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5 Lessons From Zappos on Employee Happiness


By Will Schmidt

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Reading Time: 7 minutes

For the last seven years Zappos has made Fortune’s list of “100 Best Companies to Work For,” ranking 86 in 2015. Zappos CEO, Tony Hsieh (pronounced ‘Shay’), has been instrumental in sustaining this level of success. One of his secrets? A focus on employee happiness.

And for good reason—studies indicate that happy people are actually 12 percent more productive. Hsieh focuses so much on the happiness of his team and customers, he literally wrote a book on how to “make happiness your business model.”

Like Zappos, your organization can take steps to ensure your team stays motivated to achieve your mission. To help you infuse similar practices into your organization’s management, here are five of our favorite lessons your nonprofit can learn from Zappos.

Culture Rules Everything Around Me

Zappos’ focus on company culture is one of the reasons they’re so successful. Hsieh has spent years testing, refining, and reiterating their culture, which centers around Zappos’ core values:

  • Deliver “WOW” through service
  • Embrace and drive change
  • Create fun and a little weirdness
  • Be adventurous, creative, and open-minded
  • Pursue growth and learning
  • Build open and honest relationships with communication
  • Build a positive team and family spirit
  • Do more with less
  • Be passionate and determined
  • Be humble

In addition to ensuring they put their core values into practice, Hsieh has also built collision into Zappos’ culture, or what some call the serendipity of casual contact. He wants his employees constantly interacting—colliding—with one another as much as possible throughout their day.

For example, the sky bridge from the parking structure to the office is decommissioned. Employees instead have to walk through Zappos’ central courtyard, often colliding with others, before heading up to work.

Hsieh institutes practices like this because he believes good ideas, conversations, and connections stem from collision. The culture of collision grows Zappos into a company where new ideas flourish.

How to Apply this to Your Organization

Company culture is one of the strongest tools at your nonprofit’s disposal. That’s because it has the power to influence the behavior of your employees.

The first step to optimize your company culture is to define your nonprofit’s mission, values, ethics, expectations, and goals. Establishing these definitions is crucial, as they play a central role in attracting and retaining talent.

“Culture is critical to talent retention. When asked which elements of workplace commitment most benefit daily operations, companies ranked culture at 80 percent,” says the Harvard Business Review.

Prioritize talent that aligns to your culture, and your team is much more likely to feel happy and fulfilled in their work at your organization. This alignment can lead to higher employee retention, and an overall better reputation. That can ultimately translate to more fundraising power, more donations, and more community engagement.

The Customer is Always Right

Before Hsieh was ever in the news for renovating Downtown Las Vegas or living with llamas in an airstream trailer, he built one of the best customer service policies around. He understood that, as an online retailer, customer service would likely be the only person-to-person contact customers have with Zappos.

Zappos’ customer service wing has been called “insane and fanatical for the way it will do anything to please its customers,” but in a good way. Hsieh encourages his employees to always go above and beyond, and it’s clear they take the direction to heart. For example:

  • On average, a Zappos customer service rep answers 5,000 calls a month and 1,200 emails a week
  • There’s no limit on call time: the longest recorded Zappos call is 10 hours and 29 minutes
  • A customer service rep physically went to a rival shoe store to get a pair of shoes for a woman staying in Las Vegas when Zappos ran out of stock
  • Zappos overnighted a free pair of shoes to a best man who arrived at a wedding shoeless
  • Zappos sent flowers to a woman who ordered six different pairs of shoes because her feet were damaged by medical treatments

How to Apply This to Your Organization

Every donor deserves to feel like the largest backer of your cause. If your customer service isn’t up to par, they won’t feel the love.

When your nonprofit goes above and beyond to delight your supporters, you’ll develop a reputation for being genuine, thankful, and personable. These qualities help establish your rapport with community members and make them feel like part of your work.

As such, they’ll go to greater lengths to help you raise awareness and funds for your cause. Remember, your customer service is often a reinforcement of your first impression with your support base. Use it as an opportunity to build an emotional connection between your mission and your supporters.

Stay Loosey Goosey

Hsieh has always been a strong proponent of flexible thinking, and he’s bakes it into everything Zappos does. As a show of his flexibility, he recently decided to transition the management structure of Zappos from a traditional hierarchy to a holacracy.


This was a massive, company-wide undertaking that threw Zappos into upheaval. Everything Hsieh’s employees knew about hierarchical management was tossed out the window. On top of that, they had to decide if they even wanted to keep working for Zappos.

