Successful Brands Begin with Strong Values

There is a heightened focus today on how to align touch points in every channel to create a powerful and seamless brand experience.

However, despite all the talk about marketing and IT converging, Big Data and the like, there is one inescapable fact that must be considered in order to create a truly meaningful omni-channel experience.

Companies can invest millions and concentrate their intellectual capital until the cows come home in an attempt to integrate or merge the online experience with the brick-and-mortar, but until their organization lives by a set of omni-values, it’s all just an exercise in futility.

Only when there is an internal buy-in to an organizationally embraced sense of purpose and company values will an environment be created in which a meaningful brand experience can truly thrive.

Company Values Case Study

Let’s consider one of the best examples of a brand that lives and breathes such values: Zappos.

If there were ever a hall of fame for branding visionaries, 30-year-old Tony Hsieh would occupy a special place in the pantheon. He took the unlikely proposition that people would want to buy shoes sight unseen, online or over the phone, and turned it into a brand with the equally unlikely name of Zappos, now worth over a billion dollars in annual sales.

He accomplished this in about 10 years, with a new way of doing business that delivers what he calls “wow.”

Today, of course, Zappos exists only in the online world. But let’s imagine for a moment what it would be like for it to branch out into the brick-and-mortar space.

Because Zappos is so committed to its values, it’s a pretty good bet that those values would be incorporated into any channel it enters. It’s also a good bet the customer experience would be every bit as grand because it would continue to benefit from the strong sense of purpose that is deeply ingrained in the DNA of the organization.

I see Tony Hsieh as a unique representative of his changing times. He grew up seeing monumental social shifts wrought by the digital revolution that so vastly influences how business can now communicate with us, one-on-one rather than en masse.

He is also witness to the slow death of the factory management mentality that wants us to shut up and just do what we’re told. Something I read on the Zappos website says it well: “Organizational democracy is inevitable. The Internet, the demands of generation X and Y to have a voice in the workplace, and the Gallup Organization report that nearly two-thirds of workers are disengaged at work, is causing businesses to rethink their management models and embrace a more inclusive style that will lead their industries, boost the bottom line and build a more democratic world.”

If this sounds lofty and idealistic, it’s only because it is. Work has to mean more than a paycheck. They do indeed see starting a company as a way to make a lot of money, but they also see money as a means to improve and expand on the value of the experience they deliver to their employees and the customers they serve. What they do for their living has to connect with the values that characterize a truly useful life.

Many of the changes in business practices wrought by Tony – from the way he looks at customer service to how he finds and engages employees – are becoming legendary, and he sees sharing them freely with other businesses as a way to change the world of work and commerce for the better.

The major drive is a monomaniacal focus on company culture as the number-one priority for success.

In his book “Delivering Happiness: A Path To Profits, Passion and Purpose,” Tony writes, “We thought that if we got the culture right, then building our brand to be about customer service would happen naturally on its own.”

This is not a one-plus-one-equals-two equation; rather, it is a one-plus-one-equals-a-billion-pairs-of-shoes-per-year equation. As Tony sees it, one feeds the other.

A good way to begin understanding the Zappos culture is by imagining you were applying for a job in the Las Vegas headquarters. No matter what kind of job you think you might want to do – accounting, phone rep, lawyer, software developer – you would start going through two kinds of interviews.

One is the usual looking at relevant experience and fit within the team. Another is a deeper evaluation of your cultural fit. It’s not just how smart you are; it’s how you are smart. It’s not just how intelligent you are; it’s how emotionally intelligent you are.

If you get past these points, you would then go through culture training, which involves a full four weeks of going over company history, learning the importance of customer service, studying the company’s long-term vision, and the Zappos philosophy.

With all the other newbies, you would then get on the phone for two weeks to take calls from customers. You would have to do this to live and breathe the customer experience as it’s more important than your individual specialty.

Now comes the amazing part.

After the first week, you and each of your fellow applicants would be offered $2,000 to quit! This is in addition to paying for the time you already worked, and it’s a standing offer until the end of the fourth week.

Writes Tony: “We want to make sure that employees are here for more than a paycheck. We want employees who believe in our long-term vision and want to be part of our culture. As it turns out, less than one percent of people end up taking the offer.”

