Zappos CEO Shows Exactly Why “Doing Good Is Good Business”

Frank Hughes

Just after Zappos CEO Tony Hsieh was introduced by SAP senior director of partner communications Diane Pereira as the guest keynote speaker at the 2018 Global Partner Summit in Orlando, Hsieh popped up on stage wearing ripped jeans, a t-shirt, and a surprisingly tall and stiff Mohawk hair-do.

Hsieh (pronounced Shay) stood in stark contrast to the buttoned-down, international gathering of more than 2,000 SAP partners who attended the annual event and even more who watched the presentation remotely.

And yet, despite a different path to success in an altogether different industry, Hsieh shared a leadership vision that understands today’s business ethos – running a socially and culturally conscious business that is as responsible to its community as it is to its shareholders.

Just as SAP chief marketing officer Alicia Tillman opened the Summit with a message about Partnerships with Purpose – “It’s the impact of our technology AND the emotional connection we create with our customers that is truly our value proposition,” Tillman said – Hsieh echoed Tillman’s sentiments by retelling the amazing Zappos story.

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It started, of course, with selling shoes online. But Hsieh quickly realized that the lifeblood of his business was first implementing a positive corporate culture. That led to happy, engaged employees, which led to exceptional customer service – the reason Zappos relies more on word of mouth from its customers than more traditional advertising for growth.

“Whether it’s the product, or receiving the product when it’s delivered, or the customer service we delivered, we want our customers to remember the experience,” Hsieh said. “The shoes may wear out, but they will always remember that feeling they got from the experience.”

The numbers have proven out Hsieh’s management approach. From the time he joined Zappos in 1999, Zappos was sold to Amazon in 2009 for $1.2 billion, with the stipulation that it would operate independently of the online retailer. Just recently, Zappos eclipsed $1 billion in annual sales, expanding its offerings from shoes to clothing and accessories.

Hsieh did more, though. Not only did he transition Zappos to Las Vegas, he decided to integrate Zappos into the Vegas community. Zappos is not a corporate monolith that stands above the community, but is instead an integral part of the community that, like SAP, takes social responsibility seriously.

Hsieh shifted his presentation to his Downtown Project, in which he and Zappos made significant monetary and time contributions to revitalize the parts of Vegas not normally seen – which is to say, the neighborhoods surrounding The Strip.

From funding restaurants run by entrepreneurs who are passionate about their business and their community to investing in tech startups that are willing to relocate from Silicon Valley to Las Vegas, from turning run-down neighborhoods into vibrant communities where residents have daily “collisions” – Hsieh’s term for social interactions that help weave the web of community stability and growth – Hsieh, Zappos, and the Downtown Project have helped change the world in their own unique way.

Hsieh likes to tell the story of Roger Bannister’s inspirational four-minute mile, and how that feat seemed like an impossible accomplishment. Then, after Bannister became the first to break the four-minute mark in 1954, another man, Australia’s John Landy, ran another sub-four-minute mile.

“It wasn’t like nutrition suddenly improved,” Hsieh said. “It was that people suddenly believed it could be done.”

Hsieh urged those in attendance to carry the same belief, whether on a personal level, a professional level, or, as most people’s lives entail in this interconnected world, a combination of the two.

“A great brand,” Hsieh said, “is a story that never stops unfolding.”

For more on the tight integration between purpose and profits, read Elephants on the Balance Sheet.

Frank Hughes

About Frank Hughes

Frank Hughes is a contributing writer for SAP Global Partner Marketing. Hughes has been a contributing writer for multiple publications and has been a staff writer at The Washington Post, the Washington Times and the Tacoma News Tribune. He currently resides in Los Altos, CA.