Jun 11, 2010

Hating HR? Lessons from Tony Hsieh of @zappos

Remember there was this article some years back in the Fast Company called "why we Hate HR?"

There's now a follow up post at the HBR Blogs title Why We (shouldn't) Hate HR.

And I have often blogged about it - if business leaders were as demanding of HR as they are of Marketing and Finance, then they'd ask their HR people to do a lot more.

I was again reminded of this when over the last few days I read the book "Delivering Happiness" by online retailer @zappos CEO Tony Hsieh. The book is a mix of a personal story and is also tied in with how his experiences led him to build the culture at Zappos.

When I was reading the book, I was reminded of a book I read more than a decade ago - Maverick by Ricardo Semlar.

Tony is as much of a maverick as Ricardo, taking decisions that puts the culture of the organization, openness and transparency at the centre of the structure, and then challenging the norms of the industry.

Tony's belief is that the culture of the organization is the biggest brand it has, and that value drives the way Zappos treats its people and lets them take decisions. The culture is tied to the core competence of the organization which is Customer Service. Zappos knows that both the core value and core competence need to be invested in, and while it has twice faced tough economic times it didn't compromise on them. Long term needs to be balanced with short term. It is not an either-or option, unlike what most senior executives believe

But most importantly Tony's belief is that an organization's larger goal is not profits, or even passion but a purpose - and for Zappos that purpose is to Deliver Happiness - to its customers, partners and the world at large. I personally think that Zappos is the archetype of the Organization 2.0 I keep blogging about.

The HR processes support such thinking within Zappos. For example they have a culture book, which is a collection of how each of their employees experience the culture at Zappos - and now anybody can read that book.

During interviews HR people can reject a perfectly technically suitable candidate if they don't meet the "culture fit" of the organization.

After a person is recruited, they are taken through a few weeks of training - where every employee has to experience the core competence of the organization - customer service - by manning the contact centre phones. Doesn't matter if your job is in Finance or Legal or HR. You have to man the phones for some time.

After training - each employee is offered $ 2000 to quit, if they want to. That's a lot of money, and Zappos believes that people who are not touched by the purpose of the organization will take that option and leave. About 1% do.

If you are aspiring to build the 21st century's next enduring business, you should read Tony's book.

Here's a slideshow put together by Tony which captures the salient points of the book. Check it out