Will Amazon acquisition crush Zappos’ corporate culture?
Amazon’s purchase of Zappos.com could spell disaster for the online shoe retailer’s cult-like following. However, Zappos CEO Tony Hsieh has a strategy for keeping the magic alive.
The story of gargantuan lumbering corporations gobbling up nimble startups only to crush their winning spirit is a common one. One of the primary reasons for this problem is that the leadership of the small company often cashes out and moves on.
That’s not the case with Zappos CEO Tony Hsieh. He has already signaled his intent to remain with employees in Las Vegas and to keep the team’s base of operations there.
That’s one step that can help keep employees from losing the edge that has propelled Zappos into the world-class online retailer that garnered $928 million from Amazon. The other part of Hsieh’s strategy was taking Amazon’s money entirely in stock.
Initially Amazon wanted to buy Zappos using only cash. However the Zappos team fought to make the acquisition stock-based and eventually won out on an all-stock deal.
This influx of Amazon stock will obviously increase the net worth of Zappos employees with equity in the company. However the move also gives Zappos employees a stake in Amazon’s overall success. This should help keep employees motivated to win as Amazon employees.
If this strategy seems atypical, it certainly mirrors Zappos’ path to success. Even Tony Hsieh admits that he wasn’t sure whether selling shoes online could be successful when he was first approached with the idea.
However, the company opened its doors and made wave in the industry by offering amazing customer service. Not only does Zappos offer free shipping, but it also has a no-hassle return policy that keeps its customers coming back for more.
It’s still possible that big company life will affect Zappos’ employee morale and brand in the marketplace. But if they’re lucky, Amazon can learn a thing from Zappos about delighting its customers.
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January 26th, 2010
From what it seems, employees are now leaving Zappos at an alarming rate. Of course, most stayed till they got their 20%(dec 09) of their 40%(dec 10) bonus they are suppose to get for the buyout, but with the rate things are changing, it looks like most of the people that designed and upheld the culture are one foot out the door…