10 Lessons on Culture That Every Managing Partner Can Learn from Zappos.com

Zappos.com Culture
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It’s been almost ten years since I started A.Y. Strauss, LLC – a boutique law firm with today a team of approximately 20 professionals. We have made many mistakes along the way and overcome many obstacles – and still have a long way to go. Along the journey, I’ve come to realize that the special ingredient to really drive growth in a firm is culture. In the famous words of management consultant Peter Drucker: “Culture eats strategy for breakfast.” But what exactly is culture anyway? How is culture developed, defined and leveraged for success?

I was incredibly impacted by Tony Hsieh’s book, Delivering Happiness: A Path to Profits, Passion, and Purpose, and his views on culture development. Tony sold his first company after the culture deteriorated and it no longer left him feeling energized or inspired. After initially serving as an early stage investor, Tony ultimately assumed the reigns as CEO of Zappos.com and grew it into a thriving multibillion-dollar company leveraging culture as a key driver of the business.



Here are ten lessons on culture to learn from Tony’s experiences.

1. Despite common thinking, it’s not only about the money.

Tony Hsieh left a thriving business where he was achieving success because he wanted more out of his professional life. Money alone wasn’t enough. Of course, we all show up to work to support ourselves and our families – but the way we feel every day interacting with our team, clients and vendors is what creates the missing link to retain talent and grow the business. When your firm treats people respectfully and values their input – creating a feeling of mutual support, safety and respect – this engenders loyalty to the organization and a deeper sense of connection to the team itself.

2. Balance Humility and Confidence.

Your team should be confident in their abilities and the value they can offer to others, and that confidence should shine through—but not to the point of self-righteousness. Be authentically human. Tony says it perfectly: “While we celebrate our individual and team successes, we are not arrogant, nor do we treat others differently from how we would want to be treated. Instead, we carry ourselves with quiet confidence, because we believe that in the long run, our character will speak for itself.”


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3. Be Unique.

Your firm is an organic entity—and it is yours alone. Don’t try to be like everyone else. Do your own thing. Look at what will make your firm successful based on what your unique team of individuals brings to the table. Celebrate the uniqueness of every person in your organization and the uniqueness of the culture only your team is able to form.

4. Deepen Connectedness.

When you foster an environment of generosity, gratitude and genuine caring, you create a feeling of connectedness. Meaningful connectedness leads to happiness and optimism, which permeates every corner of your organization and beyond. Connectedness creates a sense of security, excitement and purpose among your team who feed off each other’s energy to serve a greater purpose.

5. Relationship-building breeds long-term success.

It’s easy to focus strictly on increasing margins and cutting costs – but you also need to invest in common sense long-term relationship building. Zappos decided early on not to charge for shipping costs of returned items – making it extra easy to do business with them despite the added expense. Instead of a cost line item, Zappos viewed free shipping as a marketing expense. As another example, while other companies tend to make it hard to reach customer service and decrease the amount of time spent on the phone with customers to reduce overhead – Zappos flipped the script entirely by having internal competitions of which customer service representatives could have the longest possible calls with customers, viewing the cost as an investment in the customer relationship.

Having a company that values long-term customer relationships in turn makes it easier to build a supportive culture – since your team can align with those values and be more at ease and feel safe to make decisions to achieve those goals. As Tony says “[if] something creates a great customer experience, we choose to do it, because we believe that in the long run, little things that keep the customer in mind will end up paying huge dividends.”


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6. Life doesn’t wait for business.

Business doesn’t wait for life. There’s been much written on work/life balance in recent years, but what does that mean, anyway? It’s more than giving your team the flexibility to work remotely or offering ample vacation time. It’s about understanding and embracing the multi-dimensional make up of each person’s life. Create a workplace that values those dimensions, inside and outside of work, and you’ll find that you have a team that is loyal and happy. Meaningful balance leads to happiness. Happiness strengthens culture. The cycle of success continues.

7. Align your team to the same mission.

Perhaps you don’t know what that is today, and that’s fine. But by bringing your team together to create a joint mission—one that everyone contributes to and is invested in— they will be energized in knowing they’re part of a greater purpose. The collective energy and unity will shine through to the customer experience and ultimately drive revenue. As Tony says, culture and brand are just two sides of the same coin – the brand is just a lagging indicator of a company’s culture.

8. If you don’t continue to invest in your people, culture stagnates.

In order to build a strong, sustainable business and deliver excellence to your customers, an investment in your own people is absolutely critical. Sadly, many firms don’t see it this way—as it can be difficult to measure certain intangibles. When you invest in your team, you deepen the culture and your clients benefit from a more positive and consistent experience.

9. Be a servant to your team.

The idea of being a “servant leader,” although counter-intuitive, is gaining more traction in books on leadership. True leaders understand that to successfully build culture, and ultimately have your team reach the highest levels of performance – you need to offer support and guidance to help others grow. Be a coach, not a manager. When you help your people achieve greatness, they will help you achieve greatness.

10. Culture creates long-term value but must be protected.

Tony grew Zappos.com by understanding that one of the only things you cannot copy from a company is the culture. Zappos.com famously pays new trainees $2,000 to quit after the first week of training if they cannot align with company values. Maintaining and building culture often requires great discipline to reject otherwise talented people during the hiring process that do not align with company culture. The best team members have a positive influence on one another and create harmony in an organization. You must be patient to hire the right people and prioritize culture – as you are making a mission-critical investment in your firm’s long-term success.

Aaron Y. Strauss

Aaron Y. Strauss is one of the leading legal advisors in the commercial real estate industry, providing insight and guidance for billions worth of transactions during his career. As our firm’s founder and managing partner, he has positioned A.Y. Strauss as one of the region’s most respected law firms for commercial real estate owners, lenders and sponsors, serving the needs of our clients with the utmost in care, integrity and transparency.

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