Tony Hsieh free essay sample

Anthony (Tony) Hsieh was born in 1973 to Taiwanese immigrants in Illinois, and grew up in the San Francisco bay area. He graduated from Harvard University with a degree in computer science in 1995 (The Billion-Dollar Question about Tony Hsiehs Las Vegas Experiment). In 1966 Tony Hsieh founded a business called LinkExchange with his college roommate. When Hsieh was only twenty-four years old he sold the business to Microsoft for $265 million (Tony Hsieh on His Secrets to Success). The main reason Hsieh and his partner decided to sell LinkExchange, was because the culture in the company had gone bad. â€Å"I was dreading waking up and going to work at my own company† Hsieh said to Niblez. com. This realization defined Hsieh as a leader throughout his remaining career. His dread of waking up to go to his own company inspired him to create an environment where culture plays a crucial role. He is very passionate about companies’ cultures and has stated, â€Å"Companies that have strong cultures outperform companies who don’t† (Zappos CEO Tony Hsieh Explains Why Company Culture Matters. We will write a custom essay sample on Tony Hsieh or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page ). Hsieh got involved in the small shoe company called shoesite. com as an advisor and investor in 1999, about two months after the company was founded. The shoe company’s name changed to Zappos after the word zapatos, which means shoes in Spanish (The Zappos Family Story). Tony Hsieh invested $500,000 in the company and became the CEO of the company in 2000. During his leadership, Zappos has grown gross merchandise sales from $1. 6M in 2000 to over $1 billion in 2008 by focusing on its customer service (Hoovers). Zappos has thirteen hundred employees and is headquartered in Henderson, Nevada and also has an office in San Francisco and is working on their newest location in Las Vegas, Nevada. Zappos has been ranked as one of the best companies to work for by Fortune Magazine many years in a row. In 2011, Zappos was ranked number six on the list and in 2012 it was ranked number eleven (â€Å"Lexis Nexis†). Tony Hsieh undoubtedly possesses many traits that make him a leader and has produced an effective management style that has allowed him to create extreme success at Zappos. Hsieh is determined to succeed, ambitious even when facing failure, modeling the way through superb customer service, challenging the process by choosing to be untraditional, inspiring a company wide vision through his democratic management style, enabling his employees to act in an environment they can thrive in, and remaining confident in his company culture. By doing this, he has modeled a new way of effective leadership and created a successful company. Tony Hsieh’s determination is what sets him apart from other leaders in Corporate America. He has been entrepreneurial all of his life. From middle school on, he had his eyes set on the prize and ran a mail ordering service. From then he continued on to study at the prestigious Harvard University. While attending Harvard he ran a Grille where he would travel by subway to McDonalds every day to purchase a hundred frozen hamburgers patties that he could sell at a higher price, and then he ended up investing in pizza ovens that would deliver a higher profit (Hsieh). After that he invested in LinkExchange, and by the age of twenty-four he was investing in what is now one of the largest online retailers, Zappos. Without the determination to succeed, Tony Hsieh would not be in the position of where he is today. He has been an entrepreneur his whole life and was bound to end up with a great company. As Hsieh quotes in the first section of his book, Delivering Happiness, â€Å" I failed my way to success. † This famous quote by Thomas Edison perfectly expresses Hsieh’s leadership trait of ambition. From a young age Hsieh was a go-getter; he describes purchasing a worm farm at the age of 9 to breed and sell, which was a failure, calculating how much money he would make by distributing papers around his neighborhood or selling greeting cards. His biggest childhood business success, and the way he would become a billionaire, was his button making business that made him over $200 a month. These little steps of entrepreneurship led him to his first multimillion-dollar business, LinkExchange, and then on to Zappos, which grosses about $1 billion annually (Hsieh). His success with Zappos did not come easily; it was not until he realized his boredom at his previous jobs at Oracle and LinkExchange that he decided to strive for more than just a money-making business. At Zappos, Hsieh combines his ambition to make money with an environment that also makes his employees ambitious. His ambition allows him to have a management style that encourages his employees to grow within the company. As stated in the Zappos core values, he wants his employees to â€Å"pursue growth and learning,† because Hsieh believes the secret to success is a vision with passion behind it and that cannot be successful without everyone feeling like they are contributing to the vision (Quiqley). Tony Hsieh models the way through customer service, which is his number one priority for being an online retailer. He has made it his commitment to have all his employees trained in excellent customer service, and he prides himself on it. By having an online twenty-four hour help service and shipping delivery within five days, he is able to make sure all of his Zappos customers are happy. He stated his vision and modeled the way for all of his employees as seeing them as equals rather than being their leader. â€Å"We figure the best way to have an open-door policy is not to have a door in the first place† (â€Å"How I Do It†). As crazy as it may seem, this is why his business is effective and is so profitable. The employees can relate to him, and therefore they are able to better relate to the customer. â€Å"He participated in all of our activities throughout the week, but is clearly intent on being a platform builder, not a figure head. There was no motivational speech, only the evidence of a like-minded, fun, creative, focused group of people† (â€Å"Tony Hsieh on His Secrets to Success†). Tony Hsieh does not act above anyone; rather than dictating, Hsieh models the way for others to act by being involved on a day-to-day basis. Choosing to run a business can be a tricky thing to do. Tony Hsieh not only models how a leader should be, but he has also challenged the process along every step of the way. When he first started LinkExchange, which he later sold, he felt as though he was not using his full potential. He felt like he was stuck behind a desk and business was business. His passion, determination, and drive died. Once the company sold, Hsieh realized that he wanted to create a new culture and transform Las Vegas. Instead of focusing on the income he was bringing in, he focused on the potential of the people who would be living and working for him. This approach is not common in Corporate America; he wanted to change the workplace for everyone to be involved. His core values to change the culture