A Path to Profits, Passion, and Purpose
by Tony Hsieh
What has become of the world today? Actually, according to Abundance, “the Future is Better than You Think”.
Most success stories start with a protagonist who is struggling, but the real story in Delivering Happiness actually starts with success. Tony Hsieh, CEO of Zappos and author of Delivering Happiness, delivers this almost as an autobiography, but for a very unusual purpose. He has learned a lesson in his life and he simply wants to share it through his own story.
The book outlines Tony’s life from his strict upbringing to his role at the helm of Zappos, a radically successful web shoe store. Tony’s story is one of unusual success. He is obviously a gifted individual who had an early desire to make a lot of money. Starting his first business selling buttons through a catalog, he made a few hundred dollars a month as a junior high student. By the time he was in his mid-20’s, he had sold his first company, LinkExchange, to Microsoft for $265MM. With millions of dollars in hand, Tony did everything he could think of to make himself feel fulfilled, but instead he found himself bored. One of his early ventures was to invest in a new internet company that was selling shoes online called Zappos. As the years went on, he poured his Passion into Zappos. The company struggled and he put everything he had into it. After making some remarkably difficult decisions, the company turned the corner and became profitable.
This allowed Tony to focus on developing Core Values and Purpose for Zappos, which only enhanced the work environment and the profitability of the firm. By 2009, Zappos was sold to Amazon for $1.2 billion. This time, with both Passion and Purpose clearly defined, Tony found more meaning in his life.
This is a story about Tony Hsieh and it is also a story about Zappos. However, this is really a story about a man’s journey from Profits to Passion to Purpose, and what he learned along the way.
KEY CONCEPT #3 - Have Fun
Culture happens. This is a lesson learned the hard way as Tony Hsieh started his first company, LinkExchange. While the company was radically successful (if you consider selling the company for $265MM to Microsoft after a couple of years “successful”), Tony discovered that he simply didn’t really enjoy coming to work.
Fast forward a few years later and Tony decided that he needed to help guide the culture at his new company, Zappos. Having studied multiple compensation models and techniques for motivating employees, he discovered that the best way to drive great results is to deliberately build a company culture that supported and aligned with the goal of the company.
Zappos lists its Core Values and makes sure that every employee knows them and applies them. The interview process comes in two phases: a technical phase and a culture phase, with the later focusing on whether the potential new hire fits the company culture. The company even publishes a Culture Book where employees can describe what it is like working at Zappos (unedited). This approach has created a fun work environment that consistently delivers great (freakishly great) customer service.
Culture is like the current in a river. Once it gets going, it is difficult to make it change direction. However, when the river current is utilized and focused through a generator, it becomes massively powerful and useful. The best advice is to think about the type of culture you want to have in your company and work hard to deliberately nurture that culture everywhere. Unfortunately, most companies don’t spend any time on their culture.
So how do you deliberately impact culture?
First of all you need to understand that culture is created because of how people think. Remember “Your Brain at Work” from a few months ago? Our minds are able to do amazingly complex tasks every day without a thought because our minds lump series of tasks and thoughts together into what psychologists call “schemas”. These “schemas” are a little like “plays” that our minds run almost automatically. When you are driving down the interstate and you see someone trying to merge into traffic, you turn on your blinker, check your mirrors, and change lanes to make room for the oncoming driver. Because you have done this before, you are able to perform this series of tasks without much conscience thought.
This trick that allows our brains to do increasingly complex tasks has a powerful impact on how people perform within companies. A greeter at a restaurant spends the first day at work around a bunch of coworkers who laugh and have a great time together while ignoring customers. In a very short time, the new employee learns that their role is to socialize and not to serve. The culture is set.
Fortunately, you can do something about it.
It starts most effectively with newer employees. Look for the traits that support the culture you want and carefully use the language that supports those activities in the interview process. When the employee starts work, watch carefully to make sure the employee is put into situations where your desired culture is well supported.
For more seasoned employees, it takes a little more effort. In our consulting efforts, we have found that the best strategy to shift a culture to something more positive and productive is through engagement. Engage your employees in a frank and open conversation about how they see the company and their role. Let them have some real input into how things are done and you will see them start to work to create the culture you have co-created.
Culture is powerful. It can get people doing the right things with minimal management oversight and it can get people doing the wrong things right in front of the bosses face. By working on culture, you can begin to rely more on your people to do the right things.
Don’t mix your business and personal life – Wrong! It is amazing to me how off base conventional wisdom can sometimes be. What could be better than hanging out with your best friends and doing what you love to do every day and then getting paid very well for it? Sound too good to be true; it’s not.
Today the best companies are finding ways to make this scenario and reality. We are not machines. We are human and humans need love, connection, and community to be truly healthy. Take a group of good friends who are rallying around a common cause or purpose and you have an environment for something extraordinary to take place. In today’s “flat world” information and technology are abundant and plentiful. Companies that excel will be companies that fully engage their “human resource” around a compelling cause or purpose.
