The importance of values to Levi Strauss & Co, 155 years on

February 13, 2010

Levi Strauss & Co.I discovered a fantastic talk about sustainability by John Anderson, the CEO of Levi Strauss & Co. to the Haas School of Business at UC Berkeley. In it he describes the efforts they are making to lead the world in cutting down the environmental impact of their products, both before and after manufacture.

But the really interesting content for me was the insights into the unique values of this 155 year old company. An example: after the 1906 Earthquake in San Francisco the company extended credit to its wholesale customers to help them get back in business, and all employees were kept on the payroll whilst production facilities were rebuilt. That’s the sort of thing you do when you understand the value of community, long term relationships and retaining great people.

Levi’s was a market leader for a long time, but it went through a crisis time where its commercial success waned. Extensive research was carried out and they found that whilst customers loved the company and loved the brands, the products were not liked or relevant. John Anderson explains:

“We went back and looked at our product. I firmly believe today that without that consumer goodwill that we’d built up it would have been very difficult to get through that challenging period. We worked hard to turn around so now we’re market leaders again. I believe our values played a key role in buying us that time and getting the consumer to come back and buy our products. I put emphasis on consistent and authentic values, because I strongly believe that customers quickly sniff out companies who do things for the short term pr or marketing [advantage]. They know the difference and reward it with their loyalty.”

Asked by a faculty member to give an example of a challenging moment, one which illustrated difficult choices in action, Mr Anderson continued with a challenge to the audience of business school students:

What’s important to you? What’s really important to you? If you’re clear on what your values are, that should play a role in what companies you want to work at. You’ve got to start from there. Companies like Levi Strauss… we’ve been very in clear in what we stand for. I have no doubt that I would not be at this company today if it did not really align with my own values and what was important to me. If you get them, every day is not so much a test, just reinforcing what you believe in.

[When recruiting] I really want to know, what’s important to you? My company might not be the place you want to work. We’re not going to be a company that does profit without principles; that’s not who we are. We have our key values. That’s what makes us who we are. I’m not saying every company should be like that, but after 150 years something works. And the commitment to that is non negotiable from me and my team, and the stakeholders and shareholders are aligned with that as well. From top to bottom.

Where do you want to work?
What’s important to you?
Do you have the courage to stay committed to that journey?

“I have talked people out of joining Levi Strauss. If you want to come here and be ruthless, slash and burn, and only drive profit to the bottom line, this isn’t the place for you to be. If you truly want to come in and align to the values and drive sustainable profitable growth, then this is an option for you. So we have our filters. But at the end of the day they’re not difficult, [the values], because they’re there, we’re disciplined and we obey them. When things got really tough we didn’t back off. We stayed true. But we sure were tested; we certainly were tested. That’s what leadership is really about. Now more so than ever.”

Competing in the world of fashion, where trends come and go, the one thing that remains constant at Levi’s is their values, and it seems to have kept them at the top of their game for over a century and a half. I’m prepared to bet they will be around to celebrate their 200th anniversary and beyond, still as the market leader.

You can watch the video here:

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Culture at Zappos and how everyone benefits

December 8, 2009

Zappos TourI recently spent two days immersed in Zappos at their Las Vegas HQ and this post follows up on my description of Zappos’ world-class customer service. The two day Zappos Insights programme starts with a tour round the office. (This is the same tour that anyone can get for free). On the tour round we met team after team of happy, smiling people. We were greeted by a group of people singing, blowing on whistles or party toys. Everyone has their own, very personalised desk area and there’s all sorts of stuff you wouldn’t expect to see in an office, which makes the whole place feel more like a college dorm room than a place of work. But that’s the point about Zappos, work doesn’t have to be dull!

If you have seen some of the many zany videos available on YouTube you may think that Zappos isn’t serious about anything. They are, it’s just that for obvious reason it’s mainly just the fun and weird stuff that makes it on to the web, it’s more entertaining!

Why the focus on culture?

Tony HsiehBy the time Zappos CEO Tony Hsieh sold his first business to Microsoft in 1998 for $265M he had come to realise something was no longer right with the culture at Link Exchange. Work had ceased to be fun and this he puts down to the type of people they hired, the best for the job but not the best for the atmosphere; many were “assholes”.

Culture and values

Zappos is different, it’s been carefully built over the years by only hiring people with the right cultural fit. Regardless of how much they need staff, if they can’t find the right people with the right attitude, they won’t hire them, no matter how talented that person may be or how badly they need to fill the position. We were given an example from Zappos’ recruitment manager, “right now we would hire 30 software developers if we could find them”. That’s commitment.

