Jonathan Wolske is a culture evangelist for Zappos Insights, a division of Zappos that is solely focused on sharing the lessons learned while building Zappos’ culture. Jonathan talks regularly, and advises many brands about how to build a culture that works. We talk about Zappos and their flat hierarchy structure, and what most companies get wrong about culture.
Jacob: Hello everyone. I’m Jacob Shriar, Growth Manager at Officevibe. Today I’m honored and delighted to have our guest with us, Jonathan Wolske from Zappos. Jon, thanks so much for taking some time to chat with me.
Jon: Oh, Jacob, thanks for having me.
Jacob: Great. Maybe just to get started if you don’t mind can you maybe explain to everyone what the difference is between Zappos the general company and Zappos Insights. I’d love to learn more about that.
Jon: Yeah, absolutely. So Zappos.com is the retail website. It’s really the main part of the Zappos family. You might know us from selling shoes and clothing and accessories on the zappos.com website.
But, Zappos Insights was a spinoff that came about the end of 2008 because we had a lot of people asking questions about our culture. Why are we doing things the way that we do at Zappos? Why are we making statements that our culture is an important part of our business? And, how can I learn about that?
So, Zappos Insights really is its own separate division. We’re essentially doing consulting for culture which means that we’re going to tell you the approach behind why we do what we do here at Zappos. We’re never going to tell you to do exactly what we do. It’s really more about understanding why we’re doing it, and then doing it in a way that really makes sense for your people, for your organization.
Jacob: Okay, great. Thanks for that.
First question right off the bat for you, what’s it like to work at Zappos? It must be incredible.
Jon: It is. Imagine when you’re in school before high school. You imagine working, and you imagine hanging out with your friends. You haven’t quite caught on that work is typically not a fun place. It really is kind of that.
You never can tell what’s going to happen. I’m in a conference room and there are streamers around the TV, on the wall, and parades happen. But, more so than that work really happens, and work happens without anybody busting out the whips to say get back to work.
It’s an organization that is really aligned around a purpose. We hire and fire with the culture in mind so that we’re all moving towards that purpose of delivering great experiences. You come into the Zappos family with a full understanding of who you’re getting involved with, and then it really is just that all day every day. We work really, really hard, but at the end of the day it doesn’t really feel like we’re working too hard because we have a little bit of freedom of time and things like that.
Jacob: That’s awesome. Really, I don’t think you can say company culture in the same sentence without saying Zappos. You can’t really talk about Zappos without referencing their incredible company culture. You guys are the reference for company culture, the authority for company culture. Really, just incredible job you guys have obviously done.
Can you explain to everyone watching a little bit about the Downtown Project, really just go into detail on kind of what it is. Explain the initiative to everyone watching.
Jon: Yeah, absolutely. To be clear, Downtown Project is actually a separate company that is not a part of the Zappos family although we are very closely related. Our CEO and some other friends have a fund they put together. They’ve got a business called Downtown Project. You can check them out at downtownproject.com. They’re investing in real estate, and in tech start ups, and in small business in the downtown area of Las Vegas.
The way this ties into the Zappos story is that we’ve recently moved our offices into a campus that is in the downtown area. It used to be called city hall for Las Vegas. Now it’s our office. We’re right here in the middle of this bustling neighborhood.
But, as you may be aware, downtowns typically get forgotten. Then, bigger, newer things get built and shopping malls and centers, and Vegas was very much the same. So, downtown had been kind of forgotten. There was this touristy area that’s great called the Fremont Street Experience. But, beyond the touristy area that had been set up kind of to draw people there was this downtown that really was sitting empty in a lot of ways.
So, the Downtown Project is there to not only inject some funding for new businesses and new businesses into that area to get new life into it, but also with the tech start ups there’s a lot of thought that if we bring tech to Las Vegas that can really help the downtown area to grow.
Give it a new industry. As you know, Las Vegas is really well known for the gaming aspect. What if we could change that? What if we could get a lot of tech going on? As a business it makes sense to be in Las Vegas and be a tech company just because of the cost of living, the cost of being in business.
