Last post I wrote a little about Zappos, not so much as a company that we can hold up as a mirror to our small businesses, but as a larger company that still has things to teach small businesses.  Hopefully you agree that that is that case, for I want to continue looking at CEO Tony Hsieh’s book Delivering Happiness and look at a couple things the company did that are good lessons.

 

1. “Never outsource your core competency”
    

This is an idea that Hsieh returns to a few times throughout the book. Zappos hit one of its biggest early snags when it signed up with a warehousing company that did not live up to its promises. For a company whose service was shipping products to customers, this was an obvious huge issue.

No matter what your company does, you should be committed to doing something better than anyone else. Even if it isn’t a service for which you are the only provider, you can aim to be the best provider.

When you are the best, your company should grow to the point where you hire and/or contract help to take care of certain segments of your business. This is a good thing, but can quickly become a bad thing if the areas you loosen up on are the ones that are most important to your core services.

 

1. Open communication with employees
    

The warehouse issue wasn’t the only obstacle that Zappos overcame as a growing company. It went through many financial difficulties early as it needed a large amount of inventory to offer the services and goods it wanted; although the company was experiencing steady growth in its early years, it was not quite enough to lead to steady positive cash flow.

A line of credit alleviated those issues and got the company to where it wanted to be, but not before becoming a touch-and-go situation. It must have been a disconcerting time to work for Zappos, but the company was always open with its employees about what was going on. Hsieh includes multiple emails in his book that went out to Zappos’ workers, and they struck me as very open and gave those employees a level of knowledge that seems rare in big business.

Like many companies, there was also a time when Zappos had to let go of some employees. More open emails followed, as Hsieh believed that “rather than trying to spin the story as a ‘strategic restructuring’ as many other corporations were doing, we stuck by our core values and remained open and honest, not only with our employees, but with the press as well.”

This continued through to when Zappos was sold in an all-stock deal to Amazon. SEC rules required that the company couldn’t be completely open through the whole process, but it was as soon as it could. If you are open with your employees, it is easier for them to believe that you have their best interests in mind.