These are the ten core values:

1. Deliver WOW Through Service
2. Embrace and Drive Change
3. Create Fun and A Little Weirdness
4. Be Adventurous, Creative, and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships With Communication
7. Build a Positive Team and Family Spirit
8. Do More With Less
9. Be Passionate and Determined
10. Be Humble

These were carefully assembled over the course of about a year when Tony Hsieh emailed everyone in the company asking for a list of their personal core values; it was a truly democratic process. Says Tony, “The individual values are not what is important, but alignment of everyone to the core values”.

Why does culture matter?

As the culture evolves in a company such as Zappos amazing things happen, and the business benefits enormously. Here are some striking examples from Zappos of the benefits of the highly aligned culture:

  • Productivity increases by anywhere from 20% to 100%
  • Staff churn is incredibly low; just 6% voluntary churn within the Customer Loyalty Team (call centre)
  • Ideas are generated from the ground up and this innovation keeps the company ahead of its rivals
  • There is a clear framework for delegated decision making which means that the most junior employees, the call centre reps can do things like spend company money on ad-hoc gifts to customers, (which increases customer loyalty), and, by giving people autonomy, job satisfaction vastly increases too

Culture in action

Graffiti wall at ZapposThe job satisfaction, sense of family and loyalty to the company is evident when visiting, whether it’s the graffiti wall where members of staff have written various glowing comments about Zappos or just the genuine friendly way people in the corridors make eye contact, smile and say “hello” when they pass each other.

The outpouring of employee-love for Zappos is documented every year in a the “culture book“. In the book are unedited responses from all staff explaining what the Zappos’ culture means to them. Here’s one I like:

“We all share the quality of wanting to provide service through excellence in anything that we do. It’s that spirit that continues to allow us to grow to what we are today. In this family, we all strive to develop and improve, not just one person but the entire company as a whole. Our culture here is compiled by all of us sharing beliefs, values, goals, attitudes and practices that characterise us as a family”.

For more real-life examples of company’s with extraordinary cultures and the benefits which accrue I recommend books including Good to Great, Built to Last and Tribal Leadership. (Thanks to Zappos you can download a free audio version of Tribal Leadership here; listen to it and then pass it on!).

[Update: my visit to Zappos Insights was covered by Business Week]

I recently spent two days immersed in Zappos at their Las Vegas HQ and this post follows up on my description of their world-class customer service. The two day Zappos Insights programme starts with a tour round the office; this is the same tour that anyone can get for free, just by emailing tours@zappos.com On the tour round we met team after team of happy, smiling people. Sometimes we were greeted by a group of people singing, blowing on whistles or party toys. Everyone has their own, very personalised desk area and there’s all sorts of stuff you wouldn’t expect to see in an office, which makes the whole place feel more like a college dorm room than a place of work. But that’s the point about Zappos, work doesn’t have to be dull! Those of you who may have seen some of the many zany http://www.youtube.com/watch?v=fUhAEFkbh5I videos available on YouTube may think that Zappos isn’t serious http://www.youtube.com/watch?v=CE00IspxzDY about anything. They are, it’s just that for obvious reason it’s mainly just the fun and weird stuff that makes it on to the web, it’s more entertaining! By the time Zappos CEO Tony Hsieh sold his first business to Microsoft in 1998 for $265M he had come to realise something was no longer right with the culture at Link Exchange. Work had ceased to be fun and this he puts down to the type of people they hired, the best for the job but not the best for the atmosphere; many were “assholes”. Culture and values Zappos is different, it’s been carefully built over the years by only hiring people with the right cultural fit. Regardless of how much they need staff, if they can’t find the right people with the right attitude, they won’t hire them, no matter how talented that person may be or how badly they need to fill the position. An example from Zappos’ recruitment manager, “right now we would hire 30 software developers if we could find them”. These are the ten core values: 1. Deliver WOW Through Service 2. Embrace and Drive Change 3. Create Fun and A Little Weirdness 4. Be Adventurous, Creative, and Open-Minded 5. Pursue Growth and Learning 6. Build Open and Honest Relationships With Communication 7. Build a Positive Team and Family Spirit 8. Do More With Less 9. Be Passionate and Determined 10. Be Humble These were carefully assembled over the course of about a year when Tony Hsieh emailed everyone in the company asking for a list of their personal core values. It was a truly democratic process. Says Tony, “The individual values are not what is important, but alignment of everyone to the core values”. Why this matters As the culture evolves in a company such as Zappos amazing things happen, and the business benefits enormously. Here are some striking examples from Zappos of the benefits of the highly aligned culture: Productivity increases by as much as 20%-100% Staff churn is incredibly low, just 6% voluntary churn within the CLT – Customer Loyalty Team (call centre) Ideas are generated from the ground up and this innovation keeps the company ahead of its rivals There is a clear framework for delegated decision making which means that the most junior employees, the call centre reps can do things like spend company money on ad-hoc gifts to customers, (which increases customer loyalty), and, by giving people autonomy, job satisfaction vastly increases too The job satisfaction, sense of family and loyalty to the company is evident when visiting, whether it’s the graffiti wall where members of staff have written various glowing comments about Zappos or just the genuine friendly way people in the corridors make eye contact, smile and say “hello” when they pass each other. The outpouring of employee-love for Zappos is documented every year in a the “culture book”. (For a copy email ceo@zappos.com with your mailing address). In the book are unedited responses from all staff explaining what the Zappos’ culture means to them. Alexa F explains in her entry: “We all share the quality of wanting to provide service through excellence in anything that we do. It’s that spirit that continues to allow us to grow to what we are today. In this family, we all strive to develop and improve, not just one person but the entire company as a whole. Our culture here is compiled by all of us sharing beliefs, values, goals, attitudes and practices that characterise us as a family”. For more real-life examples I recommend books including Good to Great, Built to Last and Tribal Leadership. (Thanks to Zappos you can download a free audio version of Tribal Leadership here; listen to it and then pass it on!). Photos: Graffiti wall Tony talking

