21st Century Management the Zappos Way

I’m feeling a bit out-of-date and stuffy today.  Last week, Plus Delta’s CEO Jeremy Lurey and I toured Zappos’ Headquarters in Henderson, Nevada just outside Las Vegas.  If I hadn’t been there to see it first hand, I would have a hard time integrating what I’ve read into just how unbelievably youthful, crazy weird yet motivating the environment is.  Click here to see it for yourself. At the end of the tour, Jeremy and I took the traditional picture next to a throne to prove that they treat their customers like royalty.  You get to choose what hat to wear.  Well, at Zappos, teams rule, and the power lies in the involvement and creativity of their people.  When it was our turn, simultaneously Jeremy and I picked hats that were complete role reversal of boss and staff.  We got it!


Don’t get me wrong, Jeremy is a great boss!  And he is much appreciated as a mover and shaker in our field of OD and Change.  But Plus Delta doesn’t live and breathe “21st Century Management” (see Denning’s new book, The Leader’s Guide to Radical Management: Reinventing The Workplace For The 21st Century) like Zappos, which models the changing workforce of tomorrow.  Statistics show that companies who are value-centric and focused on creating a great culture, are highly innovative and grow at 4x the rate of companies with low employee engagement.  While we were on the tour, we couldn’t help but notice how Zappos has intentionally created something special (which they call “The Happiness Factor”) that nearly matches all of Denning’s 7 foundational principles. The following are just a few examples:

  1. Delighting Clients: Traditional management is focused on managing things (like products, services), not people (like customers, employees) – Zappos’ first core value is to deliver “WOW” through service.  From our own experience of being treated like royalty, we must have said “Wow” a million times during the day!
  2. Self-organizing Teams: Leadership is about nurturing teams, not about top-down micro-management – Zappos gives a great deal of freedom to pursue team decisions and for people to self-organize in groups around areas of personal “passion” outside of regular duties.
  3. Client-driven Iterations: Meeting real needs is applying learning as it occurs – Zappos has empowered employees to make meaningful changes and decisions at all levels without a lot of supervision.
  4. Delivering Value to Clients in Each Iteration: A “handbook” for natural capitalism – Zappos’ creed is delivering happiness and therefore building customer loyalty at every step of the way.
  5. Radical Transparency: Balance truth and power/authority – At Zappos, open and honest relationships are built with communication at all levels, at all times.
  6. Continuous Self-Improvement: There is always something to learn, do better – Zappos strives to encourage learning across functions and across the company by sending employees to visit their different facilities and inviting other companies to tour their facility to learn together.
  7. Interactive Communication: Stories, questions, conversations – Zappos has its own web TV channel for employees and every year creates a yearbook with employee input and photos.

Seeing all this in action was thrilling.  As we walked up and down the hallways of mind-boggling, decorated cubicles, happy workers literally waved and cheered us on.  It was uplifting to see the CEO Tony Hsieh’s office under a ceiling jungle on what they call “Monkey Row” – open, without walls, and right in the middle of his customer service team members.  It was also fun to be offered a shot of Tequila at the end of our tour in the middle of the day.   If you stop and ask a Zappos’ employee, any one of these examples and more can immediately be related to any one of the 10 core values with clear and focused articulation.


Jeremy and I both left with the utmost respect and admiration, totally inspired to update Plus Delta’s practice and revitalize our core values.  What we recognized is that you can teach change, make it happen for clients, and see the future coming that you know is different, but that doesn’t erase the fact that we are human with our own internal resistance and reactions.  Having been ingrained in a traditional management model for 30 years myself, my mind and emotions wanted to snap back into place like a rubber band that had been stretched to its limit.  I was left wondering, “How can they be this radical?”  (Maybe that’s why we noticed very few workers over the age of 40 on the tour.)  When Jeremy asked Jamie Naughton, Speaker of the House and a senior leader at Zappos, if anyone had measured the “ROI” (return on investment) for their customer service and employee engagement practices, Jamie quickly answered, “No.  We just ask, ‘What’s the return on being irrelevant?’”  A humbling perspective indeed.

Zappos has been so inundated with visitors and other companies that their Insight Department has expanded to include paid extended tours and 2-day cultural immersion boot camps at $4,000.00 per person!  According to this month’s list of Forbes’s 100 Most Innovative Companies, Zappos isn’t on the list.  Its parent company is #2.  However, we beg to differ.  At Zappos, we experienced how consistent and constant innovation is across all levels and layers of the organization as opposed to other companies which may excel in only certain divisions or groups.

In 2013, Zappos will complete a radical and surprising move of their operations from Henderson 20 miles away to a downtown Las Vegas neighborhood called East Fremont.  In Part 2 of this blog series, I will share more from our private tour of that area and elaborate on how Zappos is focusing on culture not location to engage teams of employees known as “Passion Groups” with business owners, schools, and community leaders to focus on sustainable ways to make this upcoming move a remarkable community development success.  In the meantime, Jeremy and I will do what we have always done in our careers, and what makes Plus Delta so nimble and great in its own right – rise to the challenge to embrace the radical management of the future by stretching our rubber bands one step at a time, until they don’t spring back anymore.

Posted in Corporate Culture, customer service, employee engagement, Empowerment, Fun, Innovation, Jamie Naughton, Las Vegas, Passion Groups, Tony Hsieh, values, Zappos

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