term.  Much of service 

is about what happens after the sale has already been made.


However, over time, thinking in the long term has really benefited 

the company.  It’s because of our focus on service that our repeat 

customer numbers have steadily increased over time.  It’s because 

of our focus on service that our word of mouth statistics have 

increased over time.  It’s because of our focus on service that we 

are where we are today.  It’s because of our focus on service that 

we’re going to get to where we want to go tomorrow.  But most 

importantly, it’s because of our long term thinking about the 

benefits of service that we will get to where we want to be 10 

years from now.


In general, all of our decisions should be made based on what’s 

best for the company in the long term — and ignore the short 

term benefits or costs.


– Example: Stopping drop shipping


– Example: No coupons for blanket discounts


– Example: Early WSA days when almost no brands would sign up with 



– Performance review question: Does the employee make decisions

based on what’s based on what’s best for the company in the long







“Opportunity often knocks, but rarely turns the knob and opens the 



“You can’t get to second base with one foot on first.”


Fundamental in our culture is the belief that everyone has the

potential to grow.  It’s just a question of time, patience, and

the desire of the employee to get to where he/she wants to go.


At Zappos, we want to grow our own employees whenever possible, so

we have developed (and are continuing to develop) training

programs for our employees.  For example, our merchandising

department has a career path and training program to allow

employees to progress from Product Info Coordinator to

Merchandising Assistant to Assistant Buyer to Buyer to Senior



We believe in coaching our employees to help them succeed at

Zappos.  We want to help each of our employees to create a

personal vision for himself/herself.  We want our employees to

grow and stretch themselves to achieve things they may not have

originally thought they could achieve.


[Begin note from Dr. Vik]


The value of coaching is explained by the Pygmalion effect, where

people only achieve to the level of their own preconceived

expectations, which is usually below their actual potential.  

Coaching helps people raise their own expectations to a level more

consistent with their potential, thereby improving their own

capabilities, skills, and lives in general. That is the very

reason that all professional athletes have a coach. Zappos

believes in the benefits of coaching, and offers personal,

business, and team coaching as a way of allowing employees to be

the best that they can be.


[End note from Dr. Vik]


We want our managers to understand that their main task is to help

and develop the people that they supervise: help them get the

materials and resources they need, help them do their jobs better

and more efficiently, help them understand the company and its

objectives, help them grow and develop, and help them understand

and embrace the Zappos culture.  We want our managers to teach the

people surrounding them as much about their own jobs as possible.


– Recommended book: Fred Factor, Self-Help Stuff That Works


– Performance evaluation question: Has the employee stretched

himself/herself and taken on roles and responsibilities that were

beyond his/her natural comfort level and job responsibility?






“You eat an elephant one bite at a time.”


“The most rewarding challenges are the most difficult to achieve.”


“We must remember that one determined person can make a

significant difference, and that a small group of determined

people can change the course of history.” — Sonia Johnson


“The positive thinker sees the invisible, feels the intangible and 

achieves the impossible.” — Anonymous


Zappos is about changing the way the world works.  Since the

beginning, we’ve always been told “No, that’s impossible.” 


We were told that it was impossible to get customers to buy shoes

online.  We were told that it was impossible for an internet

company to provide better service than a brick and mortar store.  

We were told that it was impossible to get any meaningful number

of brands to allow us to sell their shoes.  We were told that it

was impossible to build a company based on word of mouth.  


We were told it was impossible to build a financially successfully 

company while making customers, employees, and vendors happy.


But we had a vision for what we thought we could achieve together, 

and we’ve proven that with the right people and the right 

attitude, we can achieve the impossible together.  


– Performance review question: Does the employee believe in terms

his/her personal abilities as well as the company’s abilities as a

whole to achieve its goals?






“The leaders who work most effectively, it seems to me, never say

‘I’.  And that’s not because they have trained themselves not to

say ‘I’. They don’t think ‘I’. They think ‘we’; they think

‘*team*’. They understand their job to be to make the *team*

function. They accept responsibility and don’t sidestep it, but

‘we’ gets the credit…. This is what creates trust, what enables

you to get the task done.” — Peter F. Drucker


There is no “I” in team unless you spell it “Team,” in which case

there is an “I” — Fred Karem, Inhouse Counsel


A team is made up people with different duties and

responsibilities yet work together as equals. Some team positions

may appear more glamorous, yet the strength comes from everyone.

