Tony Hsieh, CEO of shoe retail giant Zappos.com, is a more current real-life example of authentic leadership. Hsieh joined Zappos after selling a company he co-founded to Microsoft at the age of 24, and was able to not only improve sales exponentially, but also to create a company culture that landed Zappos on the “Best Companies to Work For” list released by Fortune magazine each year (Delivering Happiness, 2013). Hsieh’s unconventional and passionate approach to organizational culture has set him apart as a leader in business, and he possesses several characteristics that exemplify authentic leadership.
Authentic leadership can be defined in multiple ways. The intrapersonal perspective of authentic leadership focuses on the leader and characteristics like self-concept, while the interpersonal perspective defines authentic leadership as a relational process created by leaders and followers (Northouse, 2012). Still another perspective, the developmental perspective, views authentic leadership as a process of nurturing between the leader and followers (Northouse, 2012).
Bill George developed an approach toward authentic leadership that examines the qualities and characteristics of authentic leaders rather than focusing on the actions of leaders in response to organizational problems (Northouse, 2012). The five basic characteristics identified by George, when examined in the context of Tony Hsieh’s leadership, paint a picture of effective authentic leadership in a company known as much for its cultures as for its product.
Authentic leaders understand their purpose (Northouse, 2012). Hsieh, from a young age, demonstrated an entrepreneurial spirit; he was only 24 years old when he became a millionaire after selling LinkExchange, which he had co-founded, to Microsoft in 1999 (Reiss, 2010). Zappos, as his new project, soared in sales from $1.6 million to over $1 billion in the first decade Hsieh was in the CEO spot (Reiss, 2010). More importantly, Hsieh has succeeded in his purpose of garnering the Zappos brand a reputation for superior customer service and culture (Reiss, 2010).
Authentic leaders have strong values about the right thing to do (Northouse, 2012). Hsieh’s customer-centric business approach has set Zappos apart from many other online retailers. Zappos offers free shipping and returns, as well as an accessible and effective customer service department (Reiss, 2010). The company culture he has developed also points to his concern for employees; Hsieh believes that happy employees make happy customers, and he strives to make both happen every day (Reiss, 2010).
Authentic leaders establish trusting relationships with others (Northouse, 2012). Hsieh’s business model for Zappos involves establishing positive customer relationships – customers know they can count on superior service from Zappos, which allows for a stress-free shopping experience. Within the company, Hsieh’s culture has centered on trust; Zappos employees are given many creative freedoms and enjoy a relaxed working environment because Hsieh feels that the bottom line is customer satisfaction. He trusts his employees to take care of his customers.
Authentic leaders demonstrate self-discipline and act on their values (Northouse, 2012). Hsieh, and by extension, Zappos, lives by the values he has established from the start. Everything he does comes from a place of wanting to do the best by Zappos customers and employees. Hsieh believes so strongly in Zappos that the company relies more on word of mouth than on more conventional advertising methods (Reiss, 2010). The hiring and selection processes used by Zappos remain true to the company’s values as well – candidates must demonstrate technical skill, cultural fit, and values that agree with Zappos’ 10 core values (Reiss, 2010). This model means that many good, technically-qualified candidates are passed over, even at the expense of profits, because cultural fit is so incredibly important (Reiss, 2010).
Authentic leaders are passionate about their mission (Northouse, 2012). Tony Hsieh has made customer satisfaction and company culture his missions, and he is passionate about both. He regularly states that money shouldn’t be a number-one goal, and that passion is what makes a business grow and succeed (Reiss, 2010). His book, Delivering Happiness: A Path to Profits, Passion, and Purpose, was written with the intention of spreading the message of using passion to find one’s purpose and turn a profit (Delivering Happiness, 2013).
Tony Hsieh’s brand of authentic leadership has made its mark on the business world, and those who would like to adopt a similar leadership approach will benefit from his example.
References:
Delivering Happiness. (2013). About the Author. Retrieved from Delivering Happiness: http://www.deliveringhappiness.com/about-us/about-the-author/
Northouse, P. G. (2012). Leadership: Theory and Practice (6th ed.). Thousand Oaks: SAGE Publications, Inc.