It’s just this really cool initiative. They’ve got all sorts of businesses they’ve already started in this first couple of years. They’ve got some restaurants. They’ve got a shopping container park, it’s built out of containers. They have live music and a playground area. Then there’s the tech side. It’s really this huge initiative. There’s a total of $350,000,000 that’s being committed to bringing these businesses to downtown and to making really big things happen for downtown Las Vegas.
Jacob: Yeah, and initially, like you said, kind of being championed by Zappos CEO Tony Hsieh. Unbelievable project and idea.
I have a quote here. I was obviously doing some research preparing for this interview last night watching a bunch of videos. There was something. We’re going to talk about this a bit more later on.
But, I’d love to hear your thoughts on this. It’s a very, very interesting quote and statistic. You might know this already, but I want to make sure that all the viewers understand this. It blew me away when I read this.
I just want to read this for you. ‘There is some interesting research which shows that as cities grow, as a city doubles in size the productivity doubles in size. The productivity per member of the city goes up, and yet as companies double in size, the productivity per worker goes down.’
Why is that, and what’s the difference?
Jon: As far as why is that, that’s a great question. I think when you look at the function and the way that a city works you have individual entrepreneurs who, with the exception of regulations from the government, are really doing their own thing. They may get feedback from other entrepreneurs or other people in the community, but it’s their thing to own.
As you get more people in the same small area as a city’s growing you get more interactions. One of the things that you’ll hear about from the Downtown Project and from Tony is serendipitous interactions or collisions where people who may be relatively unrelated end up meeting just on the street and having a conversation which may end up actually sparking an idea for either side or for both. So, I think that the reason that a city gets more productive as it gets more people really has to do with those collisions and the fact that if you’re going to be interacting with more people than you would normally plan to interact with you’re going to be getting a different type of feedback, a different type of inspiration for what you could be doing.
As businesses grow I think we all just kind of know that as a business grows you get kind of bogged down with size. You get bogged down by the fact that we are so big. It’s just naturally going to slow down. It’s probably also a little easier to hide the lack of work that’s going on just because the company’s still growing and there are so many people here.
Actually, I’ve heard that quote a few times. We actually discuss it when we talk about the move for downtown. We also talk about it when we talk to the move into our new system that we’re moving into. It really is that idea that if we can harness the impact of a growing city alongside the growth of a company can we actually stave off that lack or loss of productivity or even increase the productivity of the company as we work with the city.
Jacob: Yeah. Thanks for that. That was a great answer. That was essentially exactly what the guy was saying in the video. The guy who was talking in the video was Brian Robertson who I’m sure you must know very well because of Holacracy which is my next question for you.
You know, it was all over the news of course, Zappos switching to Holacracy. I just want to ask you first of all maybe if you could take very briefly explain what it is. Then, I’d love to get your insights on how the transition’s going, how that’s all working out for you guys.
Jon: Yeah, absolutely. We actually put up a website recently on zapposinsights.com/training/holacracy to really kind of break it down and break down some of the misconceptions. I’m just going to read from that because I’ve only been through a few trainings and meetings with Holacracy so far.
In holacracy.org is the company HolacracyOne that’s helping us implement this new system of governance. They say that it’s a comprehensive practice for structuring, governing, and running an organization. It replaces today’s top down predict and control paradigm with a new way of achieving control by distributing power.
It’s kind of a new operating system, and much like the city…and yeah, I’ve met Brian. He facilitated one of the trainings that I was at. He talked about that same idea of the city where if we have people who are working and doing jobs, and they function like the entrepreneur where it’s their thing, and they’re going to take input as it’s needed, but they’re really going to own it and be a business owner for it, it’s going to do much better than if we try to package them into this big old hierarchy.
The idea behind Holacracy is awesome. Seeing it in action now for the last little while has been great. I was part of a team, a group of teams that were part of a pilot project to test it out to see how it looks, to see how it works, and then to see if it was something we wanted to move forward with company wide.
We’ve actually only recently made the decision that we’re going company wide with it. So, the transition is still in the very starting stages. We have, I’d say, 15 to 20 percent of the company that has been through the training, understands the systems. It does put in place some meetings in the structure of Holacracy. It’s kind of unlearning and relearning a new system.
I would say that it’s going well as far as the transition goes. We just understand that this is going to be a very long process. What it’s really going to look like by the time everything’s rolled out we don’t even know. It’s kind of exciting.
