Culture: Zappos and Tribes

As I mentioned in prior posts, I had a great time at an Anderson event last month where Tony Hsieh, CEO of Zappos, spoke to us as part of his Delivering Happiness book tour. I wondered why a big blue bus ("blue's the new yellow") was parked in front of UCLA, and I quickly learned about Hsieh's Happiness Tour during his talk.

He had written his book as a way to teach about Zappos' culture and mission of generally delivering happiness. It sounds hokey, and he acknowledged it, but his passion and belief in the importance of corporate culture was infectious (infectious enough to make me buy a signed copy of his book that night which I can't wait to read).

Tony's basic message was that corporate culture is everything in determining a company's success, not just a side element that's relegated to the HR department and which determines how much people like working there. He claimed that companies that have superior, more intact, and concretely defined cultures will almost always outperform those without. He explained that they hire and fire putting culture at an equal level as skill and work ethic and will fire talented employees if they don't fit into the culture.

He also encouraged the audience to request a free copy of Zappos' culture book, which is an annual collection of their employees' testaments to and personal experiences of the corporate culture. In addition, he offered us a free download of the audiobook Tribal Leadership, which backs up many of the lessons Tony was teaching that night with research studies.

I greatly enjoyed listening to the audio book over the last few weeks in my car (way more productive than listening to music, though I did intersperse some music here and there -- the radio is so much better if not listened to every day). I liked how the authors of the book compared companies at different stages of "tribal leadership" or corporate culture and showed through many vivid examples how companies can move from one stage to another.

The authors described 5 core stages of tribal leadership, where a tribe is a group of 2 to 120 people (but could grow beyond that) who align around some common goal or interest:

1. Stage 1: "Life sucks." People are pessimistic about life overall and see no way out of their misery. They are prone to crime and stealing and stop caring about any higher values. This represents about 3% of companies.
2. Stage 2: "My life sucks, but their lives don't." People think their lives suck but see others whose lives suck less than theirs. They may play tricks or be envious of others and generally do not have a lot of fun, but they do see a ray of light that they can at least try to work towards (in between feeling self-pity and remorse). This represents about 15% of companies.
3. Stage 3: "I'm great, but they're not." People work to improve themselves, see their talents, and aim to get ahead of others. This is the culture taught by schools and almost all business self-help books, teaching skills and aids and trying to help you become better than the person you are today so that you can get ahead and reach your goals (which others therefore can't reach). It is by definition a competitive culture, and one that focuses on individualistic results. It is made up of dyads, or two-person relationships, where two people can work together but contrast their skills and aim get ahead of each other. This represents about 70% of companies.
4. Stage 4: "We're great, but they're not." People work to fulfill a common, jointly agreed upon goal, and focus on group success rather than individual contribution. Olympic teams, top-performing team athletes, companies like Zappos and Amgen which are defined by their collegial corporate culture are examples. Here, the group aligns behind a common goal and a common enemy or competition. People work in tryads, networking between dyads and creating webs of support and insight that fuel growth much faster than simple dyads or individual contributors. This represents about 10% of companies.
5. Stage 5: "Life is great." People are happily working on goals that they believe in jointly without reference to other companies or competitors and simply because of their belief and optimism. This stage is often achieved fleetingly, held onto for short periods of time before coming back into Stage 4. Here, the growth rate is the fastest, with the most synergies, openness between people, and general positive attitude and happiness. This represents about 2% of companies.

(I sort of had to fudge the percentages above because I didn't remember them exactly, but those are approximately what the authors claimed from having researched thousands of companies.) I really liked this frame of mind, and I could see myself squarely as a Stage 3 operator most of the time (like most type A/overachieving personalities). I've felt what Stage 4 feels like at times, and I want to be involved in teams that can be operating at Stage 4 more often.

The book also describes the "epiphany" that brings one from Stage 3 to Stage 4: realizing that meaningful results cannot be achieved alone or through micro-management, and it is through teamwork and leveraging other people that large impact can be made.

I'd love to speak to people firsthand (other than Tony and Tribal Leadership's authors) about personal experiences of the different stages and what worked for them and their group in transitioning from one to the other. This seems like the crucial thing to understand and probably a skill gained more through experience than simply reading about it.