On a personal note I love what I do because every day I get work with some of my best friends living out my calling and passion. Don, Emily, Gina, Caleb, Laura, and Jacque, I love you guys and count it a privilege to be a part of each other’s lives.
When Tony Hsieh was effectively “between successful businesses” an d was attempting to find something that excited him, he took up the game of Poker. This earned an entire chapter in the book, which delivered some powerful insights. Here are a few…
EVALUATING MARKET OPPORTUNITIES
Determining which table you will sit at is really where the game of Poker begins. You may select one table where you are surrounded by amazing Poker players or another where you are surrounded by reckless amateurs who don’t play logically. This applies well to business because every business (and every leader) must choose carefully which games they want to play… and when they just should walk away (or run… thank you Mr. Kenny Rogers).
MARKETING AND BRANDING
Act weak when you are strong and act strong when you are weak. Know what message you are trying to send out to the rest of the table and control that message. Same goes for your customers, coworkers, employees, and bosses.
The person who wins the most hands is not the one who makes the most money in the long run. It is also true that the person who never loses a hand also doesn’t win much long term. This is true in business (and in life). The path to great success often leads through failures.
Don’t play games you don’t understand, even if you see others being successful. This applies to everything you do. Either learn what you need to know or do something else. You’ll have to create your own path.
Those are just a few of the powerful lessons that Tony learned from Poker!
The goal is not to win all of the time and the goal is not to never lose. The real goal should be a long term perspective on what is important to you.
I often tell stories about my past life where I spent 10 years inside large corporations. One of the messages I heard over and over again was “you’ve got to learn to just play the game”. I learned the game. I understood its rules. I knew how to play the game well and how to win. Then I chose to simply not play.
This was a personal choice, so I don’t want to receive a bunch of letters from people who quit their jobs and now want to know what they are supposed to do next. For me, the game that was being played was not something that energized me. I realized that it was a safe game to play and that I could do it with some victories along the way, but in the end, I saw a bigger game.
The problem with the “bigger game”, which for me was jumping out on my own to start my own business, was that it was a game with high stakes. I had to give up my comfortable health plan and even my job security. I was making really good money and we lived very comfortably… and I put it all at risk simply to play a different game that better fit me.
The ending of the story hasn’t been written yet for me, but I can say that I have gotten so much more out of the adventure of my new game versus the old, that it has been more than worth the sacrifices I have made along the way. You must write your own story and I hope that it has some twists and turns along the way. Those kinds of rides are always more interesting anyway.
The chapter in the book on playing poker is some of the best condensed business advice I have ever read. Buy the book and read that chapter. Refer back to it frequently. Below are few key take aways.
Nothing in this life is a sure thing. So if you are waiting for a sure thing you will have a long, long wait. Now that doesn’t mean you should take wild and crazy risks either. Good business decisions are based on calculated risks. You do your home work and put together a game plan that is likely to work and then you go and execute that plan.
Hsieh talks about switching poker tables. The whole control issue is an interesting one. We often try to control the things we can’t control and ignore many of the things we can control. Work on controlling the things you can actually control. Deciding which poker table you sit at in the casino or how you are going to play the game of business is in your privy. Winning and losing at business is found, more often than not, in the nuances.
The biggest overall winners don’t win every time. It takes a lot of time and energy to win every time. One of the most successful businesses I was ever involved with was a contract cleaning company that knew how to play odds. They did contract cleaning for several large regional chains. We used a simple cost averaging approach to our pricing. Every store paid the same price per square foot. In many of the smaller stores, especially if we had to travel, we actually lost money but we way more than made it up on the larger stores.
Tony Hsieh achieved a high level of business success at an extremely early age. A few short years after college, he sold his internet company to Microsoft for hundreds of millions of dollars. He had "made it" and he was only in his mid 20's. He couldn't help but notice that something was missing.
He began his search for the "something" by spending his money. He flew to Vegas regularly to play Poker. He purchased a huge loft and had his friends move into the building to relive his college dorm days. He even took his friends on a cruise. All of these things failed to bring Tony the feeling of real success.
It wasn't until a few years with Zappos and some even bigger business success that he discovered the answer. It was more than profits. It was even more than passion. It was purpose.
He discovered that his sense of fulfillment didn't come from a full bank account or even from hanging out with great friends. It came when he worked toward something that was bigger than himself. Zappos became just the first of many things in Tony's life that brought purpose, not because of the company itself, but because of the Values it represents.
When I was in college, there was a group of guys that I would walk to class with in the morning after breakfast from my fraternity. I went to school at the University of Nebraska, so you can imagine the weather we had between August and May (you name it… we had it…). Sometimes we would walk to class and it would be raining. The sidewalks were in disrepair and large puddles would form. Students walking to class would almost bump into each other trying to avoid the puddles or would jump over them, heavy backpacks and all.