On the Zappos team, everyone is a leader.  This is the team value

we strive for.


At Zappos, the entire company is thought of as a team.  Company

accomplishments and recognition are championed over individual

accomplishments.  We want there to be an attitude of openness,

honesty, transparency, and sharing between people, whether they

are from the same department or from different departments.


Zappos’ strong sense of team creates a family-like environment.  

The diversity of this family-like environment promotes a stream of

ideas and a sharing of knowledge.


Unlike what happens in other companies, we don’t want Zappos

managers to feel territorial about their departments or feel

threatened by other people in other departments.  Instead, the

Zappos philosophy is to help wherever help is needed, and accept

help whenever help is offered.


We want managers to check in with their employees regularly, and

asks what else they can do for them to help them succeed.


Our managers do not have an “open door” policy, but rather a “no

door” policy.  We want our managers to sit on the floor with their



– Performance review question: Is the employee’s behavior

consistent with that of being a team member as opposed to an

individual contributor?






“Call it a clan, call it a network, call it a tribe, call it a

*family*:  Whatever you call it, whoever you are, you need one.”  

— Jane Howard


Zappos is not just a place to work.  Bound by a common mission, we

are one big family, embracing diversity in all senses of the word.


At Zappos, nobody works in a vacuum.  Everyone realizes that

his/her work and attitude affects the performance and attitude of

others, and therefore affects the culture of the company.


Being part of a family means having a sense of comradery with 

your fellow co-workers.  It means being friendly, nice, caring, 

empathetic, helpful, supportive, compassionate, and respectful.


At Zappos, we understand that relationships are extremely 

important.  Employees who have both more relationships and deeper 

relationships with other people throughout the company are much 

better candidates for leadership positions.


Historically, we’ve had managers as well as project managers come

from outside of the company and attempt to jump immediately into

management roles.  What we learned was that they were for the most

part ineffective because they had not established relationships

with others in the company, and therefore nobody respected them.  

Today, we prefer to grow managers and project managers internally.  

We look for people who have established a good rapport with people

at all levels (entry level, supervisors, and managers) in other



– Performance review question: Does the employee regularly

establish new relationships with other people in the company?  

Does the employee talk to someone in another department that they

would not otherwise talk to at least once a week?






“I’ve learned that people will forget what you said, people will

forget what you did, but people will never forget how you made

them feel.” — Maya Angelou (American Poet, b. 1928)


One of the most important parts of what we do is forming positive

and lasting emotional connections.


For customers, our goal is to form an emotional connection with 

our customers in every interaction.  It’s all part of WOWing our 

customers.  For example, giving our customers a surprise shipping 

upgrade because we value them as a customer forms more of an 

emotional connection with them than if we simply gave them $10, 

even though the cost of the shipping upgrade to us might be $10.


For employees, we also want to form an emotional connection.  

That’s what being in a family is all about, and once we’ve 

developed that emotional connection, then employees start becoming 

passionate about the company which results in long term loyalty to 

the company.


For vendors, forming an emotional connection means that they will 

think of Zappos first whenever new or special products become 

available.  Emotional connections allow us to take our 

partnerships with our vendors to another level, where everyone 

treats each other as if we’re all part of one big extended family.


– Performance review question: Does the employee make the people

he/she interacts with, whether they are customers, employees or

vendors, feel like there is a genuine interest in the interaction?






A lot of Zappos is about venturing into unchartered territory.  

We are doing things that no one else has ever done before, so 

there is no instruction manual for how things should be done.


Therefore, a lot of the decisions we make come down to relying on 

our gut.  This may seem like a bad way to run a business, but 

relying on our guts allows us to make decisions quickly and move 

the company forward faster than anyone else.


Through experience and over time, business instincts can be

developed… but the only way to develop your gut is to follow

your gut, take risks, and occasionally make mistakes.  Sometimes,

especially in the beginning, your gut will be wrong… but you and

your gut will also learn how to be less wrong over time.


