Making Money Happily

Zappos.com 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 Zappos.com 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.

Defining Design

Design means different things to different people. Here are what I think are essential to understanding what design is.

Design is not art or pretty stuff.  Design is a multi-disciplinary process integrating art and culture, user and market needs, business considerations and technological considerations.

It follows that design is not for people who like to draw. We need to switch from the concept of a designer to a design team with professionals from various disciplines working together, from psychologists, sociologists, anthropologists to business strategists, marketers,  engineers, IT specialists and so on. In the renowned Mayo Clinic in the States, both doctors and nurses work in a design team to design better experience for patients and more effective operation processes for the Clinic.

Design should in no way be associated with luxury, but should be part of our every day life, whether you have deep pockets or not.  Ikea is a good example that design and good design can be affordable to most people. In Europe and the US, many governments are using design principles and processes to improve the delivery of health care, education and social services for the underprivileged.

So design is applicable to both tangible 'stuff' and intangible services and experience. If Hong Kong has nothing but services industries, our schools should teach 'service design' in a big way. And it is not just the design school. Service design should be integrated into each and every discipline. Our design incubators like the InnoCentre and the future Hollywood Road Creative Cluster should open its doors not just to product, graphic, interior, fashion and jewellery designers, but design teams that design business strategy, process, service and experience.

Finally, design helps us understand the difference between creativity and innovation, which are often treated as synonyms but are actually two vastly different concepts. Design is the process that translates creative ideas into useful and profitable applications (i.e. innovation). Here is my analogy: creativty is flour, innovation is bread and design is the bakery process.

I would like to end with two more clarifications: Innovation is not an industry - it should permeate in every industry; and innovation is not just about technology. Innovation has to fulfil unmet needs in the marketplace. This is why countries like Denmark are investing heavily in developing and promoting user-centric innovation.

Communication channels with your customers

I was annoyed by a sales call today ...

A saleswoman called me up when I was having lunch today, trying to cross sell some magazine titles to me. I asked her to email or fax the information to me instead, but unfortunately she declined. Apparently she is only responsible for making sales calls.

Everyone has his/her own preferred means of communication. One of the 'tricks' in managing the boss is to know whether he/she prefers verbal or written communication. The same principle should apply to managing your customers. Do you know or have you asked your customers whether they want to receive sales calls, emails, SMS or the conventional flyers? Does your organisation have the flexibility to enable your staff to communicate to different customers differently?

I am pretty sure that if I had received an email today from the salesperson, I would have a 50% chance of ordering some new magazine titles.  Tough luck for the woman on the line.

Find a way into the heart of customers

There is good piece in the FT today on the importance of designing emotions in the operation process. How can organisations handle customers who are upset, alarmed or disgruntled?

Referring to a paper recently published in the MIT Sloan Management Review, the piece points out that operations people should not see themselves as purely rational or financial beings. "They don't realise that emotions are very process driven." The paper argues that companies have to identify the emotions that they most frequently deal with and train their staff to deal with these highs and lows. In particular, it is important to design 'trust' and 'control' in the customer management process.

Another piece in the FT today picks on a similar theme. It posits that IT professionals nowadays should not just be concerned about efficiency gains, but should enable the organisation to be more effective. For example, the HR director can use IT systems not just for benefits and payroll, but for talent management and recruitment.

So running a successful company requires empathy from staff at all levels. TLC is no longer the airy fairy stuff but a core component of any well run organisations and any successful brand.