On Innovation: Reflecting on the Legacy of Tony Hsieh

December 03, 2020 | Written by Jake Sorofman

Over the weekend, I heard the very sad news about Tony Hsieh, the founder and former CEO of Zappos, who died tragically and unexpectedly. I’ve always admired Hsieh. He was an iconoclast and an original, someone who didn’t let conventional thinking cloud his impressively fertile imagination and inimitable style. With Zappos, he brought high-end footwear–a category seemingly at odds with very idea–to online retail. And he did so with the sort of customer service you might expect from a Nordstrom or some other high end bricks-and-mortar retailer.

Hsieh flipped conventions. He relocated his company from San Francisco to Las Vegas to capitalize on cheaper labor and an abundance of service economy skills that would allow him to cost-effectively scale a whiteglove retail experience online. And in doing so, he remade a city.

Like many of us, he knew that making customers happy begins, fundamentally, with making employees happy. But instead of relying only on snacks, swag, holiday parties, and other cultural trappings to artificially prop up morale, under Hsieh, Zappos implemented bold and unobvious programs like a $1000 incentive for any employee choosing to quit after their first week on the job as a canny strategy for weeding out anyone but the most zealous employees.

He was nearly a billionaire, but also a committed minimalist who chose to live in an Airstream trailer. Sometimes he over-rotated on the unconventional. Most notably, as a way to counteract the inexorable creep of the bureaucracy that comes with scale, Hsieh introduced “holacracy,” a radical management theory and organizational strategy that eschews titles, hierarchy and even role definition in favor of distributed decision making and self-organizing teams that naturally form, amoeba-like, and cling onto the highest-value activities in the service of the customer.

It didn’t work.

Daring to Ask: Why?

Among many things to be admired about Hsieh was that he regularly dared to ask: Why? He challenged the as-is, and he backed up these challenges with bold thinking and big bets.

Hsieh was fearless. And while I’m sure he was thoughtful and even deliberative much of the time, many of us probably don’t recognize ourselves in some of the business risks that he took.

But being an innovator doesn’t necessarily mean being fearless. It means being fearless in your thinking–being willing to flip conventions on their ear–even if you’re perhaps a bit more risk-adjusted in how you put these ideas into action. That starts with the curiosity to wonder whether there might be a better way of doing things, followed by the courage to take an initial step into that question with intention and purpose.

Exploring the Art of the Possible

When I was a Gartner analyst, I visited dozens of CX and digital transformation labs inside large, traditional enterprises. These were typically immodestly large and impressively airy open-concept spaces decorated with smart modernist furniture, curated art books, live succulents, and staffed with hip and trendy strategists, futurists and designers. These labs were often cordoned off from the rest of the company, both to encourage creativity unconstrained by the challenges and realities of the current-state business, but also as a purposeful firewall to prevent distraction for those with budgets to meet, goals to hit, and businesses to run.

These companies were simply running controlled experiments–off to the side, bound in scale, scope and exposure to the rest of the business–with the goal of exploring the art of the possible. Some experiments would bear fruit, eventually finding their way into the mainstream business. Others would be treated as a way to test and fail in order to learn and scale.

From B2C to B2B

Whether it’s the remarkable impacts that visionary entrepreneurs like Tony Hsieh have made on company culture and customer experience or the notable innovations coming out of these transformation labs that I visited during my Gartner years, there is one common theme: B2C.

The reality is that, until recently, there’s been far less CX and digital innovation happening in the world of B2B. I’ve often wrestled with this fact; in my view, there’s no obvious reason why that should be the case. After all, business buyers are also consumers and their last-best experiences with companies like Zappos and so many others in their consumer lives necessarily shapes their expectations in every other commercial interaction–both B2C and B2B.

Why, then, would B2B companies be somehow relieved of the same burden of progress?

I believe this is starting to change.

Keep in mind that being an innovator doesn’t mean you have to be a radical. Nor does it mean that you have to be fearless like Tony Hseih.

It simply means that you have to find the courage to ask the difficult questions that challenge the status quo, and to be willing to take a small step into that change.

As Hseih said: “Without conscious and deliberate effort, inertia always wins.”

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