This doesn’t mean that we shouldn’t be doing any analysis or if we

don’t have any information then we should just wing it.  Instead,

we should follow the 80/20 rule: If we have 80% of the relevant

information, usually that’s enough to make a decision.  We want to

avoid “analysis paralysis”, where the time or cost of a complete

analysis outweighs the benefit of getting that last 20% of



– Recommended Book: Blink


– Performance review question: When not all the information is

immediately available, does the employee rely on his/her gut to

make decisions, or does the employee go down the path of analysis

paralysis?  Does the employee work on developing his/her gut?






We want our managers to give their employees the opportunity to

succeed and empower them to use their best judgement. It is only

with empowerment that employees are able to truly make a

difference and contribute to the company.  Empowerment fosters

dedication, loyalty, pride, and ownership.


Because of our empowerment philosophy, our managers should be able

to disappear for 2 weeks with no notice and still have their

departments run smoothly on their own.


– Performance review question (for managers): Does the manager

empower his/her employees to help make decisions and contribute to

the company’s growth?






With empowerment comes ownership.  We want our employees to take 

ownership of their responsibilities at Zappos, and over time, take 

on more and more responsibilities and therefore more ownership.  

We want employees to view Zappos as their company, not a company 

that they happen to work for.


Employees should show pride in the work they do and the projects

they take on.  When employees come into work every day, it should

be viewed as more than just a job: it is a reflection of their

capabilities, their contributions to their department, and the

company as a whole.


Part of having ownership means having pride in your work, but part 

of having ownership also means taking responsibility for the 

decisions that you make.


– Performance review question: Does the employee take ownership of

his/her work?  Does the employee show pride in the work he/she

produces?  Does the employee take responsibility for his/her







Taking initiative is a direct result of commitment and motivation.  

At Zappos, commitment and motivation are more important then

credentials or resumes.


At Zappos, we rely on our employees to take initiative.  Employees

that simply sit around waiting to be told to do something do not

fit into the Zappos culture.  There is always an endless list of

things that can be done.  The employees that take the initiative

to take care of something that isn’t already being taken care of

(without being told to take care of it) are the ones that are most

likely to be in leadership positions at Zappos in the future.


– Performance review question: Does the employee show initiative

and take on projects on his/her own without being told?  Does the

employees follow through on these projects to completion?






To be a Zappos employee means you need to be willing to do 

whatever it takes to help the company, no matter what your 

department or title is.  We want employees that are willing to 

roll up their sleeves.


That’s part of the reason why all Zappos employees are required to

work in the warehouse for at least a week.  Prospective employees

that refuse to do so aren’t Zappos material.


Zappos managers are willing to roll up their sleeves and work side

by side with the front line employees in order to boost morale, to

increase their approachability, or simply to get something done

that needs to get done.


– Example: Tons of overtime by CLT when we were understaffed


– Example: Keith in KY for over 2 years (went to KY with 3 hours



– Performance review question: Has the employee proactively

demonstrated willingness to go beyond his/her specific job

description and help out whenever and wherever help is needed?






“Live life fully while you’re here. Experience everything. Take

care of yourself and your friends. Have fun, be crazy, be weird.

Go out and screw up! You’re going to anyway, so you might as well

enjoy the process. Take the opportunity to learn from your

*mistakes*: find the cause of your problem and eliminate it. Don’t

try to be perfect;  just be an excellent example of being human.” 

— Anthony Robbins


“You always pass failure on the way to success.” — Mickey Rooney


“Losers make excuses, winners make progress.”


“A ship in a harbor is safe, but that is not what ships are made



It’s okay to make mistakes, but at Zappos, we make them quickly.


Throughout the history of Zappos, we’ve made A LOT of mistakes.  

Taking risks and occasionally making mistakes is what has made us 

successful up until this point, and we need to make sure we 

continue to have that attitude moving forward in order for us to 

maintain our edge.


Companies that are too careful or risk-averse end up never 

becoming great companies.  In order for Zappos to become a great 

company, we must be willing to experiment and make mistakes.  When 

we do make mistakes; we need to make sure that we learn from those 

mistakes, and then we move on to the next experiment.


It’s only through this process that we develop our instincts on 

taking risks in order to move the company forward.  If you haven’t 

made any mistakes while at Zappos, then you’re not taking enough 



We want our managers to empower all of our employees to use their 

best judgement.  We want our managers to encourage employees to 

take risks and think innovatively.  We want our managers to view 

mistakes made by employees as learning opportunities.  We want our 

managers to instill in employees the idea that it’s okay to make 

mistakes, as long as you learn from them.


