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Podcast with Tony Hsieth, CEO of Zappos

Tony Hsieh
Tony Hsieh

Tony Hsieh, CEO, Zappos Delivering Happiness: A Path to Profits, Passion, and Purpose

Welcome to a Leadership Channel Podcast on TotalPicture Radio, this is Peter Clayton Reporting. Joining us today is Tony Hsieth, CEO of Zappos. Tony's new book, Delivering Happiness A Path to Profits, Passion, and Purpose, explains how an emphasis on corporate culture can lead to unprecedented success... and how ignoring an organization's culture can create an environment of mistrust and anxiety.

In 1998, Tony Hsieh sold LinkExchange, the company he co-founded, to Microsoft for $265 million. He then joined Zappos as an adviser and investor, and eventually became CEO.

Written in a conversational, straightforward tone, Tony's new book, Delivering Happiness A Path to Profits, Passion, and Purpose, explains how an emphasis on corporate culture can lead to unprecedented success... and how ignoring an organization's culture can create an environment of mistrust and anxiety.

Here's a few of the ideas Tony has put in place at Zappos: Pay new employees $3000 to quit. Make customer service the entire company, not just a department. Focus on company culture as the #1 priority. Apply research from the science of happiness to running a business. Help employees grow both personally and professionally. Seek to change the world. Oh, and make money too.

Sound crazy? It's all standard operating procedure at Zappos.com, the online retailer that's doing over $1 billion in gross merchandise sales every year.

In 2009, Zappos was listed as one of Fortune magazine's top 25 companies to work for, and was acquired by Amazon later that year in a deal valued at over $1.2 billion on the day of closing.

In his first book, Tony shares the different business lessons he learned in life, from a lemonade stand and pizza business through LinkExchange, Zappos, and more. Ultimately, he shows how using happiness as a framework can produce profits, passion, and purpose both in business and in life.

Questions Peter Clayton Asks Tony Hsieh

I listened to your interview with Jason Calacanis on This Week in Startups -- and one of the things that really stood out was why you were happy to share LinkExchange and why you left early with lots of money on the table. Can you talk to us about this?

In reading your book -- you've taken some pretty radial approaches to hiring and management -- and like you just said, you've made culture the number one priority at Zappos -- do you think it requires a start-up to create the kind of culture and environment you've established at Zappos?

One of the things I really like about your book -- it's written in a very conversational style -- like if I met you in a bar somewhere and asked, "Tony tell me about yourself." Back to LinkExchange for a minute, I did a lot of work in Silicon Valley in '98 and '99 -- and it seemed if you had a pulse you could get a job. Am I right?

Well, as you write in your book Delivering Happiness, Zappos went through some very tough times after the dot-com meltdown, and there was no guarantee you were going to make it. And you really ended up individually "betting the farm" -- was there something about Zappos that made you invest everything you had and really want to see it through?

In the preface to your book you write, "I've always been an avid book reader. At Zappos, we encourage our employees to read books from our library to help them grow, both personally. There are many books that have influenced our thinking at Zappos and helped us get to where we are today." Can you share a couple titles with us?

Well thanks for sharing those with us. I've actually had Dave Logan, one of the authors of Tribal Leadership on TotalPicture Radio -- and for those interested you can find Dave's podcasts in the Leadership Channel... One of the books I thought about when I was reading Delivering Happiness is Bob Sutton's No Asshole Rule -- one of my favorite interviews -- and it seems like you've take Bob's advice to the next level where cultural fit is really the key criteria. Am I right?

Something else I think played into your success at Zappos -- early on you outsourced distribution to a company in Kentucky which turned out to be a very bad decision -- and you took some very immediate, and radial steps to solve the problem -- can you talk about that?

Speaking about outsourcing -- one function that get's outsourced a lot is the call center -- and it's usually thought of as a pure expense and run as inexpensively as possible. Zappos has taken a very different approach making your call center really a key competitive advantage.

What did you learn in writing your book?

Excedrin with Red Bull, right?

What do you think is the most important takeaway from this book, Tony?

It seems to me the Zappos formula could be directed to many different things besides shoes and clothes -- have you thought about expanding into different areas?

Why do you pay new employees $2000 to quit?

Zappos started in San Francisco. Why did you move the company to Las Vegas?

There's another book your involved with -- it's called the Culture Book and it's written by your employees. What it about?

One last question for you Tony. Amazon bought your company and part of the negotiation from my understanding is the Zappos culture needed to stay intact, and you're still running the company -- somewhat independently from the mother ship...

Today's podcast is sponsored by RecruitingPods.com. If you're a third-party recruiter or staffing agency, visit recruitingpods.com to learn how we can make you the star of your own podcast. And while you're there, check out our latest episodes of Travel Nursing Insider and the Onward Search Career Cast. This is Peter Clayton Reporting, Thanks for tuning in to TPR the voice of career and leadership development.

Peter Clayton

About Peter Clayton

Peter Clayton, Producer/Host, is an award-winning producer/director of radio, television, documentary, video, interactive and Web-based media who has created breakthrough media for a wide array of Fortune 100 clients.


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