Maggie Hsu's Keynote Speech at Cornell's Inaugural Symposium for Hospitality Health & Design

1. Beyond ROI: Tracking Return on
Community & Wellness
Maggie Hsu
Cornell Hospitality Health & Design Symposium
October 10, 2016

2. Acquired by Amazon in 2009 for $1.2BN
Online shoe & clothing retailer founded in 1999
HQ in LasVegas; 1,500 employees
CEO Tony Hsieh
Culture & 10 core values
ZAPPOS.COM
Self-managed organization (Holacracy)

3. CUSTOMER SERVICE STORIES

4. SIMPLE METRICS
1. Time to answer
2. Was the customer
“Wow”ed?
1. Length of call
2. After call work time
3. First call resolution
4. Schedule adherence
5. Abandonment rate
.
.
.
Longest recorded call is over 11 hours!

5. RESULTS
• Greater customer loyalty over time
• Greater share of wallet
• Lower employee turnover
• Higher employee happiness and engagement

6. DESIGN FOR… HEALTH
CONNECTION
INNOVATION

7. DESIGN FOR… HEALTH
CONNECTION
INNOVATION

8. Zappos prioritizes employee health (mental and physical)
OVER bottom-line cost
Wellness
Director
Life
Coaches
Charity/CSR
Director
Sustainability
Director
HEALTH

9. • On-site gym
• On-site fitness and health classes
• Financial literacy classes
• Pay for employees to enter races
• Pay for on-site Weight Watchers
• On-site dental cleanings
• Free smoking cessation classes
• Nap rooms
• Exercise/activity rewards
• Desk treadmills
• On-site massages
9
WELLNESS

10. DESIGN FOR… HEALTH
CONNECTION
INNOVATION

11. LASVEGAS CITY HALL

12. DESIGN FOR “COLLISIONS”
• Replicate water cooler or smoking moments
• Increase camaraderie and trust

14. ELEVATOR GAMES

16. Unfortunately, I don’t recognize this Zapponian
I recognize them but don’t know anything about them
I recognize them but only know their name or department
I kind of know them
I know them pretty well
I know them inside and out!
How well do you know…Tony Hsieh?
MEASURING TRUST

17. DESIGN FOR… HEALTH
CONNECTION
INNOVATION

18. For every 100 feet of
"zonal overlap,"
collaborations increased
by up to 20%
OFFICE LAYOUT

20. Sitting twice as far = seeing half as often, squared
• 100 sq ft per person
• Allow for “collisions”
OFFICE LAYOUT

21. “BETA TEST” PHYSICAL SPACE

22. ROI vs. ROC & ROL
Instead of maximizing short-term ROI
(Return On Investment)...
We focus on maximizing long-term ROC
(Return on Collisions)
and institutionalizing ROL
(Return On Luck) – Accelerating Serendipity
ENGINEERING SERENDIPITY

23. Greg Lindsay

24. Steven Johnson

25. Biology