Whenever a mistake is made, it’s important not to cover it up or 

blame others for the mistake (which is commonly done in other 

companies).  Instead, employees should take responsibility for 

their mistakes and, more importantly, share them with everyone so 

that we can all learn from the experience.


– Performance review question: Does the employee take enough risks

so that mistakes are occasionally made?  Is the employee open and

forthcoming about mistakes that are made?  Does the employee use

mistakes as learning opportunities for himself/herself as well as

for other people in the company?  Does the employee learn from







“When someone cries “fire” in a crowded theater, a contrarian is

the person who first checks to see if there really is a fire

before rushing to the door.”


Zappos has been described as unconventional, contrarian, zany, and 

unpredictable.  It’s because, most of the time, we don’t do things 

the way everyone else does things.


We believe in always challenging the norm — not to be rebellious,

but to see if there’s a better way to do something (and what we’ve

found is that there usually is).


It takes courage, independence, and a sense of creativity to be

unconventional.  These are all attributes that we value at Zappos.


Example: Vendor Appreciation Party (retailers never throw parties 

for vendors)


Example: Building first KY warehouse from scratch


Example: Being open/honest about our business with our vendors


– Recommended books: Tipping Point, Purple Cow, Why Not?


– Performance review question: Does the employee think “outside

the box” and approach problems creatively?






In order to empower our employees, we need to make sure our

managers are constantly gathering feedback from our front lines.  

80% of operational improvements and decisions should be driven

from the bottom up, not the top down, because it’s the people on

the front line that are closest to the issues and therefore have

the most knowledge.


On the flip side, the culture and attitude of a department or

company manifests itself from the top down.  The broad long-term

goals and vision of the company should be communicated from the

top down, but figuring out how to fulfill those goals on a day to

day basis should come from the bottom up.


– Performance review question (for managers): Does the manager

gather honest feedback from the people on the front lines on a

regular basis?  Do 90% of operational improvements and decisions

come from the front lines?






Our WOW philosophy applies to much more than just our customers

and employees.  We also want to WOW the hundreds of vendors that

we work with and really approach these relationships as true 



In the wholesale/retail world, most vendor/retailer relationships 

are somewhat adversarial, because retailers try to squeeze every 

last dollar out of the vendors they buy from.


The Zappos approach is completely different.  We always try to 

build win/win relationships with all of our vendors, because we 

believe that that is the best way to grow sales for everyone.


Instead of being secretive about our business, we share as much 

information as possible with our vendor partners in the spirit of 

being open, honest, transparent, and sharing.


We’ve developed an extranet on our web site so that any vendor can

log in and see everything that our buyers see.  They can view

on-hand inventory, view detailed sales reports, suggest items for

markdown, view what’s on-order — even write their own PO’s.  

There is almost nothing that our buyers can do that our vendors

can’t.  We’ve essentially handed them the “keys to the kingdom,”

because we think the more eyes, we have on managing our business,

the better our business will be run.


Even though we are the ones paying our vendors, we are still

appreciative of their support and of the partnerships we’ve built

together.  We think that this approach and attitude will make

Zappos more successful in the long run.


– Example: Vendor appreciation party


– Performance review question: When the employee interacts with

outside vendors (including those touring the office), does the

employees build positive relationships with them?  When applicable,

are those relationships viewed by the vendors as true







“We are born with 2 ears and 1 mouth so that we can listen more 

and talk less.”


“Try to understand before trying to be understood.”


One of the most important things that we do at Zappos is listen.  

We listen to our team members, vendors, customers, partners, and

investors.  By listening, we can find out how to better move



Feedback is one of the best ways to measure what we’ve done and

how to do things even better.


– Performance review question: Do the people that the employee

comes in contact with (employees, customers, and/or vendors)

perceive him/her as a good listener?






This is still a big area that we need to work on as a company, but 

we believe that communication will become more and more important 

as the company grows.  In fact, we want to err on the side of 

overcommunication, because almost all companies err on the side of 

under communication.


The “Ask Anything” newsletter is a first step in that direction, 

but we still have a lot of work to do.


We want our managers to overcommunicate the company’s goals and 

vision to their employees.  We want our managers to make sure that 

they are clear and concise in the direction of their departments.


