Tony Hsieh is the CEO of the terrifically successful online shoe and clothing store Zappos. He’s also the author of a brand new book called Delivering Happiness: A Path to Profits, Passion, and Purpose.
I talked with Tony about his new book, how to “deliver happiness,” and what it all means for folks who work in radio.
Listen to this podcast for our full conversation. What follows is only an excerpted transcript. MP3 File
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Tony, one of the things that struck me about your book is that the first half is really quite different from the last half. The first half is all biography and the last half is really all “how to, why to, and what to.” Do you think the first half is required to appreciate why the second half is so important?
It’s an interesting question because when I first envisioned the outline of the book, I actually didn’t really want to write the first half, and the editor really wanted me to, and so I did it. Everyone seems to get something different out of the book, and so a lot of people told me their favorite part was the first half, and then one person said the first half was exciting, but the second part was inspiring in terms of what they could actually do to their own business.
I guess the short answer is I actually think my editor made the right decision because the first half sets the stage for why the second half is the way it is.
I’ve made a lot of mistakes over the different businesses that I’ve been involved in, and at Zappos, we made a lot of mistakes, too. And so, really, it’s more a story about the mistakes we made and the lessons we learned that led us to believe in the principles that are central to Zappos. And so that’s actually why the subtitle of the book is A Path to Profits, Passion, and Purpose, meaning, a path – we wanted it to be less prescriptive and let the reader take whatever applies to them.
Delivering Happiness is the name of the book; it’s also a mission of Zappos. When I think of Radio, I think of an industry that likewise is in the business of delivering happiness, and then it occurred to me, if you’re delivering any product, any service, isn’t your ultimate objective to deliver happiness?
Yeah, and that’s why one goal of the book is actually to start a happiness movement.
I think 50 years ago you had to choose between profits and either employee happiness or customer happiness. But today, we live in an age where information travels so quickly through blogs, through Twitter, that companies are becoming more and more transparent whether they like it or not. And because of how quickly information can be passed, we have stumbled into a situation where you can have it all; you can make employees happy, you can make customers happy, and you can make investors happy through combining all three of those thing – profits, passion, and purpose.
This book is about how we do that at Zappos and hopefully, some of the ideas will help your business to really make your own employees and customers happy in a way that’s appropriate for your industry and for your culture. And it has been pretty cool because I‘ve actually gotten emails from people that have read advanced copies of the book. One guy emailed me and said after he read the book, he quit his job and went to pursue his true passion.
We’ve heard from others… there’s a refrigeration repair company in Atlanta that has field technicians doing refrigeration repairs, a completely different business from Zappos, and they’ve taken the whole concept of core values and culture that I talk about in the book, applied to it to their business and totally transformed their business. Their employees and customers are happier, their revenue is growing, and profits are growing. It’s really rewarding for me personally to hear stories like that.
You’ve mentioned the word “culture,” and you say in the book, the best way to build your brand is through your culture. I guess the question I would ask is, is culture something that you create or something that happens to you?
It’s a combination. It also depends on how much attention you pay to it.
There is so many companies – especially larger companies – that don’t have great cultures, and it’s because they let the culture just happen to them. But if you actually make it a company priority (and for us at Zappos, it’s actually our number one priority), then it’s something you co-create with all the employees.
And co-creation figures prominently in the development of the core values that you spend much of the second half of the book on. What struck me is that there is undercurrent of fun and informality in many of the things you do at Zappos, and it was very reminiscent, in fact, of how we think of radio station culture over the years. I wonder how important you feel that is?
For us at Zappos, it’s super important. That’s one of our core values is actually, literally to create fun and a little weirdness. It’s kind of baked into what we do at Zappos.
I talk about books like Good to Great: Why Some Companies Make the Leap… and Others Don’t
where they looked at what separated the “great” companies from the “just good” ones in terms of long term financial performance, and one of the really important ingredients was that the great companies all had very strong cultures.
What they found out was that it actually doesn’t matter what the core values or what the culture is, it’s that you have core values and that everyone is aligned to them.
We have what works for us at Zappos, but really the message to other companies is you should figure out your own core values, and the book helps you to step through that process and do what’s right for your company.
Yes it does, as a matter of fact. One of the realities about radio is that our industry isn’t necessarily full of long-term thinkers. Now Zappos is part of Amazon. And you wrote “One of the great things about Amazon is that they are very long-term thinkers just like we are at Zappos.” I have to ask, what’s so important about a long-term thinker, and if it’s so important why aren’t more companies full of long-term thinkers?
Part of it is having the patience and part of it is that feedback cycle or feedback loop. So for investments and culture or even customer service to pay off, usually the payoff is two or three years down the line. And when you’re busy in the day-to-day of regular business it’s easy to lose sight of that. It’s easy to forget about setting enough time or resources to really invest in customer service or company culture. People are generally rewarded for shorter-term performance, whether it’s quarterly or annually.
As CEO of Zappos and now in marketing the book Delivering Happiness, you’re part of media now. Radio is part of media, too. I know that Zappos per se isn’t a big user of traditional radio, but how do you see radio in 2010 and beyond?
I listen to the radio on my commute every day in the morning. For Zappos, we want to be about high-touch customer service and really developing that personal emotional connection with customers, and so we actually invest a lot of our resources into answering phone calls. We put our 1-800 number on the top of every single page of our website because we actually want to talk to our customers. We’ve done studies where we found that once we’ve had that personal interaction with a customer, then those customers are way more loyal and generate way more revenue for us, and so we actually try to encourage that interaction. It’s much tougher for an Internet company to do that than for, say, a brick and mortar company.
I think radio has a great advantage in that you can really develop that emotional connection. I feel like when I hear the morning talk show host whom I’ve met once or twice, I feel much more connected to that station and to that show.
When you’re talking about connection in that context, you’re talking about connection to people, right? So when I say “radio” to you, your first thought is the people at the other end of the mic.
For me personally, yeah.
Final question, bottom line, what is the secret to delivering happiness?
I don’t know if there is a secret.
The last section of the book actually gives a Cliff Notes version of some of the research that’s come out on the science of happiness. I don’t think there is any one simple answer because if there were, then everyone would be happy. You just print it up in a newspaper and you’re done.
There are always different things that contribute to different people’s happiness, but one of the consistent things is that people are actually very bad at predicting what would bring them happiness in the long term.
There are so many studies of lottery winners, for example, where you look at their happiness level right before winning the lottery and then a year afterwards. One year later, happiness is either the same or maybe even a little lower; whereas most people would predict their happiness level would go up a year after they won the lottery. So for starters, be aware that what you think will bring you happiness may not actually be the right answer. Many business-owners think, for example, once I get to this revenue number, then you’ll be happy. Or if you have a job, once you get promoted, then you’ll be happy. Most of the time, that’s actually not the case, so people are spending a big chunk of time working towards something that’s not real.
Also, you have to understand the different frameworks that have come out of the research and apply them to your own life. For example, social connections – more and deeper, meaningful relationships – tend to positively affect happiness. That’s one of those things where it will pay off in the long term, especially if you’re a more introverted person like I am.
Tony Hsieh is the introverted CEO of Zappos.com and the author of a terrific new book that comes out in June called Delivering Happiness: A Path to Profits, Passion, and Purpose.
We’re actually giving away a free advanced copy of the book everyday between now and the June 7th launch. Visit www.deliveringhappinessbook.com, and you can sign up.