At Zappos, Culture Pays (S+B)

Zappos began selling shoes and other products online in 1999, became profitable four years later (the beginning of a still-unbroken run of annual earnings gains) and reached more than US$1 billion in sales by 2009. That was a big year for Zappos in other ways as well. The company was rewarded with Business Week’s Customer Service Champ designation, inclusion on Fortune’s list of the 100 Best Companies to Work For, and an A+ rating by the Better Business Bureau. Also in 2009, Amazon purchased Zappos for 10 million Amazon shares, worth almost $928 million at the time. Zappos’ employees divvied up $40 million in cash and restricted stock and were given assurances that the Zappos management would remain in place.

At the top of the list of Zappos’ values is “Deliver WOW through service.” In fact, Zappos describes itself as a service company that happens to sell shoes and other products. This value is reflected in such niceties as a 365-day return policy with free shipping both ways, 24/7 customer phone lines, live online help, and customer product ratings — none of which is all that weird. But things do become, if not weirder, then at least different, when seen from the perspective of Aaron Magness, Zappos’ director of business development and brand marketing. He told me, “I read about how Zappos is focused on customer service. It isn’t. It’s focused on company culture, which leads to customer service. We don’t talk about customer service; we allow it to happen on its own by having the right people.”

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Filed under: Best practices, Century XXI Corporation, Culture, Leadership

Companies that Innovate Collectively (BW)

You can never predict who might have a good idea. That’s why companies are starting to enlist employees to make innovations both big and small, even if it’s not part of their job description. The idea of crowdsourcing—outsourcing a task to a group of people outside the company—has taken hold in the last few years. Some companies also turn to customers, suppliers, and the public at-large for innovative ideas. What about capitalizing on the knowledge of workers inside the company to solve problems or generate ideas?

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Filed under: Innovation, Innovation 2.0

Ten Signs of a Fear-Based Workplace (BW)

1. Appearances are everything. When employees are preoccupied with staying in the office later in the evening than the boss does, fear is king. When people worry less about the quality of their work than about how they’re perceived by managers higher up the chain, you’ve got fear.

2. Everyone one is talking about who’s rising and who’s falling. When a daily focus of office conversation is the discussion of whose stock is rising and whose is falling in the company’s internal stock index, you’ve got a fear infestation. A preoccupation with status and political capital is a sure sign that stakeholders’ best interests have taken a back seat to me-first, fear-based behaviors.

3. Distrust reigns. Would this be your knife in my back? When your employees have to stop and ask themselves, “Is it safe to tell Marybeth my idea?” you have a fear problem in your organization. Workplaces where people steal one another’s intellectual capital are places where trust is subordinate to fear (if trust exists at all). If your business is one where backstabbers thrive, ditto. In a healthier shop, people would be comfortable rising up in protest against a backstabbing colleague, and the paradigm “I win when you lose” would be quickly nipped in the bud.

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Filed under: Climate

Golden Age for Small Business (Open Forum)

“I think this is the best of all times to be a small business”, says Chris Anderson, editor-in-chief of Wired Magazine. Here, Anderson explains to Seth Godin the various benefits of the current economy.

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Filed under: Entrepreneurship, Small Business

7 Key Turning Points That Made Apple No. 1 (Wired)

iPad, 2010

Apple created a new device category when it unleashed the iPad in 2010: a tablet device that sits somewhere between a smartphone and computer. It wasn’t clear whether anyone really needed one of these things, but they were certainly attractive. The 9.7-inch touchscreen device runs the same intuitive operating system as the iPhone, making the iPad the first computer that Luddites and nerds can equally enjoy. While the jury’s still out on the tablet’s long-term viability, Apple has been selling 200,000 iPads each week, which is more than the number of Macs it sells in the same period.

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Filed under: Innovation

The 25 Most Innovative Companies 2010 (Business Week)

No. 15: Volkswagen

The German automaker showed off its green credentials at the Los Angeles auto show in December with its Up! Lite. The 70-mile-per-gallon, aluminum-and-carbon fiber car can cruise at up to 100 mph. Meantime, its Audi unit is gaining in the luxury-car market.

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Filed under: Innovation

Exploiting Chaos-and Celebrating Failure (BusinessWeek)

Posted by: Jessie Scanlon on September 08

In the run-up to President Obama’s speech to school children, NPR’s “Talk of the Nation” hosted a conversation with two high school principals. Both were clearly smart, empathetic, and hardworking. But my shoulders froze when I heard one of them say, “we don’t accept failure.” Where would we be if Thomas Edison, who failed one thousand times before he invented the lightbulb, had been told that failure is unacceptable?

The reality is that that principal isn’t alone in his thinking. Our educational system, our culture more broadly, and yes — most corporations — demonize failure. Yet the individuals and companies that have learned to expect failure and to learn from it, are often incredibly successful.

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Filed under: Innovation

How Whirlpool Puts New Ideas Through the Wringer (BusinessWeek)

In 1999, Whirlpool’s (WHR) then-Chief Executive David R. Whitwam set a goal: He wanted the leading maker of big-ticket appliances to be No. 1 in innovation as well. Whitwam’s pronouncement kicked off a flurry of ideas. Not all of them were sensible. “There were some wacky ones—bicycles, tennis shoes,” recalls Moises Norena, director of global innovation. Whirlpool needed a system to evaluate and screen ideas, advancing promising concepts and culling out those that were better forgotten.Today, the maker of such brands as Whirlpool, Maytag, and KitchenAid has formalized a process to sort through the thousands of ideas that, at any one time, are percolating up from product groups, new business development teams, and i-mentors—employees trained in innovation who have been deployed throughout the organization to identify promising ideas. From that first grab-bag of concepts, managers green-light several hundred for study, giving each a slice of an innovation budget that Norena ballparks at “several million dollars for North America” this year.

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Filed under: Innovation

Starbucks Tries Some “Lean Thinking”

Starbucks is working hard to re-invent itself. It is a necessary survival technique for the coffee giant.

They’re being attacked by competitors like McDonalds and Dunkin Donuts, and they’re being pummeled by the results of the economic downturn. The recession has resulted in a new thrift among consumers.

So, one of the ways Starbucks is fighting back is through the philosophy of “lean thinking”– a manufacturing philosophy perfected by the folks at Toyota, where efficiencies are examined and implemented with the goal of maintaining the delivery of a high quality product to consumers, at a cheaper cost of manpower.

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Filed under: Continous Improvement

Leadership lessons for hard times (McKinsey Quarterly)

During the current global recession, much attention has been devoted to the mistakes that sparked the financial and economic crisis, in hopes of not repeating them. Less has been given to what’s been done well amid the turmoil—to learn, for example, how best to lead a company through these tough times.

To contribute to that understanding, we interviewed the leaders of 14 major companies (see sidebar, “Who’s who”), all seasoned CEOs or chairmen, asking them to reflect on what they felt they had learned. We were keen not to limit their comments to the current recession and therefore also asked them to consider previous challenges they had faced in a turnaround or a crisis. The companies they lead are in different industries, face different challenges, and have performed quite differently. We are attempting neither to judge their performance nor to draw up a set of rules on how to lead through tough times. Instead, what emerges from the interviews is agreement on some broad principles that can help guide behavior in the executive suite and the boardroom, as well as interactions with employees, customers, and investors.

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Filed under: Leadership