Zappos & Omni-Values

It took a long time to distill what Tony and his partners define as their culture, but they finally got it down to 10 core values:

  1. Deliver “wow” through service.
  2. Embrace and drive change.
  3. Create fun and a little weirdness.
  4. Be adventurous, creative, 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.

Like many core-value statements, this one only jumps to life when you see how each one of them is practiced in ways that astonish even the most seasoned business leaders.

Building open and honest relationships with communication, for example, starts with the Zappos Culture Book, in which every employee is asked to write an impression of the company in his or her own words. It is published with no censoring or editing of even the occasional negative.

This book is also used as a reference handout to anybody interested in the company, including job applicants, suppliers, small business owners, etc. Even customers and vendors are allowed to place comments in the book, and many of them do – once again, completely unedited, no matter what the content.

It’s a great way to understand the culture as it is practiced day to day. It’s an equally great way for Tony and his fellow managers to see how their people view what is going on and to take remedial action when necessary.

There is also a monthly employee newsletter called Ask Anything in which any employee can ask any question anonymously. It is e-mailed to everybody in the company. Questions asked go from “Who is on the board of directors?” to “Where do you see us in three years?” to “Do vegetarians eat animal crackers?” No question big or small is left unanswered.

If you join the company at an entry-level, you will be expected to take certain courses along with mentorship if you want to get promoted. The usual practice of quarterly or annual salary reviews don’t work here. Do what is required for your personal growth and skills and you can reasonably expect to get into a senior position within five years and often less.

This fits the philosophy that hiring from within is preferable to looking outside for more senior staff. It’s what Tony calls building assets through a pipeline of talent in every department.

Novel instruction in such things as The Science of Happiness, Tribal Leadership, Leadership Essentials, as well as training in Human Resources, Intro to Finance, Communications, and Public Speaking, are among the 28 courses available.

Values Inside and Out

Zappos’ people consider their relationships with vendors to be one of the key components of the company’s success. Rather than treat them like mere suppliers, they are given the respect, courtesy and collaborative concern one would give to a valued partner.

It’s the little things that have a habit of exemplifying the Golden Rule in the way people are treated.

When vendors fly to Las Vegas for meetings in Zappos’ offices, they are greeted by a company shuttle. If it is the first time they get a tour, along with drinks and snacks – anything to make them feel comfortable.

Communication with them is as open as it is with any employee; in fact, suppliers have access to an “extranet” that allows them to see Zappos’ inventory levels, sales figures, and even profitability. They can write suggested orders for buyers to approve. They can communicate with the creative team. As many as a thousand vendors are invited to the annual Vendor Appreciation party and golf tournaments.

At every turn, they are considered valued members of the Zappos family. It’s fair to say that suppliers help Zappos’ people run their business and play a role in keeping the machine running smoothly.

This includes the people at Wells Fargo and UPS, both long-time partners who value mutual loyalty. It’s another testament to the power of culture as it permeates every aspect of the brand’s intent to share generously on a decent, human level that wins friends and ambassadors.

It impresses the heck out of me and it all seems like such an obvious way to go – one that rarely appears on the radar of most other companies as an essential issue of culture.

Of course, the payoff on all this enlightened operating procedure is the generation of a remarkable brand experience. By fostering the wellbeing of all the people who take care of the customers, you get people eager and willing to go the extra mile for the customers who make it all possible.

For example, most call centers measure employee performance based on how many calls each rep can take in a day, which is a poor way to foster customer care. Not at Zappos. Going above and beyond for every customer means no written scripts. Reps are encouraged to develop a personal, emotional connection in their own way, which makes the old-fashioned phone call a powerful branding device even in a high-tech world.

One customer call reportedly lasted six hours! As a kind of test, Tony and friends once called anonymously to find out if a rep could advise him on where to get a late-night pizza in Santa Monica. The rep put him on hold and took all of two minutes to come through with five choices.

People apparently call for reasons that have nothing to do with shoes and they always get a cheery response. If a customer calls about a style and size of shoe not in stock, the rep is trained to research at least three competitors and pass on the information.

