Tony Hsieh — Leadership Style & Principles
How to define the leadership style of Tony Hsieh, who passed on Nov. 27, 2020 from injuries suffered in a house fire? What can we learn from his leadership style?
Tony Hsieh, founder and CEO of Zappos, is widely regarded as one of the most successful CEOs of our time.
Under Tony’s leadership, Zappos has ushered in a new era of customer service and values-based business culture — a model that many businesses are trying to emulate. Although he did not dream up the idea of a holacracy, Tony Hsieh was the key figure when it came to establishing the concept and implementing it.
Tony Hsieh retired as the CEO of the online shoe company Zappos in August 2020 after 21 years.
Hsieh cofounded the Internet advertising network LinkExchange, which he sold to Microsoft in 1998 for $265 million. Then in 1999, he joined Zappos, which Amazon purchased in 2009 for $1.2 billion to become an expert in company culture.
What is very unique about Zappos is how Tony’s leadership style impacted the company culture.
This is a factHe fixated on creating a culture that united employees around bringing customers the best service possible. By concentrating specifically on customer service, Tony Hsieh was able to “WOW” his customers and build a loyal customer/fan base.
Tony Hsieh had a hard time convincing the board of directors at Zappos to maximize profits by focusing on culture in the long term, while they just wanted to focus on financial performances.
But he finally scaled the business from nothing to over 1 billion in less than 10 years, affirming that that company culture is what made the difference between success and failure. Under his leadership, he literally skyrocketed the business.
As our tribute, here are seven leadership lessons learnt from Tony Hsieh’s life, career and writings.
Tony Hsieh’s powerful work, ideas, vision, and legacy proofs the great entrepreneur, leader, and role model he was. Here are perhaps the most powerful leadership lessons from Tony Hsieh. He had a short, yet inspiring career.
Open Your Mind
Tony Hsieh made customer service the differentiator in online business. Even better, the bar he set has helped raise the customer experience across industries and platforms.
If there were such a thing as a weirdness scale, Tony Hsieh would certainly have had a high score.
This is a factHis creativity was unparalleled and sometimes uncontrollable. He would repeatedly throw his employees one eccentric idea after another. Then it was up to them to maximize the potential of those ideas.
At Zappos, contact center reps don’t use scripts, and their bosses don’t measure call time.
Translation: Reps can stay open-minded to what customers say and are given the time to be as creative as possible to make the experience superb for customers. That’s much of the reason Zappos’ customer satisfaction scores are consistently in the 90s.
A manager with their own raison d’être is a fashionable concept nowadays, but beyond the term itself, there is often nothing more than empty rhetoric.
However, in a holacracy, where there is no manager in the usual sense and individuals manage themselves, the raison d’être becomes vital. This approach unites the actions of individuals who will contribute to its realization through their own skills, abilities and involvement.
Adaptability is about the ability to make small and perhaps unexpected adjustments to processes, responding to expectations or even making fundamental changes in strategy.
This is a factWhere there is excessive standardization in the quest for reliability, it can make companies insensitive to changing markets. Often, large companies lean towards reliability but end up creating rigidity and bureaucracy as a result.
Leaders need to be open-minded. They need to break out of their normal thinking patterns to find innovative ideas.
A leader does this by being ready for anything and acknowledging that they don’t have all of the answers. Being open-minded allows leaders to see things from a different perspective or how things can be applied in new and novel ways.
📚 Additional reading
Business leaders must learn to be more open-minded, which means being receptive to the views, ideas and knowledge of others. We need to do more to value, select for and develop open-mindedness, for it is the dynamic balance between forceful action and open-mindedness that defines outstanding leadership.
Have Fun In The Sun
So much of the corporate world — customer service, in particular — can be mundane, which can hurt morale and the drive to do a great job. It wasn’t something Tony Hsieh wanted for Zappos.
That’s why Tony Hsieh encouraged Zappos’ leaders do what they can to make the workplace more fun.
This is a factIn fact, the Third Rule on the Zappos Family Core is: Create Fun and a Little Weirdness. The company tries to hire naturally creative and fun people. Customer service employees often add their personal dose of humor when they help customers.
People desire a leadership refresh in their organizations.
Employees want leaders that are likeable, understand their needs, can authentically motivate people and know how to energize a workplace culture to generate the best results for the organization. The traditional leader still employs the old school ways of doing things that make it difficult to engage a workforce that is more diverse than ever before.
Relax and lighten up a bit. Don’t take things so seriously!
While your job as a leader is important, it isn’t life or death for most of us. The relationships you build with those that you work with are important too. You can’t be stressed, angry and happy at the same time — choose to be happy!
