Delivering Happiness: A Path to Profits, Passion and Purpose

Many organizations would balk at tactics like these. But many of us would do well to take a page or two out of the Zappos play book. The company's customers are incredibly loyal, and its employees are engaged and passionate about what they do.

So how does Zappos do it?

Well, that's what "Delivering Happiness" is all about.

"Delivering Happiness" is an incredibly thoughtful book that blends autobiography with subtle business how–to. Tony Hsieh has written a highly–entertaining, often moving account of how he's made a success of his life, and how he, and Zappos, evolved to chase far more than just the bottom line.

But don't think the author glosses over the low points and tough decisions along the way. We get to read about his mistakes, his bad investments, and all the times Zappos almost went bust.

The book is definitely a page turner.

So, what are you going to learn here?

Well, the book is valuable on several levels. First is the author's bumpy road to success. Thanks to his fun, conversational writing style, reading about Tony Hsieh's life is a real pleasure. Going through the book is like getting to sit down with him over coffee while he tells you all the funny stories about how he almost didn't make it. And believe it. Hsieh can be hilarious.

What's more important is that we get to see first–hand how following our hearts and doing the right thing really pays off. We learn some valuable lessons about staying true to ourselves, even when we're negotiating million–dollar business deals. And we see that when we focus on the happiness of others, we increase our own happiness along the way.

If you're in any kind of leadership position, this book is definitely worth your time. And even if you're not, you'll still learn some valuable life lessons from this book.

The author, Tony Hsieh, has founded several companies. At the age of 24, he sold his company, LinkExchange, to Microsoft for $265 million. As CEO of Zappos, he helped the company grow from a floundering startup to over one billion in sales, all the while keeping his employees happy and engaged.

So, keep listening to find out why outsourcing your core competencies may not be a good idea, why Zappos never measures its call times, and why letting your team be a little weird might be a great business strategy.

As you heard earlier, the book is a blend of business how–to and autobiography. The first few chapters cover Hsieh's formative years, and some of his earliest experiences as an entrepreneur.

Hsieh's first business venture was an investment in a worm farm when he was 12. Like most early steps, this particular business didn't pan out. But reading about his various attempts to make money through middle school and high school is surprisingly entertaining. You may want to stop reading and skip to the meatier chapters later on, but Hsieh's humorous look at his early life will keep you turning the pages. Some of his stories are just downright funny.

Hsieh's first major success came when he started the innovative company LinkExchange. The company was the frontrunner for Internet advertising in the mid to late 90s. And when Hsieh finally sold the company to Microsoft, he did it for a staggeringly large amount of money. He was 24 at the time.

The book really begins to pick up once Hsieh gets involved with Zappos. In 1999, the company was little more than an idea, with barely enough sales to stay afloat. The owner contacted Hsieh to see if he would be interested in investing in the company. Hsieh had been searching for something exciting to get involved in, and decided to become a partner.

Chapter four is when things really get put on the line for Hsieh. The funds from his profitable sale of LinkExchange are running low, and he's having a hard time finding funding to keep things going.

This is another section where you won't be able to stop turning the pages. The company has to trim expenses or they're going to go under. Hsieh decides to work for $24 a year. Many employees can't afford to take a pay cut because they wouldn't be able to pay their rent, so Hsieh started putting beds in his own loft space to house his team. He lays off the underperformers. Everyone left is the core group; the ones who passionately believe in what Zappos is trying to do.

Hsieh learns some really valuable lessons during this make or break time. Since his only goal is survival, he decides to trim his marketing budget to almost nothing and focus on getting his existing customers to buy from Zappos more frequently. To do this, he has to start providing better customer service.

He admits that this lesson was a blessing in disguise.

But simply providing better customer service isn't going to save the company financially. Hsieh has a few months, at most, to turn Zappos around. He's already sold almost everything he owns to keep the company afloat. After that, he's going to be out of money and the whole enterprise will be broke.

To say it's a tense time is an understatement.

What's interesting here is that even though Hsieh is under the gun, he's gaining insights about himself, and people in general, that are going to have a huge impact on how he runs the company in the years to come.

So how does he finally end up saving Zappos? Well, you'll have to read the book to find out. But the solution he hatches with his partner is brilliant.

We wish we could say that Hsieh's solution saved the day and everyone lived happily ever after. But the tension just doesn't let up.

Hsieh's brilliant plan does catapult Zappos into a position where it's actually starting to make some real money. But the problem now is the company doesn't have the logistics in place to handle its incredibly wide array of brands, and the increasing orders. All its shipments used to be outsourced to a logistics company, but they weren't coming close to getting product out the door on time.

It's here that Hsieh learns another valuable lesson, which is never to outsource a core competency. He realizes that timely shipping is essential to his business. So why is he putting it in the hands of someone else?

He decides to open up his own shipping warehouse in Kentucky to help cut down on delayed orders.

Hsieh's admits this was one of the most stressful times in his life. And, as a reader, you can't help but feel that tension coming right off the page. Hsieh's writing style is so approachable and natural, you feel as if you really are living the ups and downs that he is, trying to get Zappos off the ground.

