Delivering Happiness. Book Summary Tony Hsieh

Delivering Happiness

A Path to Profits, Passion and Purpose.

Tony Hsieh

In Delivering Happiness, Tony Hsieh uses personal stories to recount his journey to becoming CEO of Zappos.com. He also shares insights on why you should have a passion for what you do, regardless of the amount of money you are making—or walking away from. From his childhood experiences as a worm farmer to his stint as a poker player, to becoming a multimillionaire and the CEO of a company that has been ranked as one of the “Best Companies to Work For” by Fortune magazine, Hsieh’s path has followed his passion for what he believed was right for him. In the end, his objective is to do business in a way that allows him and his co-workers to be a happy and productive tribe.

What Tony learned from playing poker!

Tony Hsieh learned from his poker-playing days that choosing the right table was one way to ensure success. In the same way, choosing the type of business to build or represent is of critical importance. If you’re a business owner, take a moment to consider whether your business reflects your core values. If you are an employee or independent contractor, are you choosing to align yourself with an organization that has a culture and message which meshes well with your own? Greater happiness (and reduced stress) is often the result of working and living in a way that harmonizes with your core values. What do you need to do to create alignment between your values and your work?

I’d played a little bit of poker in college, but like many people I’d always considered it a fun way of gambling and had never bothered to actually study it. Back in 1999, poker was not yet a mainstream activity. Most people had never heard of the World Series of Poker, and TV networks like ESPN were not yet broadcasting poker tournaments to the masses. One of the most interesting things I learned about playing poker was the discipline of not confusing the right decision with the individual outcome of any single hand; but that’s what a lot of poker players do. If they win a hand, they assume they made the right bet, and if they lose a hand, they often assume they made the wrong bet.

For the first few months, I found poker both fun and challenging, because I was constantly learning, both through reading different books and through actual experience of playing in the field. I started to notice similarities between what was a good poker strategy and what made for a good business strategy, especially when thinking about the separation between short-term thinking (such as focusing on whether I won or lost an individual hand) and long-term thinking (such as making sure I had the right decision strategy).

I noticed so many similarities between poker and business that I started making a list of the lessons I learned from playing poker that could be applied to business:

Evaluating Market Opportunities

Table selection is the most important decision you can make.
It’s okay to switch tables if you discover it’s too hard to win at your table.
If there are too many competitors (some irrational or inexperienced), even if you’re the best it’s a lot harder to win.

Marketing and Branding.

Act weak when strong, act strong when weak. Know when to bluff.

Your “brand” is important.

Help shape the stories that people are telling about you.

Financials

Always be prepared for the worst possible scenario.
The guy who wins the most hands is not the guy who makes the most money in the long run.
The guy who never loses a hand is not the guy who makes the most money in the long run.
Go for positive expected value, not what’s least risky.
Make sure your bankroll is large enough for the game you’re playing and the risks you’re taking.
Play only what you can afford to lose.
Remember that it’s a long-term game. You will win or lose individual hands or sessions, but it’s what happens in the long term that matters.

Strategy

Don’t play games you don’t understand, even if you see lots of other people making money from them.
Figure out the game when the stakes aren’t high.
Don’t cheat. Cheaters never win in the long run.
Stick to your principles.
You need to adjust your style of play throughout the night as the dynamics of the game change.
Be flexible, Be patient and think long term.
The players with the most stamina and focus usually win.
Differentiate yourself. Do the opposite of what the rest of the table is doing.
Hope is not a good plan.
Don’t let yourself go “on tilt.” It’s much more cost effective to take a break, walk around, or leave the game for the night.

Continual Learning

Educate yourself. Read books and learn from others who have done it before.
Learn by doing. Theory is nice, but nothing replaces actual experience.
Learn by surrounding yourself with talented players.
Just because you win a hand doesn’t mean you don’t have more learning to do. You might have just gotten lucky.
Don’t be afraid to ask for advice.

Culture

You’ve gotta love the game. To become really good, you need to live it and sleep it.
Don’t be cocky. Don’t be flashy. There’s always someone better than you.
Be nice and make friends. It’s a small community.
Share what you’ve learned with others.
Look for opportunities beyond just the game you sat down to play. You never know who you’re getting to meet, including new friends for life or new business contacts.
Have fun. The game is a lot more enjoyable when you’re trying to do more than just make money.

