Emotional happiness is the ultimate currency for the human being, and ethics is the path to the good life. For a person, this means happiness; for a business, this means profits. It seems that an effective path to a sustainable business in the modern competitive marketplace is through win-win-win behavior, and Delivering Happiness by Tony Hsieh provides an excellent recipe. Tony Hsieh is the CEO of the awesome online shoe store Zappos.com, which was sold to Amazon.com in 2009 for over $887 mm, and the book is one-part Tony Hsieh biography, one-part Zappos cultural record, one-part philosophy of happiness, one-part philosophy of corporate excellence. The book is excellent. I learned a lot of random things.

When Tony is talking about his personal history, he discusses his love for techno music, and it really resonated with me. Not because I like techno music – not really at all – but because he says that one of the most pleasurable feelings a human can have is to be in synchrony with the environment. With techno raves, as opposed to a club where one dances to be seen (and engage in all sorts of devious ulterior game-related motives), people dance to be together in a tribe; the DJ channels energy, and they move with it. Judgment is suspended. I thought that was nice. This is a metaphor setting the tone for the rest of the book: with Zappos, Tony and his team created a unified tribe.

I loved Tony’s take on business networking events. You know what I’m talking about – you bring a stack of business cards, you mingle, you exchange business cards with other people, trying to figure out how to engage in a profitable win-win business relationship. I really respected his sentiments on these sorts of events: he loathes them.

How often have you gone to a networking event and met someone with whom you really connected? I don’t think it has EVER happened to me. I have hundreds of cards that I’ve received from people, and all they do is take up space on my desk, waiting for me to take the initiative to throw them out. It’s not like everyone I’ve met at such events sucks – not the case at all – it’s just that I’ve rarely bridged a new acquaintance from one of these events to an enduring and successful enjoyable long-term business relationship.

Tony says that he prefers to cultivate friendships. He wants to do business with friends. And I am totally with him. In fact, I hate doing business with people with whom I wouldn’t socialize outside of the business arena. It feels forced and awkward. He says that by making friends, he makes a long term investment and indirectly accrues benefits from his extended social network. People do lots of things in the name of friendship that they wouldn’t in the name of a win-win business relationship.

Aristotle writes about this in the Nicomachean Ethics; he says that there are friendships of pleasure and friendships of utility, and there are friendships of the good. These friendships of the good are the highest and best sorts of friendships, and they are based on shared ethics – shared values. From personal experience, I can say that my best business relationships, and my most successful personal friendships, have all been based on shared values. Otherwise the friendship is corrupted, untrue, and easily destroyed when circumstances inevitably get shaky.

So, speaking of values, the book talks a LOT about Zappos’s culture and values, which Tony believes to be the most important factor in the company’s success. He learned from his first company, LinkExchange, that money and growth can readily corrupt an organizations, so he figured the way to ensure lasting success was to build a strong cultural imprint. While I could go on at length about Zappos’s culture and their ten core values, listed below, I would only like to go into detail about a few of them: the ones that personally resonated with me the most.

So I will especially elaborate on #1 and #2.

#1. Deliver WOW Through Service

After listing each value, Tony provides an extended description of the value, and an example of an employee’s embodiment of the value, which I truly loved and appreciated. As reader Dave Doolin has commented, “Theory is good. Practice is better. And harder. Way, way harder.” The concept behind Deliver WOW Through Service is easy enough to understand: surprise your customers and vendors with awesomely above-average results (for example, automatic upgrades to overnight delivery). Tony’s description of the principle exemplified, however, moved me to tears.

An employee describes how she decided to perform a random act of kindness for someone in line at a convenience store, paying for the items of a person in the checkout line behind her. When the customer was befuddled (most people have ulterior motives, why would someone be so nice?), she explained that it was not a random act of kindness, but rather a random act of “wow”-ness, and that it was part of her company’s DNA to act sweetly. This really moved me. The cashier, not even the direct recipient of the generosity, was so moved by this that she wrote down the Zappo’s name as well as the name of the awesome employee.

Tony believes that culture is the best form of PR. When your culture is strong, the positive externalities and good karma will eventually pay dividends over time. Actions speak louder than words, and the company, through the psychological principle of association, gets the opportunity to claim credit for all great actions of its employees. Zappos works hard to ensure that each experience a customer has with Zappos.com is a positive one. Therefore, customers will begin to associate happiness with Zappos, and Zappos further succeeds in delivering happiness. Emotionally anchored memories are more readily retrieved.

#2. Embrace and Drive Change

The great example of this principle in action was through a company-wide initiative encouraging daily 1% improvement. This results in annual improvements of 37x: 1.01^365 is approximately 37. In the book, it was illustrated through the principle of compound interest. But I immediately thought of how I could apply it to my personal life. What if I improved my diet by 1% every day? What if I increased by exercise weight by 1% daily? Unfortunately, I do not often work with such discrete units, but I recently started adding this jumprope to my morning basketball drills. I think increasing # of reps by 1% daily will make it very easy for me to improve my skip volume.

I think all of Zappos’s values are excellent – I myself would probably do well to align my actions with many of them. Of course, not all of them are appropriate for every business. But Patrick McKenzie of BingoCardCreator.com has famously embraced principle #6 and it doesn’t seem to have backfired on him. Of course, these values operate even better with synergy, too. I think they might have even been purposely calculated to mix well.

Random tidbit: another big lesson I learned was to never outsource your company’s core competency.

Finally, I would like to elaborate on one of the philosophies of happiness Tony presents. He says that if employees perceive control of their work life (remember, control is the opposite of learned helplessness, aka depression), they will be happy. This means they feel they are progressing in their careers, feel a sense of connectedness and belonging, and feel like their work has real meaning, contributing to a greater cause. It seems to have worked for them: Zappos has been consecutively voted one of FORTUNE Magazine’s Top 100 Employers to Work For. So how did they practically implement these high-level principles?

In order to make employees feel like they are progressing in their careers, they divided up major promotions into a series of mini-promotions that occur every six months. This is the application of the theory that I presented in this article on the psychology of what makes games fun! Things become game-like and therefore FUN when people have a sense of progressing toward predefined goals.

In order to foster a sense of connection and belonging, Zappos engages in a variety of tactics to make sure that coworkers get to know and like one another. Besides making sure that they only hire people whose personalities fit well within the company culture, and quizzing employees on how well they know their coworkers, they also make sure that the exits to each building are out of the way, forcing everyone to walk through common areas. This strategy worked famously well at Pixar, promoting interdepartmental cross-pollination, and the exact opposite of this strategy was the reason for the failure of my college dormitory: you weren’t forced to go through a common area and you weren’t forced to interact with anyone. Ah well, let’s try to stay positive and learn from the lessons of the successful.

And of course, the Zappos mission is to deliver happiness. What greater cause could there be than that?

The book concludes with an epigram attributed to Buddha:

Thousands of candles can be lighted from a single candle,
and the life of the candle will not be shortened.
Happiness never decreases by being shared.

What a great sentiment. Trade creates wealth. In order for you or your business to succeed, it’s really not necessary for others to fail. Embrace some of the open and positive standards exemplified by Zappos and you and your business can flourish.

(In case it wasn’t obvious, I completely endorse Delivering Happiness. You can get it on Amazon here.)

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