Oct 6, 2015

Dream workplace or scary cult?

Emma Reynolds
October 6, 2015

Tony Hsieh has introduced an experimental workplace. Picture: Zappos
Tony Hsieh has introduced an experimental
 workplace. Picture: Zappos
IT’S the coolest company in the world right now, where the casual start-up vibe popularised by the likes of Google is taken to the next level.

Online retailer Zappos is making ping-pong tables, nap rooms and scooters look terrifically old-fashioned, instilling a festival-style atmosphere with loud music, impromptu jam sessions around a fire pit and a fridge full of beers.

In March, CEO Tony Hsieh, who lives in an on-site trailer, made headlines across the world when he announced that all bosses would be eliminated. Instead, there would be no hierarchy, and staff would act like entrepreneurs, with dynamic roles rather than “jobs”.

Managers would keep their salaries for at least a year, he wrote in an email to his 1500 staff, but not their responsibilities. If they weren’t keen, they could take a generous redundancy package.
But is this office as dreamy as it sounds?

Hsieh joined Zappos as CEO in 2000, moving the clothing retailer from San Francisco to Las Vegas in 2004. He invested $350 million of his own money to establish an urban space called the Downtown Project in a derelict area of the city that badly needed regeneration, installing a geodesic dome and fire-breathing praying mantis from Burning Man festival.

Delivering Happiness
Delivering Happiness
Employees with roles like “fun-gineer” gather in a courtyard each evening to cook or perform music for each other. Severed ties are pinned to the mural-covered walls in a fierce rejection of corporate tradition, and jeans-clad staff regularly high-five and hug.

Hsieh, author of a memoir called Delivering Happiness, says he believes in “work-life integration” rather than work-life balance.

After an induction program that lasts several weeks, new starters can choose not to join the company and walk away with $3000. If they stay, there’s a generous benefits packages plus on-site haircuts, laundry pick-up and delivery, car washes and oil changes.

This progressive ethos has been a huge success. Zappos has annual sales of more than $1 billion and was acquired by Amazon for an estimated $800 million in 2009.

If you’re thinking that a hip, progressive company teaming up with the disgraced villain of the corporate world sounds strange, you’d be right. It’s not the only anomaly in the Vegas retailer’s party image, as a profile by New Republic revealed this week.

Now there are no bosses, some employees say no one wants to make a decision any more. With staff encouraged to “choose their own career adventure”, there’s no clear avenue for progression and promotion.

Wages are tied to a confusing system of “badges” and “people points”, where staff have to figure out their worth, design their own badges and the accomplishments that they represent, and — with no line manager — gain the CEO’s direct approval for any pay rise.

It’s not the only confusing element of working at Zappos. Hsieh has brought in a highly efficient but inflexible method of running meetings, which operates along a strict script, recording all decisions and action plans in a database. Staff who aren’t meeting their goals are taken out of their roles and sent to the “beach” — a no-man’s land that’s one step away from being fired, where some say they are shunned as pariahs by their uncertain colleagues.

One employee said they distrusted the culture of enforced positivity. Others believe Hsieh is creating change for the sake of it, moving too fast and making people lower down the chain feel insecure about their jobs.

When the March email went round, many were bemused and upset, either leaving or remaining in a job where they didn’t understand their role. To some, the firm had become cult-like, with “Zappolonians” quoting from a management consultancy book that Hsieh has told everyone to read.

The firm’s website speaks of “higher purpose” to do good for the community, providing clear instructions for how other companies can follow its lead. There’s coaching on self-empowerment, building a positive team and family spirit, with three-day “culture camps” for $8500 or $3000 for a day at the School of WOW.

Like at Amazon, where staff spoke of being expected to answer emails through the night, Zappolonians are never off-the-clock, attending meetings at 10pm on a Sunday, because there’s no longer a work-life divide.

Can this company sustain Hsieh’s idealistic vision of corporate reform? Or is the happy, high-energy image all smoke and mirrors?

As the company’s customer-facing website is gradually transferred on to Amazon’s system, things will either come crashing down or the world will see the benefit of progressive working.

In the meantime, the so-called “monkeys” and “ninjas” at Zappos will grab another taco from the on-site food truck, cuddle a stray soft toy and try to make sense of this brave new world.

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