Aside from remembering to focus on what’s best for the long term, I think the biggest business lesson I learned from poker concerned the most important decision you can make in the game. Although it seems obvious in retrospect, it took me six months before I finally figured it out.

I learned the most important decision I could make was which table to sit at. This included knowing when to change tables. I learned from a book that an experienced player can make ten times as much money sitting at a table with nine mediocre players who are tired and have a lot of chips compared with sitting at a table with nine really good players who are focused and don’t have that many chips in front of them.

In business, one of the most important decisions for an entrepreneur or a CEO to make is what business to be in. It doesn’t matter how flawlessly a business is executed if it’s the wrong business or it’s in too small a market.

In a poker room, I could only choose which table I wanted to sit at. But in business, I realized that I didn’t have to sit at an existing table. I could define my own, or make the one that I was already at even bigger. I realized that whether in poker, in business, or in life, it was easy to get caught up and engrossed in what I was currently doing, and that made it easy to forget that I always had the option to change tables. Psychologically, it’s hard because of all the inertia to overcome. Without conscious and deliberate effort, inertia always wins.

I started to force myself to think again about what I was trying to get out of life. I asked myself what I was trying to accomplish, what I wanted to do, and whether I should be sitting at a different table. From my poker experience, I knew it was never too late to change tables.

Your Culture is Your Brand.

Building a brand today is very different from building a brand 50 years ago. It used to be that a few people got together in a room, decided what the brand positioning was going to be, and then spent a lot of money buying advertising telling people what their brand was. And if you were able to spend enough money, then you were able to build your brand.

It’s very different today. With the Internet connecting everyone together, companies are becoming more and more transparent whether they like it or not. An unhappy customer or disgruntled employee can blog about a bad experience with a company, and the story can spread like wild fire by e-mail or with tools like Twitter.

The good news is that the reverse is true as well. A great experience with a company can be read by millions of people almost instantaneously as well.

The fundamental problem is that you can’t possibly anticipate every possible touch point that could influence the perception of your company’s brand. For example, if you happen to meet an employee of Company X at a bar, even if the employee isn’t working, how you perceive your interaction with that employee will affect how you perceive Company X, and therefore Company X’s brand. It can be a positive influence, or a negative influence. Every employee can affect your company’s brand, not just the front-line employees that are paid to talk to your customers.

At Zappos.com, we decided a long time ago that we didn’t want our brand to be just about shoes, or clothing, or even online retailing. We decided that we wanted to build our brand to be about the very best customer service and the very best customer experience. We believe that customer service shouldn’t be just a department; it should be the entire company.

Advertising can only get your brand so far. So what’s a company to do if you can’t just buy your way into building the brand you want? What’s the best way to build a brand for the long term? In a word: culture. At Zappos, our belief is that if you get the culture right, most of the other stuff—like great customer service, or building a great long-term brand, or passionate employees and customers—will happen naturally on its own.

We believe that your company’s culture and your company’s brand are really just two sides of the same coin. The brand may lag the culture at rst, but eventually it will catch up. Your culture is your brand.

We formally defined the Zappos culture in terms of 10 Core Values:

Deliver WOW Through Service
Embrace and Drive Change
Create Fun and a Little Weirdness
Be Adventurous, Creative and Open-Minded
Pursue Growth and Learning
Build Open and Honest Relationships with Communication
Build a Positive Team and Family Spirit
Do More with Less
Be Passionate and Determined
Be Humble

Many companies have core values, but they don’t really commit to them. They usually sound more like something you’d read on a press release. Maybe you learn about them on Day 1 of orientation, but after that it’s just a meaningless plaque on the wall of the lobby.

We believe that it’s really important to come up with core values that you can commit to. And by commit, we mean that you’re willing to hire and fire based on them. If you’re willing to do that, then you’re well on your way to building a company culture that is in line with the brand you want to build. You can let all of your employees be your brand ambassadors, not just the marketing or PR department. And they can be brand ambassadors both inside and outside the office.

In the books Good to Great and Tribal Leadership, the authors looked at what characteristics separated the great companies from the good ones. One of the most important ingredients they found was a strong company culture. Core values are essentially a formalized definition of a company’s culture. As it turns out, it doesn’t actually matter what your company’s core values are. What matters is that you have them and that you commit to them. What’s important is the alignment that you get from them when they become the default way of thinking for the entire organization. Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand.

For individuals, character is destiny. For organizations, culture is destiny.

Taking it to the next level.

