Jun 06 2010

Delivering Happiness: A Path to Profits, Passion, and Purpose

Recently I received an advance copy of Tony Hsieh’s new book, Delivering Happiness: A Path to Profits, Passion, and Purpose and was asked to provide my thoughts.  Hsieh is the CEO of Zappos.com, an internet retailer of shoes and related merchandise recently acquired by Amazon, and the founder of the Delivering Happiness Book website.  Tony also was the founder of LinkExchange, an early internet success story that first made him wealthy when Microsoft purchased the company.  His new book chronicles both the highs and lows of his career, and concludes with a variety of lessons learned from his ventures. 

While I enjoy reading biographies and business books, I’m always a bit skeptical because I never know how much of the story is really told to educate and inform versus simply to sell a book.  And in the dotcom era, it’s not always easy to tell whether something works because it’s a good idea or it just worked because someone was in the right place at the right time with the right idea.  I was happy to see that the book is not ghostwritten, nor does it gloss over the good decisions and the bad decisions made throughout the course of the events of the book.  Reading the book one gets a sense of what Hsieh would share in a private, sit-down conversation.  That made the book an enjoyable and educational read.  And though his experiences are concentrated at the intersection of retail and technology, those of us in corporate real estate management must never forget that we live and work at the intersection of CRE and technology.  There is much we can learn from others in this fast-changing world.

In the early stages of the book, Hsieh provides a somewhat detailed, somewhat general summary of his journey to LinkExchange, his decision to leave Microsoft, his investments in other companies, his decision to leave Oracle out of boredom, and the struggles Zappos encountered (a success story which, by the way, is a post-dot-com-bomb success story).   This segment of the book alone is an enjoyable read, and the parallels he discovers between playing poker and doing business are particularly interesting as he moves through discussions on profit and passion.

However, I found more application for CRE professionals in the latter two thirds of the book, where he drills down into some of the counter-cultural approaches that made Zappos successful and led to the eventual acquisition by Jeff Bezos at Amazon.

One thing that Zappos excels at is customer service.  I find it quite telling that as I read this book on a flight to Atlanta from Seattle, a flight attendant saw the book and asked me if I worked for Zappos—and proceeded to tell me how much she loved shopping online with them.  Hsieh believes customer service is the most effective means of positive branding, and that word of mouth matters.  Writes Hsieh:

Too many companies think of their call centers as an expense to minimize.  We believe that it’s a huge untapped opportunity for most companies, not only because it can result in word-of-mouth marketing, but because of its potential to increase the lifetime value of the customer.

Usually marketing departments assume that the lifetime value of a customer is fixed when doing ROI calculations.  We view the lifetime value of a customer to be a moving target that can incrase if we can create more and more positive emotional associations with our brand through every interaction that a person has with us.

Another common trap that many  marketers fall into is focusing too much on trying to figure out how to generate a lot of buzz, when really they should be focused on building engagement and trust.


We don’t measure call times…and we don’t upsell.  We just care about whether the rep goes above and beyond for every customer…most of our phone calls don’t even result in sales.  But what we’ve found is that on average, every customer contacts us at least once sometime during his or her lifetime, and we just need to make sure that we use that opportunity to create a lasting memory.

I agree completely that the “lifetime value of a customer” is a moving target—even if your client is an organization rather than a consumer.  Determining an ROI on that spending–and that includes, in my opinion, social marketing and other intagible expenditures–is not currently possible without an expanded array of data correlations to work from. 

Hsieh believes that a company culture is an integral part of the ability of that company to deliver top service levels:

Advertising can only get your brand so far…At Zappos, our belief is that if you get the culture right, most of the other stuff–like great customer service, or building a great long-term brand, or passionate employees and customers–will happen naturally on it’s own. 

Hsieh then details the Zappos hiring process, which includes two sets of interviews—one for technical experience, and one for culture fit. 

Hsieh also expects his managers and employees to embrace and drive change.

Although change can and will come from all directions, it’s important that most of the changes in the company are driven from the bottom up–from the people who are on the front lines, closer to the customers and/or the issues,

Ask yourself: how do you plan and prepare for change?  Do you view new challenges optimistically?  Do you encourage and drive change?  How do you encourage more change to be driven from the bottom up?

Are you empowering your direct reports to drive change?

Interestingly, Zappos doesn’t believe in beating up vendors unncessarily.  Too often, silos are built in an organization, and mandates are issued to one silo with no consideration to the ramifications a particular mandate might have on another business unit or how those mandates might affect other parts of a process.  Writes one of Zappo’s senior managers, regarding contract negotiations:

Negotiations at Zappos are a bit different as well.  Instead of pounding the vendors, we collaborate…We don’t believe that negotiations need to be an arm-wrestling match.  If both parties are honest about our positions and objectives, we should be able to find an equitable way to get there.

We know there’s no way we could’ve achieved our success as a company without our vendor’s commitment and passion.

The manager goes on to describe the astounding degrees to which Zappos goes to make their vendors feel like a valued part of the team.

Hsieh also believes in promotion from within; rather than viewing employees as assets, he focuses on a different asset: “building a pipeline of people in every single department with varying skills and experience” to ensure that the benefit of a long term culture fit is not sacrificed to achieve a short term fix by bringing in someone who is not a cultural fit.

Hsieh closes the book by focusing on the premise that to deliver happiness, one has to have a calling to do what one does.  And at the end of the book Hsieh spends a chapter focusing on this topic, explaining what a “happiness framework” consists of: 

  1. Perceived control (can the employee choose to advance or remain where they are, based on their primary motivation—which may or may not be monetary)
  2. Perceived progress (promotions granted more frequently—six months versus 18 months)
  3. Connectedness (number and depth of your relationships)
  4. Vision / Meaning (being part of something bigger than yourself)

We live in a changing world.  And as it changes, our clients change, and we change.  We can learn from other organizations, particularly those that are successfully bridging the technological gaps between the 20th and 21st century business models.  There is much in this book to consider and evaluate how best to apply in the world of corporate real estate.

Josh Riley, CCIM

CRE LinkedIn Group

Disclosure: The reviewer was provided with a complimentary book copy to review.



About the author

Josh Riley, CCIM

Josh is the founder of creator of the CRE LinkedIn Group and Blog and has more than 20 years of experience in corporate/commercial real estate.