Zappos & Happy Employees

True happiness involves the full use of one’s powers and talents. John Gardner in Self-Renewal

Zappos.Com has been in the business news recently. See my recent posts: Zappos, Teams and Pizza Pie and Zappos and the Dark Side of Leadership. I’m interested in the organizational work at Zappos because it is similar to leadership and consulting work I did long ago. No, Zappos organizational work is not new—just repackaged and renamed. Zappos likes to call attention to itself so we can get a glimpse inside.

Zappos CEO Tony Hsieh wants employees to be happy. He even wrote a book about happiness.

Other company’s invest in employee happiness.

The media tends to focus on glitzy stuff like a kitchen for employees, flashy meetings, and Zappos even pays people to leave the company (few take the offer). I understand the quick-fix mentality of the business world and the “for public consumption” success stories so I look with skepticism on the stories.

Here’s one organizations story and what we learned about happiness.

I led a transformation at the Star Tribune newspaper (Minneapolis, Minneapolis) in the early 1990’s. This change effort began when employees invited the Teamsters union to organize a union in the Customer Service Center: a call center that answered a million calls a year. Employees were upset with a reorganization plan for the department that leaders commanded and controlled from the top-down without employee involvement.

Senior management, determined to not have a union in this department (there were 13 unions at the Star Tribune), fired five women managers–scapegoats for the higher-ups who created the conditions for the organizing effort. I was asked to take over the department and told to defeat the organizing effort AND save millions of dollars at the same time. I created the vision for a new business unit: The Customer Service Center would join the newspaper’s Circulation field operation, which had already moved to self-managed teams.

We wanted to make employees happy to defeat the Teamsters.

We soon realized that being in the happiness business led to frustration and disappointment. We found happiness an elusive idea.

I learned that it was better to create conditions where employees could come to work and feel valued, involved, and informed and have their talents and passions utilized in jobs big enough for them–if they wanted to. Profits would grow as involved, engaged and self-managed employees pursued noble goals and they would feel alive in the process.

Back in the early 1990’s, not many books were available to help us chart our course. We had to learn on our own with the help of a consultant by the name of Diane Olson who practiced as a clinical psychologist and organizational consultant. She guided our process, made sure our decisions were consistent with our vision and values and helped us understand how to lead in a new kind of organization. We learned to understand and incorporate the emotional side of change into our leadership. We were action oriented: we planned (but didn’t get bogged down), took action, reflected on what happened, and adapted as we went–just like all pioneers.

Such an organization–much more difficult to work in and lead than the mechanistic model of command and control– required trust, diversity, relationships, excellence and a tough-love leadership. I had as much or more to learn than anyone. I asked for regular feedback and received it. I apologized often for my slips back to the old ways of leading.

Here’s what employees did in the customer service center:

•I met with employees in groups of 10 and described to them what we had already done with self-management in the field operations. I invited them to join in the vision of employee engagement/involvement, value driven leadership, and the goals–in this order: to improve employee quality of work life, improve customer service, become faster moving and more creative, and increase revenue/cost savings. The employees choose to join us.
• I selected my staff and got the right people in place.
• Employee groups worked to design 15 self-managed teams, and a skill-based pay system. We invited the more skeptical and outspoken employees to become change process teams who insured that employees felt valued, involved and informed as we went through change. They reported to me and became engaged.
• We downsized the workforce by 35% and eliminated most supervisory positions (see my post Zappos, Teams & Pizza Pie).
• Employees created and implemented a process that required all employees to apply for the new positions (jobs big enough for them) and teams.
• We saved millions of dollars, customer service measures improved dramatically and we celebrated.

In the process, we freed up vast untapped energy, talent and potential in employees.

Were the employees happy? I think so. They accepted the difficulties of this change and rejected the Teamsters union.

I felt inspired and I left the company to return to graduate school at age 48 to complete a Ph.D. in Leadership and Organizational Change and to teach others about leading the transformation from a mechanistic world view to a living system world view and how a shift in organizational metaphors leads to dramatic changes in how we work, lead and follow.

I learned over the years that I am responsible for my happiness. I use the Sigmoid Curve as a model to review the stages of my life and help me to become aware of the need and time for continued evolution in my life hence more time of flow or feeling alive. Organizations can use this model to find the right time to change before decline sits in. Enterprises don’t renew themselves just once: they do it routinely from the peak of their success to a new vision of their organizational life—that is, if they want their enterprise to be sustainable.

I agree with John Gardner: happiness comes not from perks but as an outcome of the pursuit of noble goals.

4 thoughts on “Zappos & Happy Employees

  1. I agree with much of what you wrote, but in the end you did cut the workforce by over 1/3 leaving a lot of people without jobs.  On the other hand, jobs were a tad more plentiful at that time then they are today.  I have never liked being over managed or supervised.  Once I learn a job and feel confident that I know what I’m doing, I prefer to be left alone.  But, I do appreciate having someone to go to should I have questions.  Problems these days, post Reaganomics aka trickle down economics is that corporations and their CEO’s have become greedy.  Not all, but many of the major players.  There is no trickle down, just a constant cry to cut their taxes more and more and if we just do that there will be all sorts of jobs and the economy will get better.  We’ve been drinking that coolade for 35 years and nothing has gotten better.  Same with the trade deals.  The last one with Korea promised 70,000 jobs and we lost 75,000 jobs.  No different than any other trade deal and now we’re asked to go along once again with a huge trade deal that corporations mostly wrote and deals only 20% with trade and the rest is all pro corporate stuff and our President says that mfg jobs is a ship that’s sailed?  I got side tracked here, which I often do.  hahahahaha  Anyway, there are a few good guys left out there with a moral conscience and some ethics left like this guy at Zappos.  A happy worker is a productive worker but many large, soulless corporations don’t get it. Judy From: Tom’s Thoughts To: Sent: Tuesday, May 19, 2015 8:32 AM Subject: [New post] Zappos & Happy Employees #yiv3212060135 a:hover {color:red;}#yiv3212060135 a {text-decoration:none;color:#0088cc;}#yiv3212060135 a.yiv3212060135primaryactionlink:link, #yiv3212060135 a.yiv3212060135primaryactionlink:visited {background-color:#2585B2;color:#fff;}#yiv3212060135 a.yiv3212060135primaryactionlink:hover, #yiv3212060135 a.yiv3212060135primaryactionlink:active {background-color:#11729E;color:#fff;}#yiv3212060135 | Tom Heuerman posted: “True happiness involves the full use of one’s powers and talents. John Gardner in Self-RenewalZappos.Com has been in the business news recently. See my recent posts: Zappos, Teams and Pizza Pie and Zappos and the Dark Side of Leadership. I’m interested ” | |


    • Thanks for the comment, Judy.
      All our downsizing was voluntary choices to leave with severance, retirement, etc. We had a no layoff policy. I was glad I never had to lay anyone off involuntarily.


  2. The transformation at the Star Tribune was as amazing as Tom makes it out to be. I lived through it and will never forget the principles he taught us. I was a Team Leader at the time and it was amazing to watch the employees become independent, responsible and yes, happy employees (in most cases).


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