Fluent Essays

This is a business case writing. Company choose: Zappos. The detailed writing instruction and grading rubric is post in the attached file. Make sure use the Stanford case (in attached file)Word count at least 600Need to check the grading rubric and make sure meet all requirement~!~!!Here are some helpful resources:https://www.youtube.com/watch?v=WiIeImBFRK4Zappos Company Culturehttps://www.youtube.com/watch?v=-DYigfNJQlgHowZappos will run without Job Titleshttps://www.youtube.com/watch?v=VRf64t3i16AInside Zapppos holocracyhttps://www.youtube.com/watch?v=kfLOz5WzOlwWhy I sold Zappos to Amazon (3 yrs ago)https://www.youtube.com/watch?v=D9h03mk6SDIWhy I sodd Zappos to Amazon (2010)https://www.youtube.com/watch?v=WV28Jb5caq4 Zappos bets on downtown Las Vegashttp://www.youtube.com/watch?v=cLzjx_E-SXEZappos tour customer servicehttp://www.youtube.com/watch?v=oYNssS_DCPo Zappos on CBShttps://www.youtube.com/watch?v=dAyCO-2caDI Zappos culture or why you should work at Zapposhttps://www.youtube.com/watch?v=1peSz6zR9F4 Why company culture matters at Zapposhttps://www.youtube.com/watch?v=K-Bk_hjVrcI Why Did Amazon Buy Zappos for $940 Million? History line. delivering_happiness_in_a_box__1_.pdf grading_rubric.pdf ppt.pdf writing_requirement.pdf Unformatted Attachment Preview CASE: M-333 DATE: 09/20/2010 ZAPPOS: HAPPINESS IN A BOX Ive learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel. ―Maya Angelou, American author Zappos is about delivering happiness to the world. ―Tony Hsieh, Chief Executive Officer, Zappos i THE BEGINNING ii Nick Swinmurn, a Bay Area entrepreneur, founded Zappos in 1999 after unsuccessfully trying to find a specific pair of shoes in several stores. He believed the internet could address the selection problems traditional shoe sellers faced by removing the physical constraints of shoes stores. He launched Zappos (whose name was an adaptation of the Spanish word for shoes, “zapatos”), despite having no experience in retail or the shoe industry, to provide access to a wide variety of shoe styles, colors and sizes. Meanwhile, just three years after graduating from Harvard, Tony Hsieh (pronounced “Shay”) and Alfred Lin sold their internet ad-banner business, LinkExchange, to Microsoft for $265 million. In 1999, Hsieh and Lin founded a venture capital fund called Venture Frogs. Hsieh originally served as an investor and advisor to Zappos and then joined the company in 2000, serving as the co-CEO with Swinmurn. (Lin later joined as COO/CFO.) Swinmurn was intent on building the next internet retailing powerhouse and satisfying customers’ needs faster and more simply than ever before. Hsieh, on the other hand, was not focused solely on profits. He wanted to create a new universe, a company that was different from any other company he had known. His focus was on culture and employee happiness. Recalling his outlook on the new position, Hsieh explained, “It was about: What kind of company can we create where we all want to be there, including me? How can we create such a great environment, where employees get so much out of it that they would do it for free?” iii What Hsieh did not know at the time was that he Sara Gaviser Leslie and Professor Jennifer Aaker prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 2010 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate School of Business. Every effort has been made to respect copyright and to contact copyright holders as appropriate. If you are a copyright holder and have concerns about any material appearing in this case study, please contact the Case Writing Office at cwo@gsb.stanford.edu. Zappos: Delivering Happiness M-333 p. 2 would move beyond a focus on creating enjoyment and fulfillment for employees towards delivering happiness to both customers and the greater public. FINDING THE VISION Zappos survived the burst of the internet bubble and its own struggles to create a reliable supply chain and distribution system, but, in 2000, was on the edge of running out of cash. Hsieh knew the company was doing something right and went to enormous lengths—propping up the company with personal funds and even selling real estate—to ensure its survival. The dire circumstances forced the team to focus even more on customer service to enable the company to continue. iv Even as a retailing newcomer, Zappos was already collecting customer accolades. In 2003 Hsieh commented to Fred Mossler, then director of product development, about a customer who had been shocked by the level of service Zappos provided. The customer had ordered a pair of shoes and Zappos surprised him by upgrading his shipping from one week to two days: “He loved the customer service and would tell his friends and family about us. He even said we should one day start a Zappos Airlines.” Recently, Hsieh had finished reading Jim Collins’ Good to Great and latched on to Collins’ idea that great companies focus on more than just making money or becoming market leaders. With these two events top of mind, Hsieh and Mossler realized they needed to focus