Disclosure: We received two free advanced copies of Tony Hsieh’s (Zappos CEO) new book, Delivering Happiness. In return, we were asked if we could provide our own honest opinions of the book. What follows is exactly that.
As a supply chain professional, what are you focusing on everyday? Every week? Every month?
Let’s take a common metric found in your performance goals: “Reduce inventory by x percent.”
So in your first year, you drive inventory down by 20%. The following year you shave off another 20%. Then the third year, you shave off another 20%.
In this fantasy, at some point, you’ll have no inventory to reduce.
What do you do then?
(OK, before you math jocks email and remind me that by reducing inventory 20% each year, you actually never get to zero….stop. Yes, I realize that…but it’s our story, so just please play along.)
Working toward specific metrics is important of course. However, you can’t lose sight of what you’re trying to do as an organization.
Do you want your company to have the lowest inventory levels in the industry? Or do you want it to deliver the most preferred product or service available?
You could actually run an ultra successful company by having the most efficient operation in the industry. And indeed, in some low margin industries that’s the only way to thrive.
We can accept that.
Let’s Go Shoe Shopping
Now take Zappos.com. Simply put, they sell shoes online.
Don’t you need to fit shoes for size and for personal comfort? Who would buy shoes online? How much would you be able to sell?
As it turns out, quite a lot. Over a billion dollars a lot.
Well think about it. Most retail stores normally have gaps in their shoe selection. Why?
To carry a gapless selection, a store needs to have:
- all models
- in all colors
- in all whole and half sizes
- in all widths
- for each sport
- for each brand
And when you consider that it’s close to impossible to predict what model will sell hot on a given day, then it’s no wonder why you never seem to find the shoe you need in a store.
So, let’s storyboard this out shall we?
You go into a store looking for a certain model. Your feet aren’t too big, too small, nor too wide. Pretty average actually. But you like blue shoes. And today, well, they don’t have blue shoes. The store offers to order it for you and it’ll be available in 3-5 business days.
In this scenario, the store could actually be managing its inventory pretty well. It even developed a pseudo make-to-order system.
But you don’t care one bit about their inventory ninja skills. All you know is you don’t have the shoes you need. Does this store endear themselves to you?
Didn’t think so.
It’s Not About the Shoes
Well, Tony Hsieh and the Zappos team agree with you. So much so that they bet their houses on fixing this problem.
In the early years, it flirted with closing shop many times. Their turning point was when they explicity made customer service the singular focus of their company.
By the way, that’s customer service to customers as well as employees and suppliers.
A lot of companies say they’re all about customer service, but their actions often demonstrate otherwise.
Zappos offers free shipping both ways. They offer a 365 day return policy.
Often customers order several pairs to try them on in the comfort of their own home. After finding the perfect pair, they return the rest via the provided return labels.
Less stress and more satisfaction.
While a lot of companies outsource their customer service reps, Zappos does it in house. They decided that that was the only way to provide the high levels of service they aspired to.
Well, they quickly learned it wasn’t that easy to get customer service staff in San Francisco. What did they do? Oh, nothing drastic. They just relocated the entire company to Las Vegas where the job pool was more favorable.
Hard to say how things really are in Zappos, especially these days. They’ve grown so much that it’s hard to see how it can maintain its start-up culture across a large organization.
But they seem to be doing something right. Their customers love them.
Hsieh makes it clear in the book that Zappos never really saw itself in the online shoe retailing business, but in the business of delivering happiness.
And thus we get the title of the book.
He gets pretty heavy on Zappos’s core values. We can understand why he devotes so many pages to it. After all, that’s his main explanation for the company’s success.
It’s nice to read how this unconventional approach won the game for them. It’s both refreshing and inspiring.
That said, it does get redundant after a while. It’s not a big problem though since you can always skim through those parts and not miss the larger point.
The book itself is a light read. If you like learning about the back stories of successful start-ups, you’ll probably enjoy this.
Is it worth $13? I think so. (It was already in my Amazon.com Wish List even before we knew we would get advanced copies.)
You won’t get a blueprint for taking your start-up from zero to a billion dollars in revenue. However, you’ll get quite a few random nuggets of wisdom throughout the book.
My view is that if you get even just one learning out of a book, then it’s worth it.
You can get more background on the book and the Zappos tribe here.
If you’ve also read the book, do let us know what you thought of it.