The first time I walked to class in the rain, I watched the students moving about looking generally miserable. Most didn’t bother to carry umbrellas and neither did I. I had a moment of clarity that I still remember to this day. I wore hiking boots regularly to class. They were water resistant and I was soaking wet anyway. So… I stepped in the next puddle.
My friends walking next to me were surprised. As they dodged around the puddles, I hit every puddle in my path. I splashed and my feet got soaked. By the time we reached class, I was the happiest person there. All of these rain soaked students sitting in class, and all I could think about was the simplest of pleasures that most of the students had worked hard to avoid that day. After that day, my friends would refer to me as “ATD” when it rained (stood for “All Terrain Don”).
Fast forward 15 years later to one of the worst days of my life. I was sitting in a doctor’s office with my parents. My Dad had been diagnosed with Lou Gehrig’s disease a few weeks before, and we were meeting with the doctor who would be “treating” him. We had just learned, in detail, how my Father was going to die.
After the doctor left, we were all silent. My Dad sat with tears streaming down his face. It was going to be a rough couple of years. He apologized to us again for showing so much emotion (my Dad didn’t often show that type of emotion). The doctor had just explained that the disease, which weakens every muscle in the body, also has the effect of making those affected by the disease unable to control powerful emotions like crying or laughing. He shrugged, choking back tears and told us that we would have to put up with his whining from now on.
It was silent for a moment. Then I broke the silence.
“Well… maybe we can get you a job at a comedy club. If you can’t stop from laughing, they might pay you something just to sit in the audience.”
My Dad immediately broke out into laughing, almost uncontrollably. I then started pretending that I was the bad comedian. “Take my wife! Please!”. He laughed even harder causing more tears to come down his face. He laughed so hard that the nurse, who had just entered the room, was alarmed by his bluish color.
My Dad passed away a couple of years later. We had a lot of horrible moments during those years as he deteriorated, but we also shared a lot of laughter. Looking back the laughter is what I remember most.
There is not a moment or time in your life where happiness, or even a little fulfillment, cannot be extracted. Whether it is at work, at home, or during good times or bad, life is too short not to laugh a little.
Happiness is our compass to tell us if we are going in the right direction. If you are not happy, something is wrong. Trust your internal compass. Happiness is a sign of wholeness and health. If you are not happy you are not healthy. Something is out of alignment. There is not a universal; one size fits all formula for happiness. It is unique for each person.
So if you are happy good for you! If you are not happy it is your job to make yourself happy. Take control of your situation and create a world that makes you happy. You are in charge of your own happiness. Happy people are productive people. They not only produce enough for themselves but they also usually have plenty extra to share with others.
Not only are happy people productive, they are usually fun to be around. Wow that sounds like someone I would like to know. How about you? Happiness is indeed a good thing.
How to be Insanely Great in Front of Any Audience
by Carmine Gallo
Most of the dynamics for creating great friendships already exist in your current work place. All it will take is a little intentionality on your part to make it even better.
- Step 1
Rate the relationship with each of your co-workers on a scale of 1-10 with 1 being nonexistent and 10 being great friends.
- Step 2
Continue to interact with your 8’s and higher. With anyone scoring less than 8, get intentional about building a bridge to a better friendship with each of your co-workers. Go to lunch, do something after work, or find a common interest.
- Step 3
Continue working on building friendships with each of your co-workers. Great friends usually make the best co-workers and create an environment where each person on the team can make the greatest contribution.
- Step 1
Answer the following questions:
1. Is there another job in your organization that would better utilize your strengths?
2. Is there someone else in your organization that you need on your team? Can you trade players?
3. Would it be better for you to be on someone else's team than you are on right now?
4. Are you in the wrong department or division?
- Step 2
If you answered yes to any of the questions above, go to work on rectifying the situation.
Most organizations are not opposed to having more fun, they just don’t have a system for making it happen. In this action item, you will deliberately focus on creating more fun by establishing your own “fun committee.”
- Step 1
Approach your leadership team about putting together a company fun committee. Feel free to talk about the culture at Zappos and the impact fun is having on many of today’s most successful businesses. Also don’t be afraid to ask for a reasonable budget but remember you don’t need a lot of money to have a good time.
- Step 2
Once you have permission to proceed, assemble a team of fun loving co-workers and plan out your year. It is easy to have a monthly, or weekly if you are so inclined, get together after work and then have some larger events throughout the year. There are many great opportunities to bring people together - holiday parties, canoe trips, and pool parties. Don’t hesitate to get outside of the box. You can do your own talent show, have a game night, or even go ski diving. Use your imagination and do something special. And much of this can be done at little or no cost for your business. People spend their own money on these kinds of activities all the time. You are just creating the opportunity for them to do it together.
- Step 3