Voiceover: What if, once a year, your company holds a “bald and blue” day? If you want to show company spirit, you can either shave your hair or dye it blue. And imagine if one of the people shaving his head is your boss.
Reporter: You’re not nervous at all, shaving the boss?
Woman:…
Voiceover: Welcome to the rather wacky world of Zappos.com. It’s an online shoe and merchandise company where business as usual is anything but. At a time when many retailers are struggling, Zappos, derived from the Spanish word for shoes, zapatos, is thriving, thanks in part to a unique company culture and it’s 36-year-old CEO, Tony Hsieh.
Hsieh: Our whole belief is that everyone’s a little weird somehow, and it’s really more just a fun way of saying that we really want people’s true personalities to shine in the workplace.
Voiceover: Tony Hsieh so believes he’s been able to create both passion and profits that he’s outlined his philosophy in Delivering Happiness.
Hsieh: The book is another way to help spread the message that it’s possible to actually make employees happy, make customers happy, and still make investors happy, and still have profits.
Voiceover: He’s not kidding. Zappos is now so successful that last year, Amazon paid $1.2 billion to acquire it. Tony Hsieh, who works out of a cubicle, and earns, as CEO, less than $37,000 a year, never imagined he would one day run a shoe store.
Hsieh: I’m not a shoe person at all. I used to wear one pair of shoes for two years until there were holes in it and it was falling apart, and then buy another pair.
Voiceover: In fact, as the oldest of three boys growing up in California, Hsieh was supposed to be a doctor–or at least, that’s what his parents had in mind.
Hsieh: I think their mindset was, you know, the goal of childhood is to get into college, and then the goal of college is to eventually get into grad school so that you could put a Ph.D or M.D. at the end of your signature.
Voiceover: Hsieh was also expected to master music, and one instrument was not enough.
Hsieh: I ended up playing piano, violin, trumpet, French horn.
Voiceover: But even at that early age, he showed a flair for doing things his own way. To avoid practicing every day, Hsieh would lock himself in his bedroom and play recorded tapes of himself on the piano. His mother only learned about his deception when she recently read about it in his book.
Hsieh: My mom had an interesting reaction. She was like, oh, that part about you recording the piano, like, I know that didn’t really happen; you just wrote it to make it a better story.
Voiceover: After graduating from Harvard–naturally–Hsieh joined the dot com craze. In 1998, he sold an online venture, LinkExchange, to Microsoft, and walked away with over $30 million. He was just 24. And then, Hsieh decided to invest in a tiny internet startup.
Hsieh: I really missed being part of building something. So within a year, I ended up joining full time at Zappos, and I’ve been with Zappos ever since.
Voiceover: But selling shoes on the internet presented a particular challenge. People were used to trying on shoes before buying them. Purchasing online meant customers had to take a risk.
Hsieh: So the challenge is, how do you get customers to try out Zappos for the first time.
Voiceover: So Zappos began offering something very few other companies do–free shipping and free returns for up to a year. It worked. And while many customers cut costs by outsourcing their call center overseas, Zappos’ center is in Las Vegas, where the operators are all members of something called the Customer Loyalty Team.
Hsieh: We view our call center as a branding opportunity. Every phone call is a branding opportunity.
Voiceover: Every operator is given discretion to do what it takes to make a customer happy. So there are no planned scripts, no time limit to phone calls, as we discovered when we called last month.
Voice on Phone: Thank you for calling Zappos. This is Christy. How can I help you?
Reporter: Christy, I’m looking for a good summer shoe…
Voiceover: I went on and on and on for more than 20 minutes and never did buy a pair of shoes.
Christy: I do remember your phone call.
Voiceover: Twenty-seven-year-old Christy Martin was on the other end of the call and worried she had disappointed me.
Christy: Sometimes, it’s hard to direct people if they don’t know what they want.
Reporter: So you’ll let someone prattle on as long as they want?
Christy: Yes, pretty much.
Reporter: Another operator patiently worked with a customer trying to find a pair of boots she saw in a Lifetime television movie. But Zappos isn’t just about making customers happy. Hsieh is determined to make his 1,400 employees happy as well.
Hsieh: We want all our employees to really think of their work here not as a job or not as a career or something to build their career, but really as a calling to something, a place where they want to be at for life.
Reporter: Along with full medical insurance, there are free meals. Feel like singing? Want a pinball break? We found happy employees everywhere, even at the Kentucky warehouse, where many have what would seem to be physically exhausting and mind-numbing jobs, like shoe picker Mandy Rager, who came to Zappos three years ago.
Mandy: A friend of mine told me about it, and she suggested that I should check it out. And I was like you; I was skeptical, and I was like, yeah right, no place is that great, you know. That’s why they call it “work.” But then I got here, and I realized, you know, you work hard, but the reward you get’s greater than that.
Voiceover: The company is so determined to get dedicated workers that it will test their loyalty by offering them money to quit. Christy Martin, who started working right before Christmas, turned down $3,000.
Christy: Where else are you gonna find a job that’s as good as this, and especially in this economy, a job is gonna take care of you.
Voiceover: That sense of security, as well as company benefits, seem to matter more than the salaries, which are on par with Zappos’ competitors.
Stephanie Mehta: I think a lot of it boils down to empowerment. Employees at Zappos feel empowered.
Voiceover: Stephanie Mehta is executive editor at Fortune magazine, which for two years running has put Zappos.com on its list of best companies to work for.
Mehta: They feel respected. They feel as though they have the ability to make decisions on their own.
Voiceover: But to an outsider, all these really happy people in one place, all willing to shave their heads for the company…it can be a little off-putting.
Mehta: There is a risk with having so many optimistic, like-minded people all working on the same project.
Voiceover: And Stephanie Mehta wonders if happy employees are always a good thing for a company as it continues to grow.
Mehta: One does wonder if they are getting the full range of perspectives, including customer perspectives, if everybody is so cheerful.
Voiceover: But Tony Hsieh is not bothered by the criticism.
Reporter: When you have the little Z’s on people’s cheeks, you could understand why people would say, ooh, it feels a little cult-like.
Hsieh: You mean that’s not normal?
Voiceover: He’s hoping it’s only a matter of time before other companies follow his example.
Hsieh: You know, ultimately, we believe that it’s making the world a better place.