Tony’s Leadership Style, Research Paper Example

When we analyze successful organizations such as IBM, Boeing, GE, Apple, Google, and Amazon, we cannot help but note the fact that these organizations are led by leaders who have proven themselves over the long term. In other words, organizational success also depends upon the effectiveness of the leadership provided by the individuals who lead these respective organizations. Effective leaders are those who can get all of their followers behind a common goal and understand what motivates and inspires their followers. One of such leaders is Tony Hsieh of Zappos who has been with the company since its early days and continue to lead it. Zappos phenomenal growth under Tony Hsieh demonstrates the fact that Hsieh’s leadership has helped effectively utilize Zappos core competencies.

Background

Tony Hsieh joined Zappos as an advisor and investor two months after the founding of the company in 1999 and joined it full time in 2000. Under Hsieh’s leadership, the company increased its revenues from only $1.6 million in 2000 to over $1 billion in 2008.

Hsieh started his career as a Software Engineer at Oracle before co-founding his first company LinkExchange, Inc. Later, Hsieh co-founded Venture Frogs, LLC. In addition to his responsibilities at Zappos, Hsieh is also currently the founder partner at VegasTechFund, General Manager of Venture Frogs, LLC, Director of Superior Air Charter LLC, and Director of Everyone.net, Inc.. Hsieh’s experiences at Zappos also influenced him in authoring a book titled Delivering Happiness (Bloomberg Businessweek).

Leadership Style and Philosophy

Tony Hsieh is a transformation leader who has inspired his followers to exhibit unwavering loyalty to the principles embedded in the company’s culture such as fun and unrivaled customer service. Hsieh has been successful in helping his followers realize their true potential which may be why Zappos’ core competencies include its human capital. Hsieh also employs democratic leadership principles (Cherry) as is evident by his emphasis on open communication between leaders and subordinates which has helped him gain admiration, trust, and loyalty of Zappos’ employees. Hsieh believes work should above everything be fun and if employees don’t enjoy their work and are not a good fit within the organizational culture, they do not belong at Zappos (Bryant, 2010). Hsieh has been known to create opportunities for fun not only at work but frequently invites Zappos employees to his home.

Hsieh understands that a leader’s actions have significant influence on the organizational culture and one of the major elements of Zappos’ culture is unrivaled customer service and integrity. In order to send a strong message, he decided to fulfill customer orders placed during a pricing glitch even at a loss of $1.6 million to the company (Smith, 2010). This example is a great explanation as to why everyone at Zappos lives the company culture. When a leader demonstrates commitment to the company’s mission and culture through practical examples, it not only helps build leader’s credibility but also strengthen employees’ commitment to organizational culture.

CEO’s Personal and Organizational Values

Tony Hsieh believes employees should have fun at work and he claims he wanted to leave LinkExchange because work had become extremely boring at LinkExchange (Bryant, 2010). Hsieh also believes companies should leave no stone unturned when it comes to taking care of their customers. At Zappos, customer service representatives are not expected to take as many calls as possible and make them as short as possible but instead spend as much time as it takes to fulfill and possibly exceed customers’ expectations (The Huffington Post, 2012). Hsieh also believes employees should be like family members because it improves their productivity and quality of work life (Bhasin, 2013). The company’s organizational values are probably best represented by its code of business conduct and ethics which has 10 values listed including providing WOW through service, embracing change, being fun, being adventurous and open-minded, willingness to learn and grow, open communication, family spirit at work, efficient resource utilization, being passionate, and being humble (Zappos, 2010). These values are embodied by Tony Hsieh himself and are an honest representative of Zappos organizational culture.

Ethical Behavior at Zappos

At Zappos, high ethical values are an integral part of company’s culture. Zappos’ willingness to fulfill orders during pricing glitch demonstrates that the company had the courage to take responsibility for its mistake. Zappos culture also places huge emphasis on open communication because it helps build a culture of honesty and trust. Zappos has been recognized for its ethical conduct by the Ethisphere Institute three times consecutively from 2009 to 2011 (Farfan). Zappos makes sure every employee understands the importance of ethics because ethics training is part of the company’s orientation process (Heathfield).

Tony Hsieh’s Strengths

Tony Hsieh’s greatest strength in his own words is being open-minded and curious (Open Forum, 2011). This means Hsieh is always striving to learn more and exposing himself to different opinions and perspectives. This quality helps Hsieh make higher quality decisions and also improves his working relationship with his subordinates. Hsieh’s other strength is open communication which is due to his democratic leadership style. Open communication means Hsieh is able to better understand his followers’ strengths and utilize them in the best possible manner. It also makes it easier for him to gain support for his decisions. Similarly, open communication ensures opportunities identified are quickly communicated to him and problems are dealt with on a priority basis. It also makes it easier for Hsieh to make difficult decisions such as laying off workers due to difficult economic climate (Twitchell, 2008).

Tony Hsieh’s third strength is integrity which doesn’t only increase employees’ loyalty to him but also bring significant positive publicity to the company. Even when Zappos laid off workers, it made sure they were treated fairly and the lay-off is as painless as possible. Integrity also means when Hsieh says something, his followers believe him and when he makes difficult decisions, his followers trust there must be legitimate reasons.