on both short-term goals—making money—and becoming a great company. Hsieh recalled, “We realized that the biggest vision would be to build the Zappos brand to be about the very best customer service.” v CREATING THE CULTURE The start-up culture, where everyone pitched in and felt integral to the success of the company, invigorated Hsieh and his colleagues: Even though we were going through some tough times, we were going through everything together, and we were all fiercely passionate about what we were doing. We had made sacrifices in our own way because we all believed in the potential and future of the company.” vi The need for employees to work as a unit only strengthened when the company moved from the San Francisco Bay Area to Las Vegas in 2004. Most employees were new to the area—their lives at work and outside of work merged. Hsieh and his colleagues enjoyed feeling “part of a tribe,” and Zappos encouraged this activity. The culture and Zappos’ performance were so intimately related that Hsieh believed, “If we got the culture right, then building our brand to be about the very best in customer service would happen naturally on its own.” vii Knowing it would be hard to maintain the start-up feel and culture, in August 2004, Zappos asked all of its employees to provide their thoughts on what the Zappos culture meant to them. It compiled this feedback into a culture book that it shared both internally and externally. (From that point on, the book was published annually with new employee comments.) Zappos wanted employees to understand that they were building the culture and ensure that employees had a shared experience in working at the company. Serious about creating an environment where Zappos: Delivering Happiness M-333 p. 3 personal well-being and happiness were emphasized, Zappos hired an in-house life coach, Dr. Vik, in July 2005. Later that year, the company again approached its employees to help it define its core values. They pared down this list and released it to the world in February 2006: 1. Deliver WOW Through Service 2. Embrace and Drive Change 3. Create Fun and a Little Weirdness 4. Be Adventurous, Creative and Open-minded 5. Pursue Growth and Learning 6. Build Open and Honest Relationships with Communication 7. Build a Positive Team and Family Spirit 8. Do More with Less 9. Be Passionate and Determined 10. Be Humble Many companies developed core values and some even publicized them. No company, however, had values like those of Zappos. From cubicles decorated by theme, such as the “Monkey Row” (housing the company’s executive team); to open public tours of the company’s headquarters, complete with hoots and bells from every department the group passed; to fully-paid health and dental insurance, Zappos was unique. It almost looked as though employees were having too much fun to be productive. Visitors to the company’s headquarters were not only invited to help themselves to anything at the company’s free lunch room but also allowed to walk around unescorted—thus demonstrating that “build open and honest relationships with communication” was a value that extended to the company’s interactions with the public. They thought about how they could make their core values into the platform on which they would build a company, and the culture became the platform. Making employees happy and making customers happy and making our partners happy became their mantra Hiring for Cultural Fit To maintain its unique culture, Zappos hired for specific qualities—weirdness, humor, humility, and even luck. The job interview included a technical assessment and personality/fit questions as well as funny quizzes or even crossword puzzles that focused on Zappos’ business. Lin added that happiness was another quality that they screened for interviews: I attended a conference where someone in the audience asked Starbucks’ chairman/CEO Howard Schultz why everyone at Starbucks smiled and he said, ‘We only hire people that smile.’ We try to do the same thing at Zappos. We only hire happy people and we try to keep them happy. Our philosophy is that you can’t have happy customers without having happy employees and you can’t have happy employees without having a company where people are inspired by the culture. viii Zappos was interested in how potential employees saw themselves. One of the interview questions was, “On a scale of one to ten, how lucky are you?” According to a study Hsieh had Zappos: Delivering Happiness M-333 p. 4 read, people who reported themselves as being lucky were more likely to pick up on clues to help solve a task they were given, even outperforming a group of people who perceived themselves as unlucky. Zappos’ goal was to “hire the lucky people that bring more good luck to Zappos.” ix Cultural fit was so important, Hsieh explained, that it superseded talent: “We have passed on a lot of smart and talented people that we know can make an immediate impact on our top or bottom line, but if they are not a culture fit we wont hire them.” x Training to Spur Personal Emotional