When it comes to the competition for talent and building great teams, organizations that provide an environment in which employees are able to have some fun and enjoyment are likely to have the last laugh.
This is a factOrganizations that have a strong culture of fun and believe in the benefits of person-organizational fit are more likely to deliberately seek out, attract, select, and retain employees who share fun as a common value. Those employees are more likely to have a positive perspective on fun events.
📚 Additional reading
Having fun doesn’t mean nothing gets done. On the contrary, you’ll experience more enjoyment, productivity, engagement, and camaraderie.
Culture Over Slogan
Running your business based on culture help create alignment among employees. Zappos developed ten core values that guide every employee’s decision-making process.
Right from the start, Tony Hsieh understood that building and sustaining a powerful company culture was the foundation of any successful organization.
This is a factWith clear values, Zappos doesn’t need to evaluate team member’s performance in the traditional way. It let the employees reward each other with “Zollars” when they do something unique aligned to the core values of the company.
A thriving culture increases employee engagement, which in turn, helps communicators better strengthen their employer brand and more easily uncover compelling stories.
Culture helps to both retain employees as well as attract top talent, and with more consumers purchasing from organizations that align with their values, culture can also affect your bottom line.
Zappos’ company values are not just empty slogans.
This is a factThey guide the company in all decisions that are made on both a strategic and day-to-day level. An employees success in the company is directly related to how the live up to these core values. If they are failing to meet them then this is grounds for being fired.
Zappos’ most important asset is their people. Their offices and policies are made to make them happy.
They offer to all employees, no matter their role, a four weeks customer service training that includes topics such as the company purpose, the core values and the history of Zappos. Afterwards, the company offers the new hires $2000 to quit. If employees are not engaged, they prefer to let them go quickly.
📚 Additional reading
If you get the culture right, everything else is a natural bi-product of that. If you get the culture right, everything else is a natural bi-product of that.
Support Your Staff
A desire to micro manage is something that many leaders find it difficult to avoid. However Tony Hsieh believes that the primary purpose of a leader is to enable people to do their best work.
At Zappos Tony intended to create an environment which allows people to realize their full potential.
This is a factDon’t forget that people who are on-board with your vision have their own dreams and aspirations. Try to think of ways you can make their job more enjoyable. For example, Zappos employees claim that they make decisions on their own. How great does that sound?
Start by examining and strengthening the relationships within your workforce, especially those your employees have with your leaders.
Especially during COVID-19 as employees grapple with uncertainty and many are working remotely, it’s crucial to consistently and transparently reach out and offer support. Empowering your employees can increase productivity and innovation — and it can also enhance loyalty and attract future talent.
At Zappos, provided you are working according to the companies stated values then you will be fully supported. A lot of companies like to talk about integrity but fail to back their employees.
This is a factA good example of this is a customer support call at Zappos that took over 10 hours. In many companies spending a whole work day over a relatively small order would be viewed as incredibly unproductive. However at Zappos this kind of customer service is celebrated.
It is also very important for any company to promote empathy among their employees so that the work place can be a supportive and unified entity.
Showing those around you that you understand where they are coming from shows them that you care, which goes a long way when problem solving, promoting employee engagement, and in general building great relationships.
📚 Additional reading
Often, leaders make the mistake of neglecting relationships between teammates. Sure, a leader should always be focused on the main objectives, but that’s not to mean that there’s no room for forming quality relationships.
Hire Slowly, Fire Fast
Since the beginnings, Zappos protects and preserves its culture by hiring and onboarding those people who actually want to be there. Intrinsic factors such as being inspired by your work are actually much more important for motivation.
Zappos began hiring individuals who they not only felt could complete the work, but also individuals whose personalities fit in their company culture.
For hiring managers, a match to their culture was even more important than hiring someone who was the most qualified for the job. They understood that if they selected individuals who were known to be very qualified short term, but long term would not fit the company culture, then that hire was a bad decision.
That’s why Zappos hires based on 2 fits. Fit for the hiring position and fit for the culture.
This is a factAfter an interviewee is determined to be a great fit, Zappos offers them something very intriguing. A new hire has a chance to get paid for the training, plus a $3000 bonus if they reject the hiring offer. Only about 2-3 percent of people take that offer. It’s a great bargain for the company to onboard people who are there for the right reason and not just a paycheck.
While on the surface cultural fit may not seem like a critical factor in the hiring process it is arguably one of the most important selection criteria.
This is a factEmployees who do not fit in with your culture negatively affect those around them. They can stifle the enthusiasm, motivation and dynamics of your team. And poor employee motivation diminishes the productivity and profitability of your organization.
While the social test may not be as demanding for every job, before making a hiring decision, candidates will meet with multiple Zappos employees.