Tony Hsieh’s Weaknesses

Tony Hsieh’s one weakness may be too much emphasis on cultural elements such as having fun and personal relationships. While there is no denying these elements have helped the company build a loyal workforce, it also leads to precious waste of time resources. In addition, personal relationships may also mean employees would not always make tough but right decisions so as not to jeopardize their personal relationships. Tony Hsieh’s other weakness is focusing more on similarities than differences which may negatively affect organizational innovation and creativity. Hsieh emphasizes hiring people who have complementary personalities. People who have different personalities bring more to the table when it comes to ideas and perspectives and are more willing to challenge each others’ ideas.

Tony Hsieh’s third weakness is inefficient leadership style. While his democratic leadership style helps foster open communication and makes it easier to gain followers’ support, it is also inefficient because decisions take longer to make and as such, the company may respond to changes occurring in the external environment a bit slowly. Moreover, not all followers provide high quality input and in some cases, followers may not have the experience and knowledge to ensure that the decision reached through consent is of higher quality than what Tony Hsieh would have made by himself.

Tony Hsieh’s Most Valuable Quality

Tony Hsieh’s quality with the greatest impact on his success may be being open-minded and curious. This quality ensures Hsieh makes higher quality decisions and he continues to grow on personal level. It also helps him stay in touch with the external environment and respond to any changes in a timely fashion. As he is willing to learn from anyone and anywhere, his creative potential continues to improve over time.

Impact of Communication, Collaboration, Power, and Politics on Group Dynamics

Open communication and close collaboration among employees and between management and employees mean Zappos business model is mostly team-based where few if any departmental barriers to teamwork exist. Zappos doesn’t only exercise open communication and collaboration among employees but take the same approach towards every stakeholder including customers and suppliers. Tony Hsieh and a significant number of other Zappos employees blog and maintain Twitter pages where they invite comments and ideas from readers. Zappos doesn’t maintain a traditional relationship with suppliers like other companies but instead treat them as partners and share rewards and risks with them (Hsieh). Zappos organizational culture shuns bureaucracy and the politics that comes with it. All employees have access to all leaders including Hsieh. At Zappos, management and employees rely more on informal powers rather than formal powers to influence each other. Cultural elements such as open communication, trust, and relationship building create an ideal environment to exercise informal powers.

Works Cited

Bhasin, K. (2013, March 6). TONY HSIEH: Here’s Why I Don’t Want My Employees To Work From Home. Retrieved December 7, 2013, from http://www.businessinsider.com/tony-hsieh-work-from-home-zappos-2013-3

Bloomberg Businessweek. (n.d.). Tony Hsieh. Retrieved December 7, 2013, from http://investing.businessweek.com/research/stocks/private/person.asp?personId=92827&privcapId=23745

Bryant, A. (2010, January 9). On a Scale of 1 to 10, How Weird Are You? Retrieved December 7, 2013, from http://www.nytimes.com/2010/01/10/business/10corner.html?pagewanted=all&_r=0

Cherry, K. (n.d.). What Is Democratic Leadership? Retrieved December 7, 2013, from http://psychology.about.com/od/leadership/f/democratic-leadership.htm

Farfan, B. (n.d.). Most Ethical Retail Companies in the World 2013-2007 – Starbucks, Target, Gap. Retrieved December 7, 2013, from http://retailindustry.about.com/od/retailbestpractices/a/Worlds-Most-Ethical-Retail-Companies-2013-2007-Starbucks-Target-Gap-Ethisphere.htm

Heathfield, S. M. (n.d.). 20 Ways Zappos Reinforces Its Company Culture. Retrieved December 7, 2013, from http://humanresources.about.com/od/organizationalculture/a/how-zappos-reinforces-its-company-culture.htm

Hsieh, T. (n.d.). A Lesson from Zappos: Follow the Golden Rule. Retrieved December 7, 2013, from http://blogs.hbr.org/2010/06/a-lesson-from-zappos-follow-th/

Open Forum. (2011, June 13). https://www.openforum.com/articles/9-questions-tony-hsieh-zappos/. Retrieved December 7, 2013, from https://www.openforum.com/articles/9-questions-tony-hsieh-zappos/

Smith, J. (2010, May 24). Pricing error costs Zappos $1.6 Million. Retrieved December 7, 2013, from http://www.dailyfinance.com/2010/05/24/pricing-error-costs-zappos-1-6-million/

The Huffington Post. (2012, December 21). Zappos’ 10-Hour Long Customer Service Call Sets Record. Retrieved December 7, 2013, from http://www.huffingtonpost.com/2012/12/21/zappos-10-hour-call_n_2345467.html

Twitchell, J. (2008, November 6). Zappos.com laying off 8 percent of workers. Retrieved December 7, 2013, from http://www.lasvegassun.com/news/2008/nov/06/zapposcom-laying-8-percent-workers/

Zappos. (2010, May 1). zappos.com, INC. Code of Business Conduct and Ethics. Retrieved December 7, 2013, from http://www.zappos.com/c/code-of-conduct