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Zappos at a Glance – Provider of Choice What is a Zappos anyway? Found in 1999 A variation of the Spanish word Zapotas which means “shoes.” Zappos is a service company that happens to sell shoes, clothing, handbags, eyewear, watches and a bunch of other stuff. Zappos is powered by service Provide the best service and online shopping experience possible. Free shipping and return policy. 365-day return policy. Fast fulfillment . Expedited delivery. Free referral service to competitor sites. Best selection Over 1200 brands. Over 160,000 styles. Over 850,000 unique UPCs. Over 3 million pairs of shoes. Products are photographed in multiple angles. All products inventoried.

Zappos – Employer of Choice If you treat your employees well they treat your customers well…. Fun, happy atmosphere. Life coach. Free vending machine and dining facility. Attract and retain top employees. Ranked No. 6 CNN Money places to work.

Zappos – Investment of Choice Believe in me and my business model. 1999. Founder Nick Swinmum raised $150,000 for start up. CEO Tony Hsieh invested $500,000. 2000-2008. Sequoia capital $48Mil. 100mil line of credit. 2009. Sold to Amazon.com for $1.2Bil

Power of a Vision Zappos Vision Three Part Vision To be the company that provides the absolute best service online. Three Part Vision One day, 30% of all retail transactions in the US will be online. People will buy from the company with the best service and the best selection. Zappos.com will be that online store. A Shared Vision Equals Power The vision must be incorporated into every aspect of the organization. The Zappos vision is adhered to at all levels. Guaranteed 100% customer satisfaction with every purchase. Core concept is Legendary Service.

Importance of a Vision Shared Vision is Key Centers on collective direction. Accomplished through empowerment, motivation and accountability. Maintain a proactive stance and adapt to changing situations. Fundamentals of Zappos Shared Vision Mutual respect and admiration . Employees are an integral part of the corporate culture. Commitment to legendary service. Remaining customer driven.

Zappos Core Values Deliver WOW Through Service Embrace and Drive Change Create Fun and A Little Weirdness Be Adventurous, Creative, and Open-Minded Pursue Growth and Learning Build Open and Honest Relationships With Communication Build a Positive Team and Family Spirit Do More With Less Be Passionate and Determined Be Humble

Vision and Leadership Tony Hsieh: The Visionary Leader Build a brand focused on customer service. Created a higher purpose for employees. Encouraged employees to become more engaged. Enhanced customer service and satisfaction with happy people. Company culture is priority #1. Customer service High-Touch approach. Zappos is delivering happiness.

Zappos Legendary Service Customer Service Zappos Legendary Service 1-800 number on every Web page 24/7 life customer service representative Free shipping both ways 365 day return policy

Relentless Focus on Customer Results Blanchard Ideal Service Culture of Service Attentiveness Responsiveness Empowerment Zappos Handwritten “Thank you” cards Customer Loyalty Training 24/7 Customer Service – Blogs, Facebook, Twitter “We serve therefore we are.” Christina C. $2000 Customer Rep allowance I C A R E

Serving Customers at a higher Level Potential Customers Internal External Vendors Investors Customer Experience Fast, Accurate Fulfillment Friendly, helpful “above and beyond” customer service Refer customers to competitors’ web sites Customer Reaction New Customers through word of mouth Customers come back Repeating Customers order more

Serving Customers: Empower People Zappos approaches to empower their Employees No call time limits No sales-based performance goals for reps 5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas Zappos Culture book Interviews and performance reviews are 50% based on core values and culture fit

Self Leadership “ If we get the culture right . Then everything else falls into place” Tony Hsieh Blanchard ZAPPOS Focus on the value & identity of individual employee Self-awareness and Innovation Enhance scope of creativity without reserve Cohesive work-groups Increase Individual Self- Awareness Improve Behavioral Management & Cues Self - Goal Setting: Personal Values & Priorities Self Reward & Self – Discipline

Self Leadership: Strategies Behavior Focused Natural Reward Constructive Thought Open Mindedness Every one’s actions impact another Self-confidence Conviction Organizational Pride Innovative Ideas & Solutions Create opportunities Positive beliefs & ways of thinking

Self Leadership at Zappos Sustaining the Self-leadership Culture at Zappos Challenge Assumed Constraints Focus leadership training systems towards a deeper awareness of individual personal constraints Celebrate Your Power Points A deeper understanding of power provides breadth to expand its value Collaborate for Success Engage in Supportive Leadership Training which concentrates on emotional & behavioral elements self-leadership

Coaching: Pursue Growth & Learning Hires the right people Entry level with mindset of training to eventually take on leadership position “On a scale of 1-10, how lucky are you?” $4000 offer to leave after training if fit is not right Pipeline & Culture 4 week new hire training Answering phones Zappos History Zappos Culture Science of Happiness 101 Tribal Leadership Public Speaking Delivering Happiness Intermediate Microsoft Office

Coaching Continued Zappos Insight Team Designed to bring out best in employees and business Mage of Mayhem Goals Coach Culture Evangelist Top 3 Goals by Zappos Employees: Career Development Weight Loss Personal Finance/ Budgeting The only way to get a raise at Zappos is to engage in continuous learning and gain new skill sets.

