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Junleong: What are the most important management skills Tony Hsieh practices in successfully leading his team at Zappos? The very first significant management skill that Tony Hsieh practices is his conceptual skills. Having conceptual skills means that Tony is able to see the ‘big picture’ by analyzing and interpreting information. When Tony started serving as the co-CEO of Zappos, he understood that in order to stand out among their competitors, the company cannot focus solely on shoes and profit. His conceptual skill has allowed him to look at a bigger picture and shift his focus to Zappos’ famed corporate culture and employee happiness. In Boone and Kurtz’s book, Tony Hsieh has shown exceptional conceptual skill that has helped Zappos in growing their sales to more than $1 billion annually. Furthermore, Zappos also has won numerous accolades under Tony Hsieh for his efforts in making the company an excellent place to work. Moreover, Tony Hsieh also helped engineer the sale of Zappos to Amazon in a deal worth $1.2 billion. (Boone & Kurtz, 2006) From an online shoe retailer that does not concentrate on shoes alone, these have shown that Tony Hsieh is able to ‘look at the big picture’ and conceptualize the future of the company. Furthermore, from the case study, we can also learn that Tony Hsieh is having extraordinary communication and human relation skills. The way how Tony Hsieh is conveying his messages and ideas to his company and colleague and it has shown us that Tony has very effective communication skills and interpersonal skills. In the early years in Zappos, Tony Hsieh is instilled his unusual vision to the company. It would have been very difficult for anyone in the world to accept and learn his vision without effective communication and interpersonal skills possessed by Tony Hsieh. Tony Hsieh has overcome the barrier of communication and successfully instilled, encouraged, and exercised his vision together with the company. There are examples that could show that Tony is practicing Zappos core values to build open and honest relationship with communication. In order to connect with employees, he encourages them to socialize outside of work. Furthermore, Tony also uses social media as one of the medium to connect with his employees and customers. The transparency of social media has allowed Tony to express and connect to his employees and customers closer. Then, right after Zappos was acquired by Amazon, Tony drafted and sent out a personal email to each and every employee in the company to announce the news. Tony has shown incomparable communication and interpersonal skills in managing Zappos. Other than that, we can observe that Tony Hsieh is also practicing great leadership skills. As mentioned in an article in Harvard Business Review, the most effective managers are also effective coaches. Effective managers use their conversation as an opportunity to exert a strong influence, make recommendations, and provide unambiguous direction. They take a step back and try to draw out the views of their talented and experience staff. (Zenger, 2014) We can see that Tony Hsieh is very much willing to listen to his employee. He asked and compiled a list of their employee thoughts on what the Zappos culture meant to them. The lists then were made into a culture book which was shared both internally and externally. According to another article, it is stated that encouraging others to share their unvarnished views on important issues, delegating and sharing leadership, assigning managerial tasks, communicating frequently and allowing for mistakes to serve as a learning opportunity can empower employees and develop them into independent thinkers who are not afraid to take risks and actively contribute in moving the organization forward. (Monarth, 2014) This empowerment is being practiced by Tony which eventually led to his popular leadership amongst the business world.
References

Boone, L. E., & Kurtz, D. L. (2005). Contemporary business 2006. Princeton, N.J: Recording for the Blind & Dyslexic.
Monarth, H. (2014). Make Your Team Feel Powerful. Harvard Business Review, 1-8.
Zenger, J. (2014). Finding the Balance between Coaching and Managing. Harvard Business Review, 1-9.

Ralph: Q2. In 2011, Zappos won the J.D. Power Award for its excellence in delivering customer service. How has Zappos achieved such high levels of satisfaction in customer services?

Jia: Q3. What constitutes an organizational culture and discuss the factors that influence Zappos organizational culture. Explain its key components.

Ruabiyat: Q4. Discuss the importance of the interrelationships between Tony Hsieh’s personality and the employees’ personality and values in designing Zappos’ organizational culture.

Rafi: Q5. If Tony Hsieh leaves the organization, will Zappos be able to sustain its winning culture

Up to this point, one could not deny the significance role of a CEO has in an organization due to the heavy and critical responsibilities delegated to them. It is also widely regarded that a success of an organization aligns closely with the personality of the CEO. For instance, Hambrick and Mason (1984) through their studies reported that an organization’s strategies correlate closely with its CEO’s characteristics whereby Nadkarni & Herrmann (2010) added-on that a CEO’s strategic decision processes and consistent actions have notable implications on the performance of an organization. Looking back into our case study, the role of Tony Hsieh has played in contributing to Zappos’ success by instilling the winning cultures and aspiring personalities into the Company are commendable and these prompted the market to ask – Can Zappos maintain the winning attitude if Tony Hsieh leaves one day?
If one could recall, Tony, together with few of Zappos’ key personnel i.e. Fred Mossler and Jon Field being the Senior Vice President and Development Director respectively, have been with the Company for more than a decade. They are one of the notable pioneers in Zappos whom crafted the structure and aligned the Company’s direction to where it is today. Along the way, they champion the customer service business by instilling the ‘family’ culture and winning mentality into the organization. Being the head honcho for Zappos, there are no doubts that the organization (to a certain extent) would be negatively affected by the departure of its charismatic CEO – if ever it happened.
Nevertheless, that is not always the case. Let’s look at Apple Inc for an example: while the market can say anything they want on Tim Cook (as can be seen in Figure 1 which shows the acute hick-up response towards the end of August 2011 when the news of Tim succeeding Steve Jobs appeared), yet the company still able to produce some fairly impressive results for the past three years (2011-2013) with an average annual growth rate of 40% in its revenue.

Figure 1: Market & investors’ response towards the appointment of Tim Cook as the CEO of Apple Inc in August 2011. Source from: Bloomberg We can also look at one of the examples in our home soil namely the rumors of the resignation of charismatic and outspoken CEO of S P Setia Berhad (SP Setia) i.e. Tan Sri Liew Kee Sin back in 2011. SP Setia is one of the leading and perhaps the most successful property developer in Malaysia and when the news of the country largest investment fund i.e. Permodalan Nasional Berhad (PNB) served a mandatory general offer (MGO) at the end of September 2011 to take over the former erupted, market viewed the move negatively. As we can see in Figure 2, SP Setia’s share price dropped acutely when the news appeared. The perception of market can be further proven by the sharp increase in the share price when both PNB and SP Setia came out a few days later to clear the air by announcing that Tan Sri Liew will still be the CEO until 2015 and that both parties will honor the takeover appropriately.

Figure 2: Market and investors’ response towards the takeover intention by
PNB on SP Setia ‘s share price in September 2011. Source from: Bloomberg

With the examples above in mind, coupled with the facts that Zappos is as an established brand and the exiting strong cultures laid-out by Tony and his team, although the departure of Tony Hsieh is viewed less favorably, the company will most likely able to continue its excel even if Tony decides to leave one day.
References
Hambrick, D. C., &. Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9: 193–206.
Nadkarni, S., & Herrmann, P. (2010). CEO Personality, strategic flexibility, and firm performance: the case of the Indian business process outsourcing industry. Academy of Management Journal, 53(5), 1050-1073.