This shift was the ultimate exercise in flexibility. Everything changed almost overnight, the news blasted it as a bad business move, and employees left Zappos. At the same time, it showed Hsieh who the committed diehard employees were.

If he hadn’t been flexible in implementing a holacracy, it could have backfired with a mass exodus of employees and halted operations. However, giving employees the option to be flexible with all elements of their job led to faster-paced, more creative, and a happier Zappos.

How to Apply This to Your Organization

In the face of massive change, you have to remain flexible like Hsieh.

Life at your organization can change, quite radically, at the drop of a hat. Going through these changes with a rigid mindset could have a lasting, negative impact on your nonprofit. If you’re flexible, you’ll be able to face curveballs as they come and acquiesce to change relatively smoothly.

There are no set rules for how to be flexible, so optimize for it as you work. If you build this mindset into your culture across your teams, change won’t throw your operations off track—it will serve as an opportunity to pivot and get creative.

Don’t be Afraid to Dream Big

When Hsieh was first asked to join Zappos, he was incredibly skeptical and almost flat out declined the offer. However, Nick Swinmurn hooked Hsieh when he told him that footwear in the US was a $40 billion market.

No doubt, Hsieh saw massive financial opportunity with Zappos. He also realized that Zappos could be more than a simple shoe retailer. Zappos could enrich the lives of people in the community by literally delivering happiness.

Here’s a quick timeline of how Zappos grew in only 10 years:

  • 1999: First year of operations, Zappos brings in minimal sales
  • 2000: Zappos hits $1.6 million in revenue
  • 2001: Zappos quadruples that amount
  • 2004: Total sales reach $184 million
  • 2007: Gross sales total $840 million
  • 2008: $1 billion in sales
  • 2009: Amazon acquires Zappos for a reported $1.2 billion

In the midst of Zappos’ growth, Downtown Las Vegas (not to be confused with The Strip) was trending in the opposite direction. The area had been devastated by economic collapse, but Hsieh again saw an opportunity for success.

In 2013 he moved Zappos HQ into the Old Las Vegas City Hall in Downtown Vegas. Ever since he’s been revitalizing the Downtown area with investments in tech startups, bars, restaurants, parks, and housing.

Zappos is no longer just an online retailer. Zappos now plays a dominant role in the development and revitalization of a major city.

How to Apply this to Your Organization

Nonprofits, by nature, go up against larger than life goals. In those moments when you’re overwhelmed, look at the potential for success in an idea rather than its shortcomings.

Don’t be afraid to dream big, but like Hsieh, you have to have a plan. Build an attainable roadmap for your nonprofit and take each step one at a time. Voice your dreams and then write them down as SMART goals.

“Impossible” is a word that shouldn’t be in our vocabulary with the right amount of courage and planning. And remember: Rome wasn’t built in a day.

Put the “FUN” in Fundamentals

Fun is a word that a lot of people don’t associate with business, but making it a priority can yield incredibly positive results. In fact, fun has been a central pillar of Zappos since they first started. Internally, they foster employee happiness by encouraging creative and have fun work spaces:


Externally, Zappos constantly holds events to have fun and engage with the Downtown Vegas community. For example, during the 2014 holiday season they opened a Pop-Up Shop to provide customers with a creative shopping experience.

More recently, Zappos designed a new shoe box to inspire customers to “think outside the box.” Their new designs include an array of activities and inspiration to repurpose the box in fun ways.


And did we mention there are usually llamas at all Zappos events?

Hsieh with one of his llamas.

How to Apply this to Your Organization

There are countless positive results that come from building fun into your nonprofit. Chief among them is employee happiness. The happiness of your organization as a whole follows closely behind.

A focus on fun is also a great way to engage with your community of supporters and show them you care about them. Consider hosting a public event like Zappos does for Downtown Vegas. Maybe your nonprofit can even adopt its own “spirit animal,” like Hsieh’s llama.

If you can make the journey fun for everybody, you’ll drive more donations, fundraising, and commitment to your cause.


As you continue on your nonprofit journey, look to Zappos as a role model. Hsieh and his company didn’t just build an identity, they built a community fueled by a strong culture, fun, and big dreams. Zappos focused on delight, both internally and externally and became a force to be reckoned with.

Your nonprofit can also achieve success when it focuses on employee happiness. Remember to have fun with it!

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