Simple question: Do employees tend to do better work in a demanding workplace culture that is positive, encouraging, and empowering, or will they do better work in a demanding workplace that is negative, critical, and constricting?

Notice that in either cases the workplace environment is demanding; i.e., expectations for performance are high, employees are accountable to results, and tolerance of sub-par performance is almost non-existent. Some would suggest that a workplace culture that demands accountability and creates high-performance must, almost by definition, be negative or critical or pressure-packed.  I would thoroughly disagree.

Hard work doesn’t necessarily have to be accompanied by misery. Workplace excellence and employee freedom are not mutually exclusive. Take online retail sensation, Zappos, for instance. Zappos, acquired by Amazon in 2009, has become a $1 billion dollar online retail juggernaut in less than ten years – selling shoes. Not exactly high-tech. Or glamorous. Or awe-inspiring. However, in less than a decade, CEO Tony Hsieh (pictured) proved that a workplace culture can serve as a competitive advantage and result in an incredibly successful company – selling what is essentially a commodity.

A recent Business Week article described a significant part of the Zappos culture, which is focused on providing over-the-top customer service:

Customer service reps are given plenty of freedom. They may chat for hours with customers, write thank-you notes, send flowers, and even direct shoppers to rival Web sites if an item is out of stock. In a tough year for retail, sales are up by double digits.

Zappos rep Michelle Robles recently showed a reporter how the approach works. She offers coupons and free shipping to one unhappy customer while grabbing a returned pair of shearling boots for another. Robles knows her top priority is to establish an emotional connection. More than 95% of Zappos’ transactions take place over the Web, so each actual phone call is a special opportunity. “They may only call once in their life, but that is our chance to wow them,” Hsieh says.

I can hear the micro-managers screaming. Let’s see…there is wasting time (thank-you notes?), wasting money (flowers? really?), and helping competitors (sending them to rivals?).  Exactly how is revenue growing at a double-digit pace?

Disagree with the methodology if you want. The point is that Zappos hit the Fortune 100 Best Companies to Work For at No. 29. Sales are up sharply even in a down economy. And the interesting news is that corporate executives are paying $4,000-a-pop to attend a seminar conducted by Zappos that teaches them how to duplicate the Zappos culture. Exactly how much is someone willing to pay to learn how to duplicate your culture?

Make no mistake, Zappos’ employees are well-trained and excellence is not optional. High-performance is an expectation of the culture and working there is not all about fun and games. However, the Zappos culture is one that employees thrive in, and those employees are more willing to accept the demands of a high-performance work environment.

Any company could emulate the corporate culture at Zappos, but it would take great leadership, a clear vision, and an unwavering commitment to the company’s values. Unfortunately, as highlighted in another recent article, companies often view the elements of a strong culture as an unacceptable hit to the bottom line:

For many companies, catering to customers is seen as just another expense. Training employees to be effective and empathetic costs money. Perks like free shipping or no-questions-asked returns cost more money. Even setting out free coffee for office visitors adds up over the course of a year.

In these cost-conscious times, cutting back on those extras seems like an easy call. But companies like Zappos are taking the opposite tack. They still offer free shipping not only on every order, but for returns as well. And those returns are accepted for a full year after the date of purchase.

In a letter to employees announcing the Amazon deal, Zappos Chief Executive Officer Tony Hsieh wrote: “Our vision remains the same: delivering happiness to customers, employees and vendors. We just want to get there faster.”

Delivering happiness to customers, employees, and vendors. Who would be willing to pay someone to learn that?

Tagged as: Culture, Expectations, Leadership, Vision