Wednesday, 24 November 2010

Making Money Happily is the world’s largest and arguably the most successful online shoes and clothes retailer. Tony Hsieh, the CEO of Zappos, sums up the goal of his company in two words: “delivering happiness” to both its customers and employees. He did a talk at the Make a Difference Forum in Hong Kong earlier this year on his company philosophy to an Generation Y audience. One of the participants said, “How come we do not have companies like in Hong Kong? If there is one, I will jump to work with them – even with less pay.” Here is what I think we can learn from Zappos.

First, Hsieh is adamant about the importance of having a meaningful company vision. To many people, vision is the airy fairy thing that adorns the annual report and has limited relevance to the daily businesses. To Zappos, having a meaningful vision is essential to inspire employess to give their best on an every day basis – in good and bad times. And the money will follow. The 20th century carrot and stick approach is no longer enough to boost productivity and to carry your company through hard times.

Second, Heish believes that Zappos’ culture is its number 1 competitive advantage. Competitors can eventually copy everything else that it does, but they can never copy its culture and values. Organisations have to stick by their core values in hiring and firing, performance reviews and in how the workforce is managed day in and day out. And most importantly, the top management has to lead by example.

Third, freedom is one of the essential conditions for happiness. The most prosperous nations of the world are those that advance the cause of freedom and where people are encouraged to explore their potential. Similarly, if you look at the most innovative and successful companies in the world, they thrive on empowering their employees.

Fourth, economist John Helliwell found that trust is the greatest contributor to workplace happiness, beating out pay, workload, or perks. Zappos has embraced an ethos of trust and transparency, using social networking tools such as Facebook, Twitter and blogging to share information, both good and bad, with employees, customers, and anyone else interested in the company.

It has become almost a fad lately to talk about the challenges of managing the Gen Y in the work place. Actually the ‘uniqueness’ of the Gen Y are more exaggerated than real. Young people demand meaning, freedom, trust and an open culture. But so do the rest of us – whether you are baby boomers or Generation X. The only difference is that Gen Y is more vocal whereas we the older folks tend to accept things as they are. Another commonly held belief is that the HR department is the custodian of staff morale. But without the vision and commitment of the top management and the board to build a culture of happiness, there is actually very little that the HR people can do.

Some people may argue that the Zappo way is only relevant to the Americans. I would argue that there is no reason why Asian organisations cannot - if we are prepared to invest in the happiness of ouremployees, sacrifice short term financial gains for long term sustainable growth.

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