If Zappos were a bank, it would be the happiest bank in the world

I’m in Dubai this week and picked up a magazine at the airport on the flight out.  It was one of the freebies on the newsstands – CNBC’s Business magazine – and the front page caught my eye partly because it had bank written on it, and partly because it had a big, happy smiley face.

The story is nothing about banking, although it could be as it’s all about happiness.

Happiness at work that is.

The core philosophy is that happy staff make happy customers make happy business.

I first heard such an idea back in 1990, when the chief executive of an insurance firm I worked with issued this mantra to his people as their core cultural value.

His philosophy was to give staff as much responsibility as they could take, and let them enjoy work by creating their own space.

Back then, it was called empowerment.

Today, it’s called happiness.

According to the article, happy staff do make happy business: sales go up by 37%, productivity by 31%, accuracy by 19%; and there are a host of health and quality-of-life benefits.

It's a good concept, but is a challenge for financial firms, who want to tightly control everything.

They don’t really want staff to think or to be empowered. They want tight control and procedures and, specifically using the regulatory and compliance argument, they don’t want any risks or issues which empowered, happy staff could create.

This is a challenge that has been broken by some mavericks, such as Arkadi Kuhlmann,  the former Chairman, President and Chief Executive Officer of ING Direct USA,

In a 2008 interview, when asked about their culture, Arkadi said that:  We don’t hire bankers, because bankers come in with their DNA and they have their legacy which won’t fit. Instead we hire dancers, musicians and artists.  People who can deliver a great and different experience. 

In other words, hire for attitude to ensure the right cultural fit for the role and, if you want happy customers, hire happy people and keep them happy.

It is a philosophy that is simple, but rarely seen.

I’ve only seen this in the UK within a few small firms.  The large firms become heavily organised and proceduralised, making such maverick style inoperable.

In fact, I can hardly think of any large firm that has happy as a culture or core value.

I can think of some that start that way, but the larger they become, the unhappier they get.

Take Google.

Google began with their Don’t be Evil mantra, which is now viewed by many as exactly what they have become.

In last month’s Fast Company they were talking about the rise of Facebook, and this paragraph stuck out:

As the company and service grew--it had 1,200 employees and 400 million users around the time we met in 2009--he and his colleagues worried endlessly about the death-by-meeting blues. Facebook had grown into 135,000 square feet in Palo Alto and many locations around the world. It was a quarter-life crisis in the making, the sinking realization that you can't stick it to the man if you become The Man. In Facebook's world, Google had become The Man. Engineers there checked in code, then waited as it disappeared for days, weeks, even months. Tales of the company's bureaucracy were becoming legend--especially at a company loaded up with Google refugees. "You feel like you have to make a choice at some point," said Mike Schroepfer, Facebook's VP of engineering. "Will the system be reliable or will the innovation be fast?"

The classic conundrum – you either become proceduralised or innovative, but you cannot be both.

Or can you?

Can you embed a happy, free-wheeling culture into a large, global organisation?

Some believe you can.

But it’s not somethng you can just bolt-on to the company.  As the CNBC article states:

Happiness doesn't happen overnight, however, and experts warn that attempts to engineer it through bolt-on initiatives are unlikely to wash … tools like promotions, bonuses, employee-of-the-month awards and free-pizza nights are "downright harmful to the drive, energy and commitment of employees... leaving them feeling manipulated, cynical and demotivated".

So I’m sticking in this case study from the article.  It’s all about Zappos, who claim their happiness culture can be transported to any other business.

Could this work for your bank?

Of all the business leaders trumpeting the happiness imperative, few are doing so more loudly than Tony Hsieh, CEO of Zappos, the world's largest online shoe emporium. Not only does Hsieh believe he's meshed profits with contagious passion and high spirits, he's also alighted on a second career cheerleading and helping to define a genuine movement.

Step through the doors at Zappos' Las Vegas HQ and it is sensory overload: a hearty welcome from Zappos' 'mayor' is delivered in front of banks of eccentrically themed workspaces; herds of reconnoitering business folk amble by dazedly on guided tours; and at any moment, someone - possibly you - may be roped into some raucous cowbell-led parade around the place to celebrate some winning outcome or other. Hsieh sits in the midst of it all in a cubicle draped in jungle vines and festooned with inflatable monkeys. At his behest, all staff enjoy free lunches, no-charge vending machines, a company library and naps in specially designated pods. Managers, meanwhile, are required to spend 10%-20% of their working hours 'goofing off' with their cohorts outside the office …

A big fan of the rave scene and its communalised, explosive joy, Hsieh is adamant that one of the best predictors of employee engagement is the number of friends they have at work and their overall level of social interaction. At Zappos this draws on social media in a big way - 500 of 1,500 employees are on Twitter (including Hsieh, who boasts almost two million followers).

Hsieh distils his happiness manifesto down to four core components: perceived control, perceived progress, connectedness and vision/meaning. Actual happiness manifests as either Rock Star (intense pleasure, difficult to sustain), Flow (time flies, 'in the zone'), or Being Part of Something Bigger Than Yourself (the longest lasting, 'so figure this one out first and others will come'). With a turnover of more than $1bn in 2009 and a $1.2bn acquisition by Amazon the same year, it would appear that the formula works.

At Zappos, culture is king and the workforce is meticulously assembled to match personalities and attributes. All staff go through two interviews - one for their professional ability and one for personality, the latter throwing up such curveballs as "What is your theme song?" and "How weird are you on a scale of one to 10?"

Every single hire goes through a four-week training programme encompassing two weeks staffing the phones in the customer-service centre. Non-committals are weeded out at the end of the first week with the offer of payment for their time and a bonus of $2,000 to quit …

"So many people, when they go to the office, leave a little bit of themselves at home and they have to put on this different persona," says Hsieh. "There's a lot of talk about work-life separation or balance and so on, whereas our whole thing is about work-life integration - at the end of the day it is just life, so you might as well enjoy all of it."

But while Zappos' methods may come across as offputtingly outré to the average executive, Hsieh insists that its template is eminently transferable.

 Case study from CNBC's Business magazine