Connections Every employee started with Customer Loyalty Team (CLT) training, regardless of the employee’s future role. New hires learned about the kinds of things CLT members did to “WOW” or surprise customers with fantastic service. The new hires even spent two weeks taking phone calls from customers. Once new hire training ended, Zappos employees had the opportunity to continue to learn. The company offered courses on communication, finance, and time management as well as unique offerings, including “The Z Library: Tribal” (based on the book Tribal Leadership), “The Science of Happiness” and “Delivering Happiness: The Book.” In 2007, Hsieh became interested in the science of happiness and started reading books and articles about happiness, including The Happiness Hypothesis by Jonathan Haidt and Happier by Tal Ben-Shahar, and offering courses on the topic. The Science of Happiness was one of the most popular classes in the elective training program. xi HAPPY EMPLOYEES GIVE GREAT SERVICE Zappos’ customer service included some straightforward but unusual standard practices—a 365day return policy, free shipping both ways, 24-hour customer service, a toll-free phone number for service inquiries prominently displayed at the top of every page, and assistance in reaching competitors if Zappos could not satisfy a customer request. Most call centers were sterile and could experience turnover as high as 300 percent annually—their main goal was to keep service costs down. Zappos, however, did not see its call center as an expense; rather, as Hsieh explained, “We believe that it’s [telephone customer service] a huge untapped opportunity for most companies, not only because it can result in word-of-mouth marketing, but because of its potential to increase the lifetime value of the customer.” xii The team member’s job was to WOW customers. They answered the phone cheerfully but without a script, a standard tool for most phone reps. They were not compensated on how many calls they handled during their shifts but were told to spend as much time with customers as it took to resolve their issues. Zappos even kept a record of the longest customer call—the last was on July 10, 2010 when a CLT member spoke for 7 hours and 28 minutes. These conversations helped build the brand, as Hsieh explained: “We want our reps to let their true personalities shine during each phone call so that they can develop a personal emotional connection (internally referred to as PEC) with the customer.” xiii Zappos: Delivering Happiness M-333 p. 5 Implementing the Happiness Framework at Zappos As the company grew, and the happiness culture become even more prominent, Hsieh realized that Zappos was going to be about more than just shoes or clothes—its goal was about happiness and spreading happiness far and wide. “We’ve always had customers tell us that they think of the experience of opening up a Zappos shipment as ‘Happiness in a Box.’ Whether it’s the happiness that customers feel when they receive the perfect pair of shoes or the perfect outfit, or the happiness that they feel from our surprise upgrades to overnight shipping or when they talk to someone on our Customer Loyalty Team, or the happiness that employees feel from being part of a culture whose values match their own personal values—the thing that ties these all together is happiness.” Accordingly, in 2009, the company’s brand promise evolved once again, this time from “personal emotional connection” to “delivering happiness.” xiv Hsieh, in the process of learning about happiness, discovered several “happiness frameworks” that could help individuals and organizations understand how best to reach happiness. The framework he found most useful for Zappos was the following: Source: Compiled by author based on information from Delivering Happiness. Perceived control was the first part of Zappos’ happiness framework. In place of annual raises in its call center, which reps appreciated but did not control, Zappos implemented a “skill sets” system for CLTs. The company had 20 different skill sets that employees could acquire, and mastering each one came with a small pay increase. As Hsieh explained, “If someone chooses not to get any, then he or she simply stays at the same pay level. If someone is ambitious and wants to gain all 20 skills, then we let the rep decide on the right pace to achieve that…. Our call center reps are much happier being in control of their pay and which skill sets to attain.” xv The importance of perceived progress in driving happiness caused Zappos to change its merchandising promotion process from every 18 months to smaller promotions every six months. Though the end results did not change—employees reached the training, certification Zappos: Delivering Happiness M-333 p. 6 and compensation milestones on the same schedule—employees were, Hsieh said, “much happier because there is an ongoing sense of perceived progress.” xvi To create a feeling of connectedness, Hsieh encouraged employees to socialize outside of work. Managers were