The Real McCoy: Disrupting disruption
by Sean McCoy (@TheRealMcCoyTRM) While the likes of Uber, Airbnb, Snapchat, Facebook and a long list of other game-changing platforms have been fundamentally technology-based, it strikes me that not all disruption needs to be a function of the world of bits and bytes. There is the often-overlooked role of people that comes into play.
So, while boards of directors are being reconstituted to face the future through the internet of things and boards themselves are preoccupied with this, perhaps we need to be reminded of the capability that exists through people and a disruptive approach to competing through culture — a more positive and proactive culture than what Uber has been experiencing of late and, essentially, disruption through the power of people.
Enter Tony Hsieh
Ironically, a tech entrepreneur himself, who was a millionaire at the age of 24 emanating from the successful sale of LinkExchange to Microsoft, Tony Hsieh has been drawn to the connectedness and sense of tribe, suggesting that being part of something bigger than oneself leads to a greater level of happiness. For him, the right tribe is a space where people feel truly connected and care about the wellbeing of one another.
Through the formation of a venture capital fund, he has invested in a startup called Zappos (Zapatos being the Spanish word for shoes) and has made a foray into the somewhat-ordinary online shoe business, but one that is promising to be disruptive in its approach to customer service.
Going beyond the cliché, Hsieh believes that an obsession with customers and delivering a truly wow experience is the strategy that would differentiate. Staff members are fanatical about service, constantly seeking to surprise, amuse and engage customers. A ‘please at any cost’ orientation has led the approach and includes many initiatives, one being a 365-day free returns policy. Its whole philosophy is to deploy the bulk of its marketing spend into customer experience and allow word of mouth to be its true form of marketing.
It also believes that the customer who calls the company is worth five-to-six times the lifetime value of one who transacts online only. Every effort is therefore made to drive telephonic contact with customers — an interesting and contrarian approach to the tech-orientated thrust of e-commerce.
Zappos doesn’t play by the conventional call-centre performance rules. All new recruits have to undergo several weeks of active call-centre training and involvement, irrespective of their role. There are no incentives to get customers off the line quickly and to manage call time. There are also neither prepared scripts for agents nor encouragement to upsell customers. There is a real commitment to service and to developing personal emotional connections with clients. This principle also extends to suppliers who are made to be an extension of its business, with same-day responses to telephonic and email queries and open online access to key sales and inventory metrics that ensure transparent supplier involvement in ‘the running of the business’.
A slightly ‘weird’ culture is encouraged and employees (referred to as members) are invited to be themselves, decorating their office in a very unusual and quirky way or coming to work in fancy dress. Work-life integration has been developed as the alternative to work-life balance, reflecting the belief that the two may be enjoyably inseparable, given the right conditions and the right people.
Zappos has developed the renowned ‘offer’: US$3000 to any employee who wishes to leave the business after training and at any time in the future. This serves as a test to ensure that staff is not just there for the salary but is committed to the long-term Zappos vision and culture. This is in spite of Zappos not paying the most-competitive salaries in the industry but clearly offering a culture with a difference — in 2013, 25 000 people applied for a job at Zappos and only 250 were hired.
Although the company was acquired by Amazon, it has been allowed to operate independently and under Hsieh’s leadership. Amazon has undertaken to protect the Zappos culture and give it the desired freedom to function autonomously and continue on its successful path.
Zappos continues to disrupt through culture and, in 2013, was one of the best-known adopters of holacracy worldwide. This is defined as a new organisational form with a flexible, self-governing structure, where there are no fixed jobs, only temporary functional roles. Holacracy intends, among other things, to help employees make full use of their skills, collaborate effectively and improve the company by eliminating bureaucracy and bottlenecks. In its most-ideal form, it aims to empower everyone to be entrepreneurial.
While not without his detractors, who’ve implied that he is more-engaged in social behavioural experiments rather than business performance, Hsieh has provided much food for thought in his approach to innovation and disruption. In a world that is increasingly dehumanising progress, his is an excellent illustration that disruption through people is still a very viable option.
- Tony Hsieh at Zappos: Structure, Culture and Radical Change, Insead 2016
- Hsieh, Tony. 2010. Delivering Happiness: A path to profits, passion, and purpose. Boston, MA
Dr Sean McCoy, MD and founding member of HKLM, is a prominent figure in the branding arena, with his expertise centered on client service, brand strategy and business development. He contributes the regular “The Real McCoy” column focusing upon internal branding to MarkLives.