The loss of a sale is not as important as building a lifelong relationship, one phone call at a time, as a lasting impression even though not many shoes are actually sold over the phone.

Order a pair of shoes and you can pretty much count on getting them the next day, sometimes within eight hours. If they don’t suit your fancy when you see them in the flesh, you can return them free, and you can do this up to a year after you buy.

Wow indeed!

High-Tech and High-Touch

Talks with Amazon CEO Jeff Bezos began in early 2009 and coincided with Zappos’ board members wanting to cash in on their investment. Jeff first suggested buying Zappos for cash, but Tony and his partners knew that selling was not their goal.

They wanted to continue building the brand and its culture. They wanted to continue to feel like owners, which is why they pushed hard for an all-stock transaction that was much more in the spirit of a marriage and analogous to a couple getting a joint bank account. It was good for everybody – a win-win situation good for Amazon, the board, employees, and shareholders.

Once again we see the good of the common welfare being at the cultural center of the way these guys work. Both Amazon and Zappos have a deep tradition of placing great value on customer welfare, albeit with slightly different approaches. As Tony says, “We thought of Zappos as being more high-touch, and Amazon being more high-tech.”

But it was clear that with a mutually committed focus on the customer, the marriage was not the kind of culture clash that can ruin many corporate mergers. Being a revolutionary kind of brand-builder in his own right, Jeff Bezos pledged that he would not want to change the successful Zappos culture that is so important to Tony and friends, one that feels more like a real, caring family than just a business.

A surprising benefit of the arrangement was that rather than a cause for doubt and anxiety, the merger announcement came as good news to employees. During the negotiation, legal considerations forbid any public discussion. This troubled Tony and his partners because they had always pursued the path of an open and inclusive culture.

When the announcement was delivered, they went to great pains to assure all staff that the arrangement with Amazon included the continuation of business as usual, that everybody was still in control of his or her own destiny, that nobody was going to lose their job, and in fact, every employee would get a new Amazon Kindle e-reader and a cash bonus of $10,000!

The more the stories of “Tony’s social experiments” are exposed, the more other companies want to know about them, and Zappos’ people are willing to oblige.

Stunning financial results achieved so rapidly had a lot do with attracting attention, as did making the Fortune 500 list of Best Companies to Work For.

What other companies learn from Zappos, however, might come as a surprise when they discover that it is all about developing and nurturing a culture that, in Zappos’ case, ended up in the pursuit of an astonishing mission.

The evolution of that mission has gone from largest selection of shoes in 1999, to customer service in 2003, to core values as a platform in 2005, to personal emotional connection in 2007 to delivering happiness to the world in 2009.

Creating a Belief System

“Happiness in a box” is how customers think of a Zappos shipment. It’s easy to see how employees see the company as the pursuit of happiness in and out of office hours, and even for suppliers it’s hard to imagine a happier, more caring business relationship.

What might sound like a very big stretch for a shoe company’s mission is indeed the very real pursuit of that usually elusive condition we call shared happiness. It’s quite remarkable and sets an example of how to prosper in the sometimes-cynical world of for-profit business.

A mantra of profit, passion and purpose works as an effective combination with great favor for Zappos people. The question you might now ask is, can you work similar magic in your own way for your business?

Whether you are shopping for a car, a cell phone, or a new pair of dress shoes, and regardless of whether you are shopping online or in a brick-and-mortar retail store, these endeavors involve countless touch points for a customer, including the emotional rewards of finding a new product or getting a good deal along with the inevitable frustrations about out-of-stock items or confusion with store or website layout.

People will take the whole experience in stride, but the emotional side of the mind will not easily forget the disappointments, even when people are conditioned to expect or accept them. To be great at omni-channel is to be great at creating the positive feelings that register in people’s minds.

To do that authentically in everything you do is a tall order for anyone. The brands that do it the best will not be so singularly focused on what the omni-channel experience should be, but rather, more invested in the higher purpose behind their businesses. It’s about creating a belief system, not just an experience. It will be easy to recognize the brands that will succeed at omni-channel – they’ll look more like a cause than a business.

With an ingrained set of omni-values, any brand will be better equipped to engage customers and build deeper relationships with them in any channel, omni or otherwise.

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