We want our managers to realize that communication from the 

bottom up is just as important as communication from the top down.  

We want our managers to take whatever time is necessary in order 

to listen to their employees.  We want our managers to try to 

understand before trying to be understood.


As the company continues to grow, managers will find that they

spend more and more of their time communicating and less and less

time doing what they may think of as “actual important work.”  In

fact, the opposite is true.  The time spent communicating will 

become more and more important as the company grows, and managers 

should set aside more and more of their time communicating and 



– Performance review question: Is the employee communicative to

his/her manager and co-workers?  Does the employee err on the side

of overcommunication vs. under communication when appropriate,

without being excessively long-winded?






Operational excellence refers to all the things we do behind the

scenes our customers don’t see but are absolutely necessary for us

to run and grow the business and remain competitive.  Operational

excellence is about being faster, more efficient, more responsive,

and more effective than any of our competitors.  It’s about

continually improving all aspects of our operations.  It’s about

constantly raising the bar so that it’s harder and harder for any

would-be competitors to catch up to us.  The more efficient we

are, the more we can offer our customers in providing the best

online shopping experience possible.


The quest for operational excellence is never-ending.  There are

always ways to improve processes and efficiencies in all areas of

the company, and the employees that are able to do so on a

continual basis are the ones that are better prepared to take on

leadership positions within Zappos.


– Story of Clarks shipping


– Performance review question: Does the employee consistently

re-examine and improve upon existing processes to make the company

more efficient?  Has the employee done his/her job in a way to

make us faster, more efficient, more responsive, more WOWing, etc.

than we would have been?






From an outsider’s perspective, Zappos may appear to be a chaotic

organization without much long-term planning ever being done.  In 

fact, we’ve had many visitors visit our offices, talk to us, and 

walk away bewildered because they don’t understand how we could 

possibly have gotten as far as we’ve gotten.


This is because Zappos is built differently from most 

organizations.  Rather than having a methodical, well-thought-out 

plan that we execute on day by day, Zappos is an organization that 

was designed to be built for change.


We work in a fast-paced environment, where what we’ll be doing 6

months from now is hardly ever clear, where everything is

ever-changing, and where yesterday’s rules often no longer apply.


For some people, especially those that come from large

corporations with a lot of bureaucracy, this ambiguity can be 

unsettling at first.  


The key is to realize that it’s okay to not have all the answers

(or even most of the answers) for what’s going to happen in the

future.  Instead, we just need to make sure that the people and

processes in Zappos are designed to anticipate change, because

without a doubt, things will change.


In our pursuit to better ourselves individually and as a company,

we expect and openly accept change, allowing for our continued



We need to make sure that our managers have enough “slack” in

their schedules so that they can respond quickly to emergencies,

sudden waves of extra work load, or other people in need of more



We want all of our employees to lead balanced lives, and we want

our managers to encourage our employees to lead balanced lives.


– Recommended book: Slack


– Performance review question: Has the employee designed enough

slack into his/her work schedule so that he/she can be responsive

to emergencies or sudden waves of extra work load?






There was no master plan for Zappos from day 1.  The original idea 

for Zappos had nothing to do with service.  That was something 

that evolved over time, and now is the focus of everything we do.


The truth is, it’s impossible to plan for everything from the 

beginning.  That’s just a fact of being in a growing company.


So rather than try to anticipate for and plan for everything, at 

Zappos, we make small, incremental improvements instead.  We then 

gather feedback from customers and/or employees, and then make 

another set of changes based on the feedback.  Usually, what we 

end up with looks nothing like what we would have planned for.


People often talk about getting things “done right the first

time”.  There is no such thing.  In an environment growing as

quickly as we are, what is “right” changes dramatically over time.  

Any large project needs to take a flexible, staggered approach

that involves learning and adapting as we go.


– Performance evaluation question: Does the employee use

appropriate continuous incremental improvement techniques when

implementing processes or attempting to address issues?






For the first 4 years of the company’s life, it was virtually

impossible to raise money for the company.  The Internet bubble

had burst, 9/11 happened, America declared war on Iraq, and the

recession happened.  The company almost ran out of money several



Through all of these hardships, we were forced to make do with

fewer resources than other companies had.  We didn’t buy fancy

cubicles, desks, or other office equipment.  We couldn’t afford to

buy any expensive software (such as Oracle) or servers.  We

couldn’t afford to pay huge salaries or hire expensive



It turned out to be a blessing in disguise, because we were forced

to figure out how to do more with less, and that attitude stays

with us today.  Our systems run on open source (free) software.  

