Question: How do you create culture?
Creating culture isn’t something that can really be dictated top down.
It’s really more about having it come from the employees. And that’s
literally what we did to figure out our core values. I emailed all of
our employees—this was about five years or so into it—and asked them
"What should our core values be?" And got back a whole bunch of
different responses. And it actually is a pretty hard thing to do. It’s
been about a year going back and forth, and we eventually came up with
our final list of 10 core values at Zappos.
And you know, a lot
of companies have things, they may call them "core values" or "guiding
principles," but the thing we wanted to come up with was a list of
committable core values. And by committable, meaning that we were
willing to hire, or fire people based on whether they were living up to
those core values independent of their actual specific job performance.
so we’ve actually passed on a lot of really smart, talented people that
we know could make an immediate impact on the top or bottom line, but
if they’re not a culture fit, if they don’t live up to our core values,
then we won’t hire them. And ultimately what we try to do is actually
take care of it on the front end. When we hire people, we do two sets of
interviews. The hiring manager and his or her team will interview for
the standard fit within the team: relevant experience, technical
ability, and so on. But then our HR Department does a separate set of
interviews purely for culture fit. And they have to pass both in order
to be hired.
So for example, one of our core values is, "be
humble." And there are a lot of really smart, talented people out there
that are also really egotistical. And it’s not even a question, we just
won’t hire them. Whereas, probably the conversation at most companies
would be, "Well this person might be kind of annoying and rub you the
wrong way a lot of times, but he can add a lot of value to the company,
therefore we should hire him." And I think, that one hire won’t
necessarily bring the company culture downhill, but if you keep making
compromises like that over and over and over again, I think that’s why
most large companies don’t have great cultures.
How can you tell that potential employee won’t fit the company's
Tony Hsieh: So, our recruiting team over
time has gotten actually pretty go at figuring out whether somebody is
going to be a culture fit or not. And we actually have interview
questions for each and every one of the core values. And it's not
necessarily what they say, but how they say it a lot of times. And, over
time, our recruiting team has really developed their gut in terms of
whether what the right call is for a candidate.
We actually last
year had over 25,000 people apply to work at Zappos and we only hired
250 of them, so about 1%. I think I heard the stat that it's actually
harder to get into Zappos than into Harvard. So I'd say our recruiting
team does a good job of screening on the front end. And, yes, it is
true, they are not perfect and there are times when people do make it
through the process, but then everyone that’s hired goes through a
four-week training program. The same training program that our Call
Center Reps and it’s pretty hard to fake something for four weeks. And
so we also use the training program as part of... it’s almost like an
Question: Do you end up training
many people who are not eventually hired?
It really varies. It used to be really bad, it used to be that within
the first month or so half the people that were accepted in were no
longer employed by the end of the first month. But now the vast majority
do make it through. But we still get cases where, for example, we had
someone that was actually a pretty senior technical hire, and because we
are based in Las Vegas, a lot of the technology people we actually have
to relocate from other places. And this was a candidate that
relocated... we paid to relocate from L.A. to Vegas and he started the
first four weeks of training and by the end of the first week, it was
pretty clear that his attitude was that customer service was beneath him
and that really he was just waiting to make it through the program so
he could start the actual job he was hired for. But we actually ended up
letting him go during the training program—even though what he was
doing in the training program didn’t have anything to do with the actual
job function—because, for us, that’s how strongly we believe in the
importance of culture and in making sure that we are hiring people whose
personal values match the corporate values.
Recorded on May 27, 2010
Interviewed by Victoria Brown