We did not invent the idea that having a vision that had a higher purpose was important. We did not invent the idea that having a strong culture and core values was important. But through tours, the culture book, public speaking, Zappos Insights, Zappos Insights live, Twitter and our blogs, we found ourselves in a unique position: We had scaled our business from nothing to over $1 billion in gross merchandise sales in less than ten years, we had a strong set of integrated core values, and our culture of being open and honest and pursuing growth and learning was leading us to share, rather than hoard all the corporate knowledge and learning we had accumulated over the years.

In early 2009, we made Fortune magazine’s “100 Best Companies to Work For” list. We were the highest-ranking debut in 2009. At our offices, we were thrilled because that was an internal goal we had set in the early days of the company, and it came just a month after we hit our $1 billion in gross merchandise sales goal, well ahead of schedule.

But at the board level, we were at stalemate. The board wanted a financial exit, but internally at Zappos we didn’t want to exit. We wanted to continue to build, and we were in it for the long haul.

I realized I was relearning another version of the same lesson from LinkExchange, when our company culture went downhill: the importance of alignment. A strong culture and committable core values are important because they create alignment among employees. I was now learning that alignment with shareholders and the board of directors was just as important. This was just another challenge we needed to figure out. So we came up with a plan. We would buy out our board of directors.

We figured it would cost about $200 million to buy out our board of directors, so we started looking for potential investors.

When we started talking to Amazon in early 2009, however, both sides seemed to have a different perspective, compared with several years ago. On the Amazon side, they seemed to be more open to the idea of us continuing to run as an independent entity so that we could continue building the Zappos culture and business the way we wanted to. They had been following our progress over the years and saw that our approach to business was working for us. On the Zappos side, what mattered the most was continuing to do what we were doing for our employees and our customers while gaining access to Amazon’s vast resources.

In our minds, we thought of a potential acquisition scenario more as a great marriage than as selling the company. Both companies cared deeply about being customer-centric. We just had different approaches to it.

Even though our original goal was to buy out just our board of directors and the shares that they held and represented, the more we thought about it, the more that joining forces seemed to make sense. By doing so all parties would be 100 percent aligned, which was the whole challenge that we were trying to overcome with our current board of directors. If it weren’t for Amazon, I’m not sure how we would have ended up resolving our alignment issues with the board. We might have remained at a stalemate. But as it turned out, our misalignment with the board turned out to be a blessing in disguise. It just goes to show that you never know when something you perceive as a negative will ultimately turn out to be a good thing.

July 22, 2009, was the day we were planning on signing and announcing the pending acquisition to our employees and the world. It felt like we were about to launch a rocket to the moon. Finally, at the predetermined time, I sent an email to our employees. About twenty minutes afterward, I sent a follow-up e-mail letting our employees know that we would be having our all-hands meeting two days later.

The room was packed. I was on stage at our all-hands meeting looking over a crowd of seven hundred Zappos employees. We spent an hour covering everything that was in the e-mail I had sent out two days earlier and answered additional questions our employees had. As a surprise to our employees, Alfred and I announced that we were personally paying for and giving every employee a Kindle, Amazon’s electronic book reader. And then, as a final surprise we also announced that Amazon was paying for a big bonus to all of our existing employees to thank everyone for their hard work.

Without any prompting, everyone in the entire room spontaneously jumped from their seats, standing up cheering and clapping.

To me, that one moment represented success far beyond what I could have possibly imagined would have been achievable ten years ago. The moment signified far more than that. The united energy and emotion of everyone in the room was not just about my own personal happiness, and not just about the happiness of Zappos employees. We were about much more than just profits and passion. Collectively, this marked the beginning of the next leg of our journey to help change the world.

Half intentionally and half by luck, we had found our path to profits, passion and purpose. We had found our path to delivering happiness.

Action Steps from this book.

Are you working toward maximizing your happiness each day?
What are you passionate about?
What are your company’s values?
What is your company’s higher purpose?
Integrate core values into every part of your business.
Build a positive team and family spirit/culture for your company regardless of its size.
If you get the culture of your company right, most of the other stuff, including building a great brand, will fall into place on its own.

Final word.

If you’re looking for success in life and business then you need to have and maintain a positive attitude towards delivering happiness, this is an excellent book that most entrepreneurs haven’t read. Be different, grab a copy of it from the link below and don’t just read it study it.

Buy Here on Amazon

Happy reading

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