We don’t pay outrageous salaries.  We shy away from outside

consultants.  In general, we try to do as much as possible

ourselves in order to save on costs and give us more control over



– Performance review question: Does the employee approach tasks

with cost controls in mind and a frugal attitude?  Has the

employee demonstrated frugality in his/her purchase decisions?






“All the resources we need are in the mind.”– Theodore Roosevelt


Innovative thinking allows us the freedom to create solutions

beyond traditionally perceived boundaries or limits.  Innovation

is about raising the bar of what’s expected.  It’s about making

the impossible possible.  It’s about being creative and

challenging accepted norms.  It’s about asking ourselves, “Why



– Example: Building our KY warehouse system from scratch despite

no experience.



– Recommended books: Tipping Point, Innovator’s Dilemma,

Innovator’s Solution, Blue Ocean Strategy, Why Not?


– Performance review question: Does the employee suggest and/or

implement innovative ideas that help move the company forward?






The internet is really an amazing thing when it comes to

communication.  With the simple click of a mouse, one happy

customer can instantly let his 10 closest friends know about his

great experience and influence them to buy from your web site.  

And those friends can each tell each of their 10 closest friends,

and so on.


Growth at the grass roots level is the strongest foundation that

can be built.


But and this is a big but: the reverse is true as well.  An

unhappy customer can make sure that he and 20 of his friends and

family will never buy from your web site again. Bad news always

spreads faster than good news.


While it’s hard to measure the effects of word of mouth perfectly, 

we do ask all of our new customers where they heard of Zappos.  By 

and large, the biggest driver of our growth has been some sort of 

word of mouth, whether it’s from a friend, a family member, their 

church group, or a posting on an internet message board.


Do not underestimate the power of word of mouth on the internet, 

and do not underestimate the ripple effects of your actions.  

Every time you interact with anyone, whether it’s a customer, 

employee, or vendor, the effects of what you do will be magnified 

and spread far beyond any one person.


From our customers:


I have referred many friends to you company, and will continue to

buy from you in the future. you have great products, website, and

customer service!



A friend of mine told me about you, I was having the worst time

finding a pair of shoes to go with my berry colored dress for my

30th class reunion. After my second order I finally found the

perfect pair but they ran a little big, so I called customer

service and explained my problem and they were promptly exchanged.  

I usually never order through the mail because of the shipping it

never works out for me and costs me twice as much, but thanks to

your free shipping & return I was able to find the perfect shoes.

I will tell everyone about Zappos what a great company you are,

keep up the good work. Thank You!!!



You guys are amazing!  I’ve never had better service from a

company – either at a real bricks and mortar store or on the web.  

Your internet site runs seamlessly, and when needed, a call to

your customer service department means more quality treatment for

the buyer.  My issue was not only remedied within the first few

minutes of my call, the rep. went ahead and authorized my

replacement shoes to be shipped before I had even had a chance to

return the original pair.  I applaud your incredible service and

standards and will continue to direct friends and relatives (and

even strangers) to your site.


– Performance review question: Does the employee exhibit behavior

that results in positive word of mouth about the employee and/or

the company?






“Luck is where preparation meets opportunity.”


“Luck is the residue of design.” — Branch Rickey


Half of everything that happens in life is luck.  Part of the 

reason why we are humble as a company is because we realize that 

half of our success was because we got lucky: we got the right 

group of people together at the right time.


But the other half of the story is that we essentially make our 

own luck.  It’s true that we could not have planned many of the 

important things that happened to the company, but we did set the 

stage so that those things were more likely to happen to us than 

another company.


If we take enough risks, then from a statistical perspective,

something will work out and one of those risks that we took will 

make all the difference in the world.


Being lucky is really more about keeping an open mind at all

times, no matter what situation you’re in.


– Story about the study of people who considered themselves lucky

in life


– Example: China opportunities


– Performance review question: Does the employee keep an open mind

when approaching different situations?  Does the employee

generally display behavior that is consistent with being

optimistic (as opposed to pessimistic)?






