The 10 Commandments of Zappos
The core values of Zappos represent an effort by CEO Tony Hsieh to ensure that his company stays on track through good times and bad.
SAN FRANCISCO (Fortune) -- Zappos' 10 commandments influence everything from hiring to merit raises and firing. Here's a bit on the thinking behind the core values, and how each rule helps shape the Zappos culture.
This is the core value that rules them all. Zappos has become synonymous with exemplary customer service (routinely upgrading to free overnight shipping, for example, or sending flowers and a thank you note), but the ethos extends to vendors, as well. All suppliers have access to an extranet revealing the same inventory and sales data that executives see.
CEO Tony Hsieh has grand ambitions to grow Zappos into a big company that spans several industries. But he never wants it to feel big. This core value asserts that every idea will get a hearing, and acknowledges that most of the important ones will bubble up from the lower ranks.
This core value manifests itself in obvious and subtle ways alike. Cowbells ring constantly in the company's Las Vegas headquarters. There's plenty of singing, laughing, parades, blue hair and nose rings. But at Zappos, even mundane procedural meetings have flair. Applications are covered in crossword puzzles and cartoons. Interview questions are anything but standard (If you could be a superhero, which one would you be?) and when it comes time to inform new hires of fire-able offenses, the HR team acts out the no-nos in Saturday Night Live-style skits.
Zappos is a risk-taking organization where making mistakes is encouraged. Call center workers are prompted to try new things to delight customers. Managers are asked to take their team members out of the office as a way to get them to think about their jobs differently and create stronger bonds.
The Zappos lobby has several bookshelves fully stocked with business and management books ranging from "Peak" to "Made to Stick" and "Good to Great." They're free to employees. Zapponians are also encouraged to enroll in the dozen or so classes that the company offers as a way to learn new skills and disciplines, and climb the company ladder.
Zappos is big on transparency and having employees say what they think. But for the times when only a confidential talk will suffice, the company employs a full-time life coach who will listen to grievances and gripes, or even offer career advice on how to move up - or out.
"We're taking the concept of work/life balance off the table," says recruiting manager Christa Foley. Employees work together, play together, break bread together and come to think of each other as members of an extended family.
Zappos had a record year in 2008, and is cash-flow-positive and profitable, but like all companies, it's trying to watch expenses. The company laid off 124 workers last fall, and now it's looking for ways to obtain the same net effects as in the past, but through less-expensive means. An example: The culmination of each training session was always followed by a congratulatory happy hour that would help bond new employees - and cost around $3,000. Lately, the happy hour has become a $110 in-house ice cream social. "It's probably even more effective than going to a bar," says recruiting manager Christa Foley.
Of course everyone is asked to be passionate about their jobs, but they're also encouraged to bring outside passions into the fold. "If you're passionate about running a marathon and want to get the company involved, do it. Don't wait for someone else," says recruiting manager Christa Foley.
The all-important bookend core value. This underlies every action at Zappos, and starts with Hsieh who, despite being a Harvard grad and two-time successful entrepreneur, remains soft-spoken and deferential. "We're really grounded," says recruiting manager Christa Foley. "Even though a ton of companies come to visit us to learn about how we do things, we always say, 'These are some things we're doing that are working, but what are you guys doing?' We always recognize that there's more to do." 
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