Richard Tait – pursuing passion and creating joy in the workplace

October 21, 2009

Richard TaitI should have been on a plane heading back to Europe yesterday but instead I rearranged my plans and extended my stay here in the San Francisco bay area to listen once again to the truly unique Richard Tait of boomboom. Yes, he really is that good and his story should be broadcast wide to entrepreneurs as you can learn a lot from someone who lives his life with such passion and enthusiasm.

Richard was speaking to a group of University students and started by explaining that “I want to inspire and resonate with just one person in the room, and get the message across to follow your heart”. At this point everyone realised they were not going to get the run-of-the-mill CEO talk. Having seen Richard speak before at The Entrepreneurial Exchange I knew what to expect; what he said resonated with me and showed me how you can operate a business using culture as the bedrock.

An exceptional career

After completing his undergraduate degree and fighting against the system in the UK which turns away MBA candidates without work experience, he enrolled at the Tuck school of business at Dartmouth College. That led to a transformational job with Microsoft, when the company only had around 2000 employees and at a point in time when its mission was crystal clear, putting a PC on every desk. Just four days into being there he was given the opportunity to lead a 100 strong team developing a major new project; Microsoft was a strict meritocracy and willing to take risks with the exceptional talent available to them. Ten years later, during which time he had won the employee of the year award and started numerous successful business within the company came the next major fork in his life when he realised that the culture had changed as the company had grown and he no longer enjoyed working there.

Cranium & culture

Some people are great at pictionary but struggle with scrabble, equally there are plenty of people who excel at scrabble and not at pictionary. This simple truth learnt while playing those 2 games with friends was the genesis for the board game Cranium, a game where everyone would have a chance to shine at whatever their talent is. Or to put it another way, “an entertainment company that celebrates the human spirit”. That very clear vision, coupled with a clearly defined set of core values created an amazing company culture. That in turn happened to create the third largest games company in the World, and it became such a thorn in Hasbro’s side that they eventually bought the company last year. Now Cranium exists as a single game in their enormous portfolio, and the team and the culture that went with it has died. It’s no wonder that Richard explains how it “broke his heart”. Happily though at a recent picnic for employees one year on, the culture and spirit continues and people look back fondly on their times together.

The secret sauce

There is no doubt that Richard has an exceptional business talent and his meteoric career is no doubt down to this and working very hard and making personal sacrifices along the way. However, it’s the style and authenticity in which he has done it all which is what we should learn from, it’s inspiring and exceptional.

His advice for life is to pursue your passion and be joyful; focus on what interests you. (And when you do it’s really not that difficult to communicate).

He is a poetic story-teller and speaks with tremendous conviction and a disarming level of transparency and honesty. Why? Richard is being nothing other than being himself and that makes it easier to achieve business objectives. Much of business is about trust and persuasion, whether it’s convincing a customer to buy from you or an investor to part with their cash.

Richard’s talent is the ability to tell a story and get people to believe, to buy in, and to love it (and him). I was told that after meeting Richard a VC said to his colleague that although he wasn’t sure about the business idea or whether it would work financially they had to invest because of Richard.

Richard’s talent to persuade and transform has been recognised by someone famous for both those qualities as he was recently hired by Howard Schultz, founder and CEO of Starbucks to work on a transformational project. I’m sure it’s no coincidence that the title of Howard’s autobiography happens to be…

Pour your heart into it“.

Books as recommended by Richard:


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