There were times when we were sweating it for him.

With Hsieh's persistence and a few lucky breaks, things start to turn around for the company. At least, they're not about to immediately go out of business from lack of cash every month.

But the company doesn't really turn into the Zappos we know today until after 2003. Hsieh is eating at a Mexican restaurant with his partner, when they start to talk about the future. That is, the real future of Zappos.

Hsieh believes that the company should be about far more than just selling shoes. And he doesn't want to only focus on making money either.

That's when he decides to make Zappos all about providing the very best customer service. Now, he'd realized earlier that customer service was incredibly important. And at this point, Zappos was providing decent customer service. But now Hsieh decides to raise the bar, and make it a company mission. He wants Zappos to be known for caring about their customers.

The decisions Hsieh makes to do this aren't easy. One of them involves cutting off a major revenue stream. That part of the business was easy money. But it was also the leading cause of delayed shipments and customer complaints. So even though money was tight, it had to go if they were going to walk the walk about customer service.

Hsieh also encounters another problem with his customer service department. His goal is to have an outstanding call center. But he can't find good people. Most of his customer service reps see their jobs as temporary. And, their passion just isn't there.

He briefly thinks about outsourcing, but then he remembers the important lesson he learned from his shipping department. Never outsource a core competency.

Now, most companies would have just opened up a satellite office somewhere else, somewhere they could find high–quality people. But Hsieh didn't want to do this. He wanted customer service to be a part of the entire company, not just one department. So he invited all 90 employees to move to Las Vegas to open up a bigger office there.

He thought maybe half of them would say yes. But in the end, more than 70 ended up making the move. This marks the beginning of the Zappos revolution. Hsieh has always known his people have to come first, right alongside providing excellent customer service. But now he really starts creating a plan to make that happen.

The latter half of the book is where readers will start to gain some insights that can help them with their own leadership. For instance, as Zappos grows, Hseih starts a monthly company newsletter called "Ask Anything." Here, employees are invited to ask any question they want, from serious questions about corporate growth to the downright silly.

Another innovative initiative Hsieh started has to do with his call center reps. Most online companies time each call. The goal is to have reps whittle down this time, so they can take more calls per day. But to Hsieh, this means they're focused on getting people off the phone, not on providing excellent customer service.

So, Zappos never times customer service calls. And, reps don't have any script or up–selling techniques. Employees are trusted to use their best judgment when dealing with customers. And so far, their longest customer service call has been over six hours long. For Hsieh, that's something to cheer about.

Reps do have to do one thing, however. If a customer calls looking for a shoe that's out of stock, then reps have to investigate at least three competitors' sites to find that shoe for the customer.

Does this mean Zappos loses the sale? Yes. But Hsieh believes that personal contact is a way to make a lasting impression with people. It's not about the sale. It's about making the customer happy.

These last chapters are full of really innovative ideas for walking the walk when it comes to service and corporate culture. There's a very useful list on page 147, titled "Top Ten Ways to Instill Customer Service into Your Company."

One really creative way Hsieh builds on the corporate culture is called "The Face Game." When employees log into the company intranet every day, they must use a username and password. But, there's a third step. A photo of a randomly selected employee is displayed. In order to log in, you must choose, out of three options, who that employee is.

Once you've made your choice, right or wrong, that employee's profile and bio page pops up, so you can learn more about them.

There's some really funny stuff in these last sections. It's inspiring to see how much creative freedom the company gives employees. Hsieh admits that his team has a touch of weirdness, but it's that weirdness that has endeared Zappos to its customers.

A great example of this is one online chat that Hsieh includes word for word in the book. The chat took place between a customer service rep and a customer. This particular customer kept referring to himself in the third person, and insisted the rep do the same.

What'd the rep do? He not only referred to the customer in the third person, just as he'd asked, but he also began to refer to himself in the third person.

The entire chat is a hilarious, and illustrates just how comfortable the Zappos team is rolling with the punches and doing whatever it takes to make customers happy.

We also get an inside look at the Zappos training program. No matter what position a new recruit is hired for, they go through four weeks of training. This training includes Zappos History and Culture, Stress Management, Leadership Training, Human Resources one–oh–one, and much more. It's astonishing to see how much of an investment Zappos puts into its new hires.

Again, these last chapters will probably be the most useful for readers when it comes to offering some real solutions to common problems. By opening up the inner workings of Zappos, Hsieh gives us the tools we need to implement these creative solutions in our own organizations.

All in all, the book is an incredibly inspiring and motivational look at this unique company, and the charismatic CEO running it. Zappos is a company that appears to truly care about its team, and it definitely puts its money where its mouth is.

Is it worth your time to read? We think so. Yes, a lot of it is filled with Hsieh's personal life, and his struggle to get Zappos off the ground. But he's an entertaining and engaging writer. We were pulled along through the pages almost against our will at times. And there's no doubt there are some powerful lessons to be learned by the end.

"Delivering Happiness," by Tony Hsieh, is published by Business Plus.

That's the end of this episode of Book Insights. Click here to buy the book from Amazon. Thanks for listening.