This usually involves attending some type of department or company event enabling the employees who are not interviewing to meet the prospective employee informally. Social testing is a great interview technique and a good way for employees and team members to evaluate candidates.
📚 Additional reading
Hiring the best employees is a foundational managerial skill. And what Zappos has showed us is how important hiring for cultural fit is. Zappos uses many unconventional interview techniques but you as an everyday manager can achieve the same objectives.
As CEO, Tony Hsieh wasn’t worried about stock-price goals, making his bonus, or being the center of the attention. Instead, Tony was someone driven by big ideas.
Tony Hsieh was passionately committed to using the power of business as a force for good.
He was deeply invested in uplifting the ecosystems that surrounded Zappos. His humane and novel values empowered him to experiment and create, to be deeply connected with his customers, be loyal to his company culture, and see life through an innovators’ eyes.
To making your employees happy, Tony Hsieh offers a simple prescription — “just talk to your employees. Ask them what would make them happy”.
This is a factAsking your employees what would make them happy and then giving it to them might sound simple but as Zappos has shown it can be incredibly effective. This includes ideas such as the laughing yoga classes, a full-time life coach and free lunches.
Very soon, Tony Hsieh understood the importance of creating options for a better life for others. He understood that profits and passion are not enough.
This is a factHe aligned his passion with a sense of purpose. He focused on creating joy and invested in people who did the same for the customers. He was passionate about customers and delighting them. He was passionate about building companies that scale and deliver an unorthodox company culture.
Chase the vision not the money. Tony Hsieh is very convinced about this idea.
Focus on problems and customers that you like the most. Money will follow. After selling his first startup, he was able to invest in dozens of startups. It was his choice to join Zappos.
Practice What You Preach
When birds fly they look like one organism. Birds do have very simple rules while traveling. Have some distance from the bird to the left, have some distance from the bird to the right. They are not guided by one main bird that tells them what to do.
Commit to your company culture principles and your team will be united. That’s how Zappos was able to scale their team culture.
Back up your statements and values with meaningful actions. Follow up with your diversity, equity and inclusion commitments by outlining what you’ve done along with plans for the upcoming weeks and months. Invite your employees to be active participants and partners in these efforts wherever possible.
People may not remember exactly what you did, or what you said, but they will always remember how you made them feel.
This is a factThe Zappos team created a set of 3 things that are essential for the brand: Clothing, Customer Service, Culture. By putting it all together, they have realized that Zappos is about delivering happiness. That’s a genius way to distill your mission.
One of the consistent complaints a majority of leaders face is not communicating enough to their employees.
This is a factAnd what Tony’s example reveals is that it’s not how much you speak to your employees, it’s what you’re telling them when you speak that matters. Tony clearly understood the power a leader’s words have to not only inspire others, but to help them understand the impact their contributions have on moving things forward.
Regardless of what you say or write, your people are learning what really counts by looking at what their leaders do.
For example, we can talk all day long about practicing blameless problem-solving or honoring commitments, but if someone gets caught up in blame whenever a problem occurs, then those words mean little to nothing. The leader is the one who most directly influences most employees’ experiences with your culture.
📚 Additional reading
If you want your influence to be positive and productive, you must be clear on what you want from others, and then make sure your actions (as well as your words) support that. When you do this, you are leading by example in an intentional and productive way.
Zappos is a unique company in today’s business landscape, but Tony Hsieh’s leadership lessons make great advice for any business. Turning vision into impact is no easy task, but these principles are a great place to start.
WOW is such a short and simple word, but it encompasses a lot of things.
This is a factTo WOW, you must differentiate yourself, which means do something a little unconventional and innovative. You must do something that’s above and beyond what’s expected. And whatever you do must have an emotional impact on the receiver.
Tony Hsieh is not with us anymore, but his legacy and vision on building his professional path will live with us forever.
It’s why I have little doubt his leadership style will continue to shine brightly and inspire others to always do right by those under their care. Under Tony’s leadership, Zappos has ushered in a new era of customer service and values-based business culture — a model that many businesses are trying to emulate.
Tony Hsieh aligned his passion with a sense of purpose. He focused on creating joy and invested in people who did the same for the customers.
This is a factEven though Tony Hsieh left the world on a sad note, he was standing firm on the idea that we also should focus on happiness. By happiness he didn’t mean running after every pleasure but rather fulfilling purpose.
I guess you should take a lesson from this article and apply it to what you do. Have anything to add about Tony Hsieh? Have you ordered from them? What was the service like? I’d like to hear your feedback in the comments!
Digital Dandy. Hacker From Heart. Workaholic. Coding Artist. Self-made.