Company Success: Culture

Companies must succeed on many levels to have a viable future. Customers must be acquired (marketing), products or services must be sold and delivered (sales & operations), and cash flow must eventually be positive (finances).  But do the employees want to be there? Are they providing maximum value to the company? Company culture is an important part of company success.

Employees need to both provide value  and feel valued in order for the company to succeed.

According to self determination theory, the psychological needs of a person affect a person’s intrinsic motivation and as a result, their growth. As an entrepreneur, you want your employees to be self motivated to benefit your company. Specifically, these psychological needs are competence, relatedness, and autonomy.

Competence: Employees feel that they do their jobs well.

Relatedness: Employees feel connected to each other (and possibly to a larger purpose). Employees feel connected to their families and friends.

Autonomy: Employees feel as if they control their life, as well as the work they do and how they do it.

In companies known for their company culture, these ideas emerge as important components.

For example,  at Zynga, an online social games provider, the company provides massages and  weekly keg parties.  But people also have responsibility over their own work. Mark Pincus, CEO, tells the story in a New York Times article of smart receptionist who realized the phone system needed to completely overhauled.  Pincus told her, “I don’t want to hear about it. Just buy it. Go figure it out.”  The receptionist eventually ended up running the whole office.  To Pincus, this has evolved into asking every employee, “What are you C.E.O. of?”  This efficiently delegates responsibilities and motivates employees.

This autonomy on the job not only motivates employees, it’s also an effective management strategy.  C.E.O.s have limited time.  As Pincus wrote, “You can manage 50 people through the strength of your personality and lack of sleep. You can touch them all in a week and make sure they’re all pointed in the right direction. By 150, it’s clear that that’s not going to scale, and you’ve got to find some way to keep everybody going in productive directions when you’re not in the room.”

At Zynga, employees have a sense of relatedness and autonomy through the company culture. And Zynga is flourishing. As maker of the popular Facebook games like Farmville, Zynga dominates the social online gaming network with access to more than 100 million unique visitors per month in September of 2009.

Zappos.com is a company that is defined by its culture. Zappos provides shoes, clothing, and even electronics around the world with a 365 day return policy, with free shipping both ways.  Tony Hsieh, CEO, believes that your culture is your brand – and for Zappos, that culture is customer service.  In Hsieh’s words, “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 its own. ”

All hires go through two interviews, a competency interview and a culture interview. Every person in the company goes through four weeks of customer service training – two weeks of lecture, two weeks answering customer calls. Call center employees are told to give the best customer experience, even it means talking with a customer for two hours. The company aims to be transparent and personable through Twitter. Tony Hsieh uses Twitter prolifically. So do other Zappos employees. The goal is for customers to feel a personable connection to the company, and for employees to connect and support each other.

Other culture quirks? Happy hours, fully covered health insurance, profit sharing, and a full time life coach. In order to visit the life coach, you have to sit on a red velvet throne. Managers are asked to spend 10 to 20% of their time with employees out of the office.

Zappos is profitable, and continues to be so. Alfred Lin, chairmen, COO, and CFO of Zappos.com fully supports all these areas of company culture.  Extreme customer service brings repeat customers – 75% of sales. The life coach helps call center employees provide great service. According to Lin. “You can’t provide great service if you’re upset about something in your life.”

Zappos provides a unique experience for both its employees and its customers through its company culture. As of July 21, 2009, Amazon.com acquired Zappos.com for about $850 million dollars. Major factors? Zappos.com has a unique culture, great people, and potential for huge growth.

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