Coaching: Outside Current Employee Base Training for college students beginning freshman year, through internships and special workshops, so that they are ready for Zappos when they graduate. Zappos Insights consulting to other businesses, including: 2 day quarterly boot camp, including: Developing Core Values Hiring and Firing Training for Leaders and Longevity Customer Service Empowerment and Engagement/Inspiring Purpose Leadership Meetings with Zappos Top Management Use of templates Online subscription to Insights Core Curriculum and blog

Zappos Compared to 5 Applications of Coaching Blanchard: Zappos: Performance Coaching Development Coaching Career Coaching Coaching to Support Learning Creating an Internal Coaching Culture Unknown Goals Coach Goals Coach; Philosophy of entry level to senior leadership Raises tied to mastering new skill sets Insight Team

Zappos Leadership: Developing a Point of View Main Elements Think About your life’s purpose, why are you here, what do you wish to accomplish? What are your core values that will guide your behavior as you attempt to live life “on purpose”? What can people expect from you? What do you expect from your people?

Zappos Leadership: Developing a Point of View Suggestions: Provide everyone with a copy of your mission, vision and values. Adopt the mindset that these guidelines are as important as your work values – and treat them accordingly. Adopt the mindset that your employees don’t work for you – you work for them. Refer to your team members as: the people I work for.

Zappos Leadership: Point of View Tony Hsieh describes his purpose as “ Generally, I associate drama with negative emotions, and I want to experience positive emotions.” His purpose is to deliver positive emotions to others. Hsieh has outlined his values in the 10 Core Values for Zappos. Those who work for Zappos can expect from the company “ an environment of fun, creativity, and the ability to be a little “weird”. Hsieh expects from his employees continuous efforts to learn and improve their performance, especially under less than ideal situations, to “do more with less”, and importantly, humility towards customers.

“Your culture is your brand!” Zappos’ Culture Zappos’ culture is centered on its ten core values All core values are measured against the CRUD test: Credible Relevant Unique Durable Values are both explicitly stated and implicitly present in action Culture happens by default or by design. Great leaders design their culture, set values in motion, and stir up the culture regularly. “Your culture is your brand!”

Zappos’ Culture Zappos relocated to Las Vegas in order to obtain a workforce that was accustomed to working 24 hours per day to deliver the standards it held itself to. Zappos seeks culture fit before skills fit when hiring new employees Zappos uses interview questions that get at the applicant’s own core values Applicants are evaluated in formal and casual settings such as happy hour with the prospective team

Zappos’ Culture Zappos leaders asked these four questions in order to stay on track to culture identification: Do you have explicit corporate values? If so, do those values reflect a blend of your founding principles and the evolving demands of the marketplace? Or are they static and immutable? What do your customers value? How do your corporate values match up with the wants, needs, and desires of your customers? Since values can be both explicit (stated) and implicit (unstated), do your corporate actions align with your stated values? If not, what do the major decisions of your business suggest about your company's real values? How willing are you to consider revising your stated values to match your demonstrated actions or revising your actions to match your stated values? What might those revisions look like?

Zappos’ Culture The following is a Tweet on Twitter from CEO Tony Hsieh regarding culture: “Breathtaking video of birds flocking - (same principle can be used to scale culture)” The flocking birds are truly representative of the Zappos culture…organized chaos creating patterns of smooth flowing processes!

Conclusion – Is Zappos a High Performance Organization? Zappos is a company like no other. Having explored their corporate structure, values, leadership attributes, and pipeline strategy, it is clear their unique corporate culture is what drives their success. With low turnover and a stringent hiring policy, they create loyalty among their employees through rigorous training. With a firm commitment to their team, Zappos has consistently hit their goals and lives their ten core values with fervor and passion.

Never stop improving customer service Could it be done better? Our Suggestions: Never stop improving customer service Managers identify gaps and help employees improve Create “Supportive Leadership” program Don’t get spread too thin so that customers don’t recognize the core business

Or do you still have questions? Did we convince you? Or do you still have questions?