include embracing drive and change, building a positive team and value, do more with less, create fun, build open and honest relationships, be humble, be a positive team, be open-minded (Quiqley). To keep a positive culture, each employee is interviewed with behavioral questions to make sure they are a right fit for his company. Most employers do not ask these kinds of questions and this is challenging the process through a CEO point of view. â€Å"I think it’s a combination of how self-aware people are and how honest they are. I think if someone is self-aware, then they can always continue to grow† (On a Scale of 1 to 10, How Weird Are You? ). He has enforced these core values in all aspects of business and overcome any obstacles he was faced with. Tony Hsieh inspires a company wide vision by motivating employees through a company vision that is about more than being number one. It is about running his business in a democratic style. He chooses to treat all his employees with extreme value and make the company values mirror those of his employees. The New York Times describes Zappos as a â€Å"highly social company where workers get free sodas and popcorn, decorate their cubicles, are invited to share ideas and can climb the career ladder from inside. † Hsieh wants to hold onto his employees who he thinks are the best and give them a chance to grow without ever leaving. To do this he creates a comfortable environment where his employees can feel motivated, enjoy themselves, and want to succeed within the Zappos structure. The Zappos culture and way of business allow the employees to set high goals- that are also realistic- of where they want to see themselves at Zappos in the future. In Hsieh’s book, Delivering Happiness, he reveals his framework to a successful business, which he calls â€Å"Happiness Framework 1. † In â€Å"Happiness Framework 1,† Hsieh discusses his way of handling pay raises and promotions. For example, in his call center, he uses a pay raise system that allows the employees to take control of their own pay raises and when they receive them; to do this, the call center representative has a list of skill sets that they must achieve, for each one complete and they receive a raise. By doing this, he notices his employees are happier when they have control and an ongoing sense of perceived progress. Hsieh’s democratic style of management was also influenced by rave culture, which he participated in during his younger years, and the mantra PLUR, that stands for â€Å"Peace, Love, Unity, Respect. † From this culture he realized that everyone is human at core, and instead of losing sight in business, politics, and social status, we should be appreciative of each another and our work (Hsieh). Tony Hsieh enables others to act by creating an environment that his employees can thrive in and be inspired to input new ideas. Zappo’s core values of being â€Å"adventurous, creative, and open-minded†, lead his employees to believe that anything within the business is possible. Hsieh believes that by focusing on inspiring his employees the overall business will be better (Quiqley). For a Zappos employee, anything is possible with the right planning and determination. For example, an employee thought about how many company birthdays there were at Zappos; from that thought she came up with the idea of putting a bakery in Zappos. When it was someone’s birthday, she would bake him or her a cake and deliver it right from inside the Zappos building. She planned her idea and pitched it, and with that Zappos funded it (Young). This management style of enabling others to act and thrive comes from Hsieh’s growth within the businesses he worked for and created, from working at Oracle to quitting Oracle and creating Internet Marketing Solutions to turning that business into LinkExchange and finally moving on from LinkExchange to explore and recreate Zappos. Tony Hsieh is confident in the culture that he creates for Zappos and keeps the culture of the company the number one priority. Hsieh says, â€Å"Its important to me to build a business where money isnt the primary motivator because in tough times, Ive found that it isnt enough to see it all the way through† (Tony Hsieh, The Billion Dollar Interview). When Zappos has a new hire, he or she goes through a traditional interview; once he or she passes that interview, the next interview is entirely based on how that person will fit in the company culture. If he or she gets hired, after a trial period, Zappos will offer him or her money to leave. They pay their new employees for the amount of time they’ve been working at the company plus a $1000 bonus. The reason for doing this is that Zappos knows that the environment is not for everybody, and they only want people there that really want to be there and like the culture of the company. By offering the new employees money, it is easy to sort out the people who are a really great fit and those who would rather take the money. About 10% of the new employees choose the money. The people that would rather have the money are not the people who are going to fit into the culture anyway (How I Did It ). â€Å"I think that happier employees lead to happier customers, and happier customers lead to better business overall,† Hsieh has said in an interview with success. com. He has also said that the best advice he ever got was to never forget that the most important thing in life is the quality of life we lead, which drives him to maintain the quality of life and culture at Zappos (â€Å"Tony Hsieh, The Billion Dollar Interview†). Tony Hsieh is proof that determination and creating a company culture that everyone can strive in leads to a successful business, motivated employees, and, most importantly, happy and satisfied customers that keep coming back. Hsieh not only challenges the way a business is traditionally run but creates an environment where he views his employees as valuable, gives them opportunities to climb the Zappos’ career ladder, and always welcomes new ideas. Hsieh pushes his employees to be creative, take risks, embrace change, be a little weird, have fun, but always remember the customer and the tools to provide excellent customer service. There are many traits we admire about Hsieh’s management style, but there are four main traits that really stick out. First, we admire his ongoing determination within Zappos. Though Zappos is already a successful business, Hsieh is always working to make it better and using his employees to help him do so. His personal adaptability makes him embrace the changing work environment at Zappos. Second, we admire that he includes everyone in all processes that affect Zappos. He is open to new ideas and how those ideas can be applied to make Zappos better. Third, he does not want his employees to leave in order to grow. He wants his employees to grow and improve within Zappos while always staying satisfied with an ongoing pursuit to be better or to reach a goal. Lastly, we admire how he uses his leadership to project a positive message and to uplift his employees. Hsieh knows that without his â€Å"Tribe† (employees), Zappos could not be where it is today.