Jacob: Definitely. Thanks for sharing that. When we post this video up on our website we’re going to definitely link to a bunch of very cool articles. I did a lot of reading last night on Holacracy. It’s much cooler than I originally thought it was. It’s much more interesting than I really thought it was.
Tony Hsieh really seems like such a cool, calm, relaxed guy. I’d love to understand how much, I’ll say influence, he had on the culture there at Zappos.
Jon: Well, as a CEO obviously quite a bit, but not only just because Tony’s the CEO. It’s because Tony gets you involved with things. He doesn’t come into the company and say we’re going to do this because I’m the CEO. What he says is essentially here’s a why. Here’s why we need to do something. Then, here’s what we can all do to get involved.
A couple of examples in my six years with Zappos that I’ve seen, a big one was the Amazon buyout. Instead of just telling us here’s what’s happened, he tells us here’s why this has happened. Then, he says and here’s what it means for us. So, very much that idea of starting with why before just starting with what.
But, he also really makes you a part of it. You just know that he’s on your side. He’s not the CEO making a ton of money, which I’m sure he probably is, who doesn’t care. He’s the CEO who’s a team member first and foremost who happens to be the CEO.
Yeah, a lot of it comes from the fact that Tony saw the vision that we had to define our culture. He understood and expressed the need to really be committed to the culture so that once we make this statement that this is who we are by defining our values we have to be willing to hire and fire based on that.
But, that was it. It was a vision, and then all the actual work to define the values came from everybody at every level in the company. It was really he has a lot of authority as the CEO. He doesn’t wield that authority, especially not lightly. It really is more inspiring people to be a part of something and then letting them take their part in it.
Jacob: Yeah. That’s kind of the… I won’t go into too much detail, obviously. But, that’s kind of the basis of the framework Holacracy. It’s really totally decentralized, and it totally takes power away from the top and really just gives more power to roles. Anyway, I won’t go into too much more detail. Like I said, I’ll put it up when we actually post the video.
You know, I’ve heard people say before – I’d love to hear your thoughts on this – that culture really needs to be baked into the company’s DNA from day one kind of from the beginning. I’m wondering. If you have a bad company culture can you really turn it around so many days later? Or, if you have it baked in from day one, are you screwed? What’s the answer there?
Jon: No. There’s definitely good news there. It’s that culture really can be a fluid thing. Culture shouldn’t, however, be something that feels like forced and corporate.
I think the big understanding there is if you have a bad culture and you feel that you’re doomed by it that you just first need to stop thinking about it in that way. Your brand and your culture, the quote from Tony is that they’re two sides of the same coin in that your brand is just a lagging indicator of your culture. Also, your culture really shouldn’t come from an initiative from the top. It should be defining who you are.
If you have a very old company and maybe the culture has either gotten bad or it’s just no longer relevant, you can just take that step back and say okay, hold on a second. What’s been our success in the past? Who are we now? What are the values that are driving us and that we can use for success in the future? Let’s define that. Let’s commit to that. Moving forward, let’s just live that.
There’s really no time that is a moment of being doomed for your culture. Obviously, if everybody leaves your company you can start from scratch if your culture’s that bad. Not that I’m wishing that on anybody, but if it really gets to that point there is always kind of the option.
If you have a large functioning group that’s doing really well there are two kinds of questions. You won’t find this formalized anywhere. These are just questions that I’ve kind of come up with, big picture questions to get the conversation going.
Ask people, what is the best part of your day? Start to find out what’s driving people. What are the values that are present in the organization? Then, on the flip side, what’s the worst part of your day?
You don’t ask those questions in a locked closed door meeting. You ask those questions as casually as you can that makes sense for your group. Start to feel out what are the values that are present here. What are the values that people hold that are being violated? That’ll be the worst part of your day. Let’s just start the conversation. Who are we then?
The whole approach that Tony took was asking the entire Zappos family to define the behaviors and values that are here at Zappos. There’s never a moment where you can’t have that discussion. It might be a hard discussion to have. It might lead to a hard, hard journey.