required to spend 10-20 percent of their time hanging out with their team members. Hsieh conceded, “It’s just kind of a random number we made up. But part of the way you build company culture is hanging out outside of the office.” xvii While Hsieh was leading the happiness movement at Zappos, he did not see himself as the center of that movement. Instead, he explained, “For any company or movement or religion or whatever, if there’s one person that personifies it, then that puts that company or vision at risk…. That’s why it needs to be about a movement, not about a person or even a specific company.” xviii Zappos would drive the happiness movement and each employee would play an important role in advancing it. Zappos’ unique approach to running a business and engaging employees and customers attracted the attention of some of the world’s leading retailers. Amazon, like Zappos, was adamant that it must “obsess over customers” and reinvent itself continuously. xix In July 2009, Amazon announced it was acquiring Zappos in a deal that closed at $1.2 billion. xx True to the Zappos values of embracing change and building honest and open relationships, Hsieh sent a detailed email to all employees (and made it available to the press) the day the deal was announced. (See Exhibit 1 for a copy of Hsieh’s letter to employees announcing the deal. See Exhibit 2 for Hsieh’s 2010 letter reflecting on the deal.) Repeat Customers Drive Zappos’ Success Connecting with customers and driving customer happiness were part of Zappos’ recipe from the very beginning, as Lin explained: We started out with the idea that while we want to sell shoes, and thats how we make money, if we can make one customer happy, they will tell 10 of their friends. That’s how we basically built Zappos, not by spending a ton of money on marketing, but WOWing our customers and WOWing employees, so that they tell their friends to come shop at Zappos or work at Zappos or do business with Zappos. “WOWing” customers was the way to ensure customers would buy from Zappos again and again. Seventy-five percent of Zappos sales on any given day are from repeat customers. If you wanted to model out the true power of repeat customer visits and the power that translates into business performance, this is an under-told story. Further, repeat customers ordered 2.5 times the amount that new customers ordered in the 12 months following a purchase, and had higher average orders. For instance, first-time customers spent $123.86 in Q407 and returning customers spent $156.27 during that same period. xxi Zappos: Delivering Happiness M-333 p. 7 Power of repeat customers and word of mouth... $1,000 Gross Sales $Ms $800 $600 $400 $200 $0 Gross Sales 2000 2001 2002 2003 2004 2005 2006 2007 2008 1.6 8.6 32 70 184 370 597 841 1014 Slide 7 Source: Zappos Sharing Stories of Great Service and Happiness Sharing the feedback from customers as well as stories that CLT members collected helped reinforce the core values for newer team members—Zappos was serious about going to great lengths to serve customers. That kind of sharing also acknowledged, as Lin explained, that the company made mistakes: “Well screw up more often than we would like to admit, and well apologize, and well fix it. Customers that have said, ‘I’m going to be a customer for life’ are the ones [for whom] something wasnt exactly right, whether it was the shoe didnt fit, or it broke, or we sent them the wrong one three times, and we made it up to them.” As one team member wrote: One of our international customers was in the U.S. for a business trip and placed an order to be delivered while he was in the States. Unfortunately, his order was not delivered on the expected date. He was, understandably, upset and he really wanted his shoes. He decided to stay an extra day and wait for his package to arrive. He ended up missing his flight out and had to pay a fee to reschedule with the airline. Because his order wasnt delivered as promised, we paid for the difference in his airfare, the shoes that he ordered, and issued a very generous coupon towards a future purchase! xxii Zappos had numerous stories to share about the astounding things employees would do to make customers happy. (See Appendix for customer stories.) USING TECHNOLOGY TO SHARE THE CULTURE AND AMPLIFY THE CUSTOMER EXPERIENCE Zappos fielded 5,000 to 6,000 calls a day. Hsieh explained, “Our best branding tool, as unsexy and low-tech as it may sound, is actually the telephone. And if we get that interaction right, it’s something they remember, maybe for the rest of their life, and tell their friends and family Zappos: Delivering Happiness M-333 p. 8 about.” xxiii Nevertheless, Zappos also explored additional ways to connect with customers and non-customers. Leveraging Twitter to Strengthen Company Culture Hsieh originally joined Twitter to keep track of his friends at an offsite meeting. He also used Twitter as his personal search engine with tweets such as, “I’m in NYC. What’s a good bar to hang out ... Purchase answer to see full attachment