“Work like you don’t need the money, love like you’ve never been

hurt, and dance like no one is watching.”


“It’s not the size of the dog in the fight, but the size of the

fight in the dog.”


Working in a noble profession, we share a sense of pride in what

we do.  This pride makes serving others our #1 priority.  Our

passion is an intense driving conviction to provide outstanding

service.  Our positive environment enhances our team’s excitement

and enthusiasm to provide extraordinary service.  The purpose of

all of our actions is to create loyalty amongst our customers, our

employees, and our vendors.


If service is our vehicle for success, then passion is the fuel

that gets us there.  We want Zappos to be a company that everyone

is passionate about, whether it’s employees, customers, or



Passion is infectious, and it motivates everyone who comes in 

contact with it.  Perhaps most importantly, passion breeds 

loyalty, and our goal as a company is for everyone to become 

passionate about and loyal to Zappos.


Because passion is infectious, we want employees to have a

positive attitude so that the positivity can spread to other

employees.  Employees that have an attitude that is perceived by

others as negativity do not fit well within the Zappos culture.


We want our employees to be passionate about their jobs, and to be

able to move to whatever department within the company they are

most passionate about.  We believe that passionate, positive

employees are our most effective employees.


[Begin note from Dr. Vik]


Passion makes your days fly by.  It helps you get more done in

less time.  It helps you make better decisions, and attracts

others to you.  They want to be associated with you and your



[End note from Dr. Vik]


– Example of customer loyalty: repeat customer statistics


– Example of employee loyalty: 50 out of 70 employees in SF

relocated with the company to Vegas


– Performance review question: Does the employee exhibit behavior

that is perceived by others as showing passion for the company and

his/her work?


– Performance review question: Is the employee’s behavior

perceived by others as positive in nature?  Do others view the

employee as a person that is passionate about what they do, who

they work for, and who they work with?






One of the things that differentiates our call center from other

call centers is that our reps are not restricted to reading only

certain scripts.  Instead, we empower our Customer Loyalty

Representatives to use their best judgement in dealing with our



Our customers can tell the difference, because they feel like

they’re talking to a real live person who actually cares about

them.  No two phone calls are exactly the same, and with each

phone call, our reps can deliver a WOW experience while letting

their individual personality and character shine through.


Other companies worry about making sure the way they talk to

customers and the specific sentences they use to talk with

customers are consistent.  At Zappos, we value personality over

consistency.  As long as we can WOW our customers, we celebrate

and encourage the positive aspects of each employee’s



– Performance review question: Does the employee bring a sense of

his/her individuality and personality into his/her job?  Does the

employee express his/her own thoughts and personality into his/her

interactions with others and the decisions he/she makes while at







Being open, honest, and forthcoming is probably one of the hardest 

concepts for people to get used to, because it happens so rarely 

at other companies.


At Zappos, we want to share as much information as possible with 

our employees and partners.  What we’ve found is that more often 

than not, people are afraid to ask certain questions because they 

worry that those questions might be inappropriate or off limits, 

but that’s not the case at all.


We are willing to share any and all information with our employees

to the extent that it’s legal and doesn’t not violate anyone’s

privacy.  As a step in encouraging employees to ask more

questions, we now have a weekly newsletter called “Ask Anything”  

that posts the questions (and answers to those questions) that

employees ask.  No question is too big or too small.  We hope that 

over time, employees will learn that we really are striving to be 

as open and honest as possible, and that attitude will rub off 

onto everyone else in the company.


We want our managers to exemplify being open and honest at all

times.  We want our managers to communicate and give honest

feedback to his/her employees frequently, so that the employees

always know exactly where they stand and what they need to improve

on in order for them to advance within the company.


We want our managers to share as much information about the

department and company as legally possible.


We want our managers to reward those who are straightforward and

honest, not those that only pass on good news.  Likewise, we want

our managers to paint honest pictures of their departments,

instead of attempting to paint rosy pictures.


– Performance review question: Does the employee express his/her

opinions in an open, honest, and forthcoming manner?  Conversely,

is the employee open to constructive feedback?






Studies have shown that employees that have a certain amount of 

fun while at work perform better and contribute more to the 



We want to make sure that our employees enjoy coming to work. We

want our managers to encourage their employees to remember to have



– Performance review question: Does the employee promote a sense 

of fun at work?