Reiss, R. (2010, July 1). Tony Hsieh On His Secrets Of Success. Forbes. Retrieved from http://www.forbes.com/2010/07/01/tony-hsieh-zappos-leadership-managing-interview.html
Grace Chuang says
Thanks for the interesting post! I really enjoyed reading it. The way that Hsieh was able to develop a vision for Zappos really demonstrates real leadership – the authentic leadership. It is actually nice to know about how a good authentic leader lead and run a organization. Hsieh was able to work with his workers to establish a common goal together. The workers seem very motivated and actually very enjoy working at Zappos. Therefore, the workers have high job satisfaction because they know what to do and what their boss expect to see. Knowing that the workers have high job satisfaction, it has already proven that Hsieh is a true leader or Zappos. He also focuses around his customers and ensures they are satisfied by offering free shipping and free returns. He establishes trust for the customers throughout the past few years with guaranteed satisfaction. Hsieh has his own business model that is different from other similar online shopping websites and that is what makes Zappos successful!
JACOB EDWARD TOOLE says
Great blog Jamie, you applied the ideas of authentic leadership very well. I wrote a blog this week about authentic leadership as well. In my blog I focused on Mahatma Gandhi as an authentic leader, who obviously is from a different time than Tony Hsieh. I found this entry to be quite refreshing and it was nice to read about how a current authentic leader operates.
I want to expand a little on Hsieh’s approach to organizational culture, and how he has been able to set himself apart from other companies. I am currently taking a psych class focused on work and motivation within the workplace. I find it highly interesting, and I would bet that Hsieh has been applying a lot of the principles discussed in this class to his own business. A big caveat to big organizational business is that it is often robotic and non stimulating. My guess is that Hsieh works with his employees to establish high job satisfaction. Bottom line is his employees enjoy working at Zappos. I think this goes a long way and shows how cultivating an appropriate culture within an organization can motivate employees to want to succeed. In every organization, there are two groups: the in-group and the out-group. Members of the in-group are employees who go above and beyond the call of duty. They work hard during office hours as well as staying late or coming in to work early if they need to. They work hard to improve the company as best as they can. On the other hand, members of the out-group usually have lower job satisfaction and organization commitment. They do the minimum required, leave as soon as they can, and forget about work when they are at home. Excuse that little tangent! I find work motivation a very interesting subject.
In a way, Hsieh is a modern Gandhi. Despite the fact that Gandhi did not fight for material possessions, he did understand his purpose, as well as following the values he had set for himself. Hsieh clearly has worked to not just make as much money as possible. His style of leadership is focused around his customers and ensuring that they are as satisfied as possible. By offering free shipping and returns, Hsieh has established a precedent of helping his clients first. This has proven to motivate other companies to do the same. I know that online shopping sites such as Bonobos and ASOS have similar return policies to Zappos, which shows that these two companies that came after Hsieh’s are following a business model that is different but has shown tremendous success. Hsieh has been able to establish a trusting relationship with his clients and clearly he has a passion for offering a service that can benefit both the consumer and the company.
JAMES GORDON LEUTHE says
I think you did an excellent job of connecting the authentic leadership approach developed by Bill George (2003) specifically the five basic characteristics: understanding their purpose, having strong values of the right thing to do, establishing trusting relationships with others, demonstrating self-discipline, and being passionate about their mission, with the behaviors exhibited by Tony Hsieh (Northouse, 2012). At its most basic level, authentic leadership hinges on whether leadership is genuine. The way that Hsieh was able to develop a vision for Zappos, which included an emphasis on customer service and the experience of his employees, and see it through demonstrates real leadership – authentic leadership. However, I believe his leadership can be looked at through another lens as well.
Servant leadership emphasizes that leaders be attentive to the needs of their followers, that they emphasize with their followers, and nurture them (Northouse, 2012). It begins with a focus on serving. When Hsieh was developing the vision for his company he began with a focus on serving others, specifically customers and employees, in a way that had never been done before (Reiss, 2010). He turned that idea into reality and created a company annually recognized as one of the “Best Places to Work”. This was achieved through his connection with his employees, and his ability to uncover and meet their needs. He also changed the industry for customers by eliminating shipping charges and making customer service easily accessible (Reiss, 2010). Again, his desire to serve first made him an industry-changing leader. I believe that Tony Hsieh is an authentic, servant leader.
James Leuthe
Reference:
Northouse, P. G. (2012). Leadership: Theory and Practice (6th ed.). Thousand Oaks: SAGE Publications, Inc.
Reiss, R. (2010, July 1). Tony Hsieh On His Secrets Of Success. Forbes. Retrieved from http://www.forbes.com/2010/07/01/tony-hsieh-zappos-leadership-managing-interview.html