Beyond ROI: Tracking Return on Community & Wellness

Maggie HsuCornell Hospitality Health & Design SymposiumOctober 10, 2016

Acquired by Amazon in 2009 for $1.2BN

Online shoe & clothing retailer founded in 1999

HQ in Las Vegas; 1,500 employees

CEO Tony Hsieh

Culture & 10 core values

ZAPPOS.COM

Self-managed organization (Holacracy)

CUSTOMER SERVICE STORIES

SIMPLE METRICS

1.  Time to answer2.  Was the customer

“Wow”ed?

1.  Length of call2.  After call work time3.  First call resolution4.  Schedule adherence5.  Abandonment rate

.

.

.

Longest recorded call is over 11 hours!

RESULTS

•  Greater customer loyalty over time•  Greater share of wallet

•  Lower employee turnover•  Higher employee happiness and engagement

DESIGN FOR… HEALTH

CONNECTION

INNOVATION

DESIGN FOR… HEALTH

CONNECTION

INNOVATION

Zappos prioritizes employee health (mental and physical) OVER bottom-line cost

Wellness Director

Life Coaches

Charity/CSR Director

Sustainability Director

HEALTH

•  On-site gym•  On-site fitness and health classes•  Financial literacy classes•  Pay for employees to enter races•  Pay for on-site Weight Watchers•  On-site dental cleanings•  Free smoking cessation classes•  Nap rooms•  Exercise/activity rewards•  Desk treadmills•  On-site massages

9

WELLNESS

DESIGN FOR… HEALTH

CONNECTION

INNOVATION

LAS VEGAS CITY HALL

DESIGN FOR “COLLISIONS”

•  Replicate water cooler or smoking moments

•  Increase camaraderie and trust

ELEVATOR GAMES

Unfortunately, I don’t recognize this Zapponian

I recognize them but don’t know anything about them

I recognize them but only know their name or department

I kind of know them

I know them pretty well

I know them inside and out!

How well do you know…Tony Hsieh?

MEASURING TRUST

DESIGN FOR… HEALTH

CONNECTION

INNOVATION

For every 100 feet of "zonal overlap," collaborations increased by up to 20%

OFFICE LAYOUT

Sitting twice as far = seeing half as often, squared

•  100 sq ft per person

•  Allow for “collisions”

OFFICE LAYOUT

“BETA TEST” PHYSICAL SPACE

ROI vs. ROC & ROL

Instead of maximizing short-term ROI (Return On Investment)...

We focus on maximizing long-term ROC (Return on Collisions)

and institutionalizing ROL (Return On Luck) – Accelerating Serendipity

ENGINEERING SERENDIPITY

Greg Lindsay

Steven Johnson

Biology Matchmaking Hospitality

Design the right conditions, not the

right output

•  At Buurtzorg in the Netherlands, nurses are self-managed in small teams – no bureaucracy

•  Results:

•  Faster healing

•  Half the amount of care

•  One-third fewer ER visits

•  Shorter average stays

SELF-ORGANIZATION

Culture + Self-organization + Collisions

Leads to…

Increased organizational innovation and resilience

NEW BUSINESS LINES

The Zappos corporate strategy team is looking to identify areas where its focus on a great customer experience could help Zappos disrupt and dominate a new market.

The team has brainstormed entering classic service industries, with something like a Zappos hotel or airline. And it has explored, seemingly in some depth, “even crazy stuff, like porta-potties,” Hsieh said.

Tony HsiehWashington Post InterviewDecember 2015

ZAPPOS PORTA-“PARTY” (VIDEO)

ZAPPOS WELLNESS HOTEL

MHsu@Zappos.com