We’re not going to say that this is always easy. But, you can start the conversation, and there’s always hope that you can really focus on what’s important which is your people. Because first and foremost if you don’t have people working you probably don’t have a business going because the work doesn’t get done. And, if you don’t have people who are enjoying your business, customers or clients, you don’t have a business to come back to tomorrow. Everything comes down to people.
Then, we know that there are big picture things like bottom line, margins, and money to make. Yeah, Zappos is still a business, and we’re still here to sell shoes and products and make money. But, let’s focus first on how we’re doing that, how are we treating the people in the company. Then, the people in the company will more than take care of the customers and the vendors and the business partners. Those relationships get better. Then, overall the brand has a very long life.
There’s no point… We were lucky that we organically grew into defining the culture that we already had. But, to encourage anybody who’s listening who feels doomed, there’s never a moment where you can’t say wait, wait, let’s figure this out. We can turn this thing around. We can really get it working so that everybody is going towards that higher purpose, something more than just function and making dollars for the company, but really understanding why we’re here doing what we’re doing.
Jacob: That was amazing. Thank you so much for that. I love those two questions. So simple, but so powerful.
You know, when I was doing the reading and watching videos last night trying to prepare for this talk it finally clicked to me why I love Zappos so much. They’ve totally reinvented call centers.
I used to work at a call center. The thing that I noticed at call centers was there were always these policies and quotas to meet and potentially scripts to follow. If they ask you this you answer that.
Whereas at Zappos you’ve totally given freedom to the CSR, the call center reps, to just use good judgment and be good humans. Some insane, crazy, beautiful stories have come from that attitude. One, obviously, the record breaking over ten hour phone call. Another beautiful story I heard was sending flowers when someone had passed away, one of the customer’s parent passed away. Just such nice stories.
My last question for you is you talk with a lot of companies. You deal with a lot of companies in your role. I’m just wondering. What do you think most companies get wrong about company culture?
Jon: I think most companies, especially if you’re a big, large, old, functioning machine, you think that culture is stuff. You look to what are these startups doing, or what is Zappos doing. You see that we have parades and we have a ping pong table. Those are all things that are there and they’re available because of the culture.
But, the culture itself is not those things at all. Our culture includes great fun and a little weirdness. That’s why those things exist. It’s not about doing the things or having the things in place that should be good for culture.
Culture is really about that conversation between your people. Culture is even from your clients. Why are you doing business with me rather than doing business with the competition? There’s a culture. Part of your business is there in that reason. Not just the functions that you perform for people.
I think what most people get wrong is that they think if they put a few fun things in place they’ve changed their culture. While I’m a huge advocate for fun and for parades and things like that, they can’t be what starts the change to your culture. They can be a part of a process. They can be something that lasts for a long time like they have here at Zappos. But, they have to be because of the culture. The culture is not going to be made because of those things.
I think, yeah, the big takeaway for what not to do is that culture defines who you are not what you do. It doesn’t define the stuff you have. It doesn’t define the business you’re in. It defines… Specifically, culture is who are we. Once we get that nailed then we can have this solid brand that can be about something. Then, our culture can grow forward from there.
Jacob: Yeah. That makes a ton of sense. You know, chatting with all these people who are passionate about company culture and leading HR and different things like that, the theme that I seem to hear over and over again about when I ask that question about what companies get wrong or how companies do or this and that I hear the word “why” all the time. I think that’s so important.
You said that in your answer. It’s really about asking why are we in business, why do we sell shoes. Zappos is a perfect example. I don’t quite know the exact quote word for word, but, it’s something like you’re a customer service company that just happens to sell shoes. You’re not a shoe company.
Jacob: Anyway, I think we’ll end it here. Honestly, Jon, I want to thank you so much for taking some time to chat with me. This is incredible. I also want to thank the entire team at Zappos Insights for what you guys are doing. I think it’s beautiful, the fact that you’re kind of sharing all of your lessons with everyone else.
Hopefully, both Officevibe and Zappos Insights can help push that positive company culture across the world. Because I’m sure you’ve seen the numbers. Most people aren’t happy in their jobs. I think both you and I are on a mission to change that forever.
Jon: Yeah. We’re just honored to be able to be here sharing. It’s the best job in the world.
Jacob: That’s great, awesome. Well, thanks again, Jon, and we’ll see you next time.
Jon: Yeah, take care.