gtag('config', 'AW-943903666');
             

An Offer Worth Taking

Most employees think their boss sucks.

By Eric Harrison

That’s a feeling completely distinct from management skills; 58 percent of workers say they trust a stranger more than their own boss. Given the basic role trust plays in any functioning relationship, that’s not a recipe for high-performing teams. Before people point fingers at their managers, though, it’s worth noting the same percentage of managers (58) haven’t actually received any management training. This broken relationship—employees who don’t trust their managers and managers who don’t know how to manage—has consequences that extend far beyond high turnover or delayed product releases. 

The ideal relationship between a company and its customers is one of mentorship and empowerment. Prospects exist in a broken world, besieged by problems ranging from existential to benign, where they encounter a brand who reveals how much more is possible—and convert into customers armed with the magical product and guidance which allows them to resolve their deep pain. This storytelling arc is compelling and time-tested, but for an organization to capitalize on it, all employees must be aligned behind the promises it makes. The mentorship an organization claims for its customers begins with the structure it uses to model that role for employees.  

Zappos, an online shoe delivery company, recognized early on the potential for mentorship to create a united team that advances the narrative both internally and externally.  

 The original founder of Zappos, Nick Swinmurn, wanted a specific pair of boots, but was unable to find them at his local San Francisco mall. He knew that access to a limited selection of quality footwear couldn’t just be a problem for him. He partnered with Tony Hsieh (who eventually became CEO), and the two entrepreneurs began to build a company whose customer service would be its sole differentiator. 

 When Zappos launched its online store, the company figured the concept was compelling in and of itself. But Hsieh in particular knew that Zappos’ couldn’t gain the momentum it needed by just offering a wider variety of products in the market—the footwear company needed a narrative that customers could believe in.  

 Over the course of its first five years in operation, Zappos implemented policies such as 60-day returns, as well as 24-hour customer service (which was nearly unheard of at the time). “Buying shoes online can initially be a scary process for people,” Hsieh said. “But Zappos has withstood when other dot-coms have failed because we provide the best customer experience, such as free shipping both ways. Even though free shipping of both orders and returns has cost us more, it has enabled us to keep our customers longer.”  

This type of maniacal customer focus required a team with the same attributes, including at the managerial level. Hsieh observed: “Our number one priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own.” 

Hsieh’s first job (at Oracle) only lasted five months—not because he wasn’t good at it, but because he didn’t feel valued by the brand. Oracle had built a legendary business, but its culture failed to empower Hseih to mentor customers as he felt was needed, and it inspired him to become an entrepreneur.  

When Hseih began leading Zappos, he quickly implemented the cultural elements that he felt would model the mentorship he wanted the company to show customers. In 2005, Zappos began its first dual interview process. Rather than building interviewing criteria based on talent alone, Zappos made candidates go through an initial culture interview. If they didn’t appear to be a good cultural fit based on this conversation, they were rejected no matter how talented they were.  

For those potential employees that did make it to day one, Zappos implemented a “new hires boot camp,” which allowed new hires to absorb the company culture over their first three weeks. If a new hire felt they weren’t a cultural fit by the end of the bootcamp, they’d be offered $100 to quit. By 2019 that offer had grown to one month’s salary. But Hsieh still felt he hadn’t created the culture required to cement trust with customers.  

Zappos adopted 10 core values that the brand still uses to this day to benchmark potential hires and current employees. One value, “Do More With Less,” stuck out to Hsieh in particular. He knew that just hiring the right people and calling them a “Zapponian” wouldn’t be enough to build the culture he wanted, he needed leadership to fully align behind the brand’s customer commitment.  

That’s when it clicked: Hsieh saw that standing between his vision and the people were a bunch of bad bosses. In a brand where everyone works for the customer, Hseih determined that to achieve its story, Zappos had to eliminate middle management completely. Media outlets called the decision a “radical management experiment.” When the transition to a flatter organization didn’t move quickly enough, he offered a buyout package to those who weren’t aligned, and 18 percent of the workforce fled.  

But 82 percent of Zappos’ workers remained, and embraced what Hseih called holacracy: titles were stripped away, allowing what were once lower-level employees—those closest to the customer—to have great impact. This would allow his team, the people that made Zappos’ story possible, to have a say in the decision-making process.  

As a final move for Hseih to get his team as closely aligned with the brand story as possible, he needed to ensure newcomers fit the customer-first culture he built, and began making “The Offer.” After their first week with the company, employees would be given a choice to continue or leave. As an incentive to leave, those who quit were paid $1,000 to do so. Bill Taylor explains in Harvard Business Review: “If an employee is willing to take the company up on The Offer, they obviously don’t have the sense of commitment that Zappos is looking for.”  

Zappos’ success isn’t an argument for every company to eliminate all management. But it does affirm that for an organization to successfully be the mentor it describes in its story, it must align its structure to execute on that promise. In the case of Zappos, themes of customer delight and responsiveness no matter the cost mandated an environment where every employee needed agency and voice to deliver on that promise. 

Zappos didn’t eliminate the accountability that a typical manager would have been responsible for, it simply shifted it in a manner consistent with its story. When story and mentorship tie seamlessly together, the outcome is a united team who forwards the mission of their brand story.  

The perennial challenge of management has been stated best in Harvard Business Review: “Instead of being stuck in the middle, managers [must] be free to focus on something that is infinitely more important: building and connecting the people that are the true lifeblood of any organization.” An effective brand story eloquently models that that connection should look like.  

The story of Zappos and the legacy left behind by Hsieh wasn’t an accident. It’s proof that when management chooses to serve as a mentor to an organization’s employees rather than a traffic cop, their team responds by delivering on their promise: an offer that business leaders simply can’t ignore.  

 

Eric is an associate at Woden. Want to stay connected? Read our extensive guide on how to craft your organization’s narrative, or send us an email at connect@wodenworks.com to discuss whatever your storytelling needs may be.