The Zappos brand and culture can inspire people, both inside and

outside of the company.  We value people that inspire others.

Those who are inspirational to fellow employees are candidates for

leadership positions within Zappos.


In fact, being able to inspire others is probably the most

important attribute that we look for in a Zappos employee.  


– Performance review question: Does the employee inspire others to

work harder and contribute more to the company?






Being a “little” weird is part of our brand.  Weirdness causes

people to remember the brand more deeply, because weird makes a

deeper memory imprint than boring.


It is also known as the “Unique Factor”: Something different,

special, odd, unique, or weird that sets us apart from the rest

and promotes a lasting impression.


Jack in the Box is a good example of a brand that has done a good

job with making weirdness part of their brand.  The weird things

that Jack in the Box does (blue straws, antenna head, commercials)

contributes to the positive feelings their customers have about

their brand — and makes Jack in the Box memorable.


However, we want to make sure our weirdness is only positive

weirdness, not negative weirdness.  For example, we don’t want the

weirdness of wearing the same unwashed clothes to work for 1 month

straight… that would be a negative weirdness.  However, we would

welcome the weirdness of (for example) having a company kazoo band

led by our inhouse counsel.


Being known for a little bit of weirdness can also associate a

brand with innovation and achieving the impossible, because it

says that we don’t let standard boundaries limit what we do.  It

also implies that our customers should “expect the unexpected”

from Zappos, which resonates with things we do like the surprise

shipping upgrade for customers, throwing vendor appreciation

parties, and being humble about our success when most other

companies would be bragging about it.



– Performance review question: Does the employee embrace our

culture of being “a little weird”?  Does the employee promote or

demonstrate a little weirdness in the Zappos environment in a way

that doesn’t offend other employees and doesn’t hurt our brand?






While we are serious about providing the best service, we also

realize that it’s important not to take ourselves too seriously.  

As individuals, we’re willing to laugh at ourselves, especially if 

it helps promote a sense of camaraderie and family, or allows us to 

collectively have fun.


– Example: Bald and Blue


– Performance review question: Is the employee willing to laugh at







“Power doesn’t have to show off. Power is *confident*,

self-assuring, self-starting and self-stopping, self-warming and

self-justifying.  When you have it, you know it.” — Ralph Ellison


At Zappos, we are always confident about our abilities, but never

arrogant or boastful.  We have faith that with our people and our

culture, we can accomplish anything that we set our minds and

hearts to.


While we take the time to celebrate our successes, we realize that

there is a lot of work ahead.  We realize that being overconfident

based on our past successes is the surest path to losing our way.


We are humble, modest, and unpretentious.  We don’t brag about our

successes, but instead let the facts speak for themselves.  We

treat all of our partners with respect and gratitude, no matter

how large or small they are, because we remember that we were once

a very small company as well.


We are laid-back and down to earth.  We don’t take ourselves too

seriously, and we are willing to laugh at ourselves.  We realize 

that no matter what nobody ever has all the answers, and whether 

you’re a manager, the CEO, or anyone else, it’s okay to say “I 

don’t know.”


We let word of mouth be our marketing.  Having others talk about

Zappos is much more powerful and impactful than us talking about



– Story about burning the ships


– Performance review question: Does the employee exhibit behaviors

that are consistent with being humble and unpretentious?  Does the

employees treat other employees and vendors with the same respect

that he/she is treated by them?






Once the Zappos brand/culture concepts are understood, 

decision-making at Zappos is pretty straightforward.  Anytime a 

decision has to be made, just ask the following questions:


1) What is the long-term effect on our brand?


2) What is the long-term effect on our culture?


3) What is the long-term effect on our financials?


4) Does it give us a long-term competitive edge or advantage?


5) How do the benefits and costs compare to other things we could

  be spending our time and resources on?


6) Most importantly: does it bring us closer to where we want to  

  be when we grow up?


You should apply the above thought process to the job that you do

every day as an employee.  At the end of each day, ask yourself

each of the above 6 questions and how they applied to what you

accomplished that day.  By going through this process, you should

be able to answer for yourself whether you’ve made a difference

and contributed to the company’s success and growth.




…just sharing my story and tips from my footwear career. 

Subscribe to my Blog  by filling out the info  below and then press the “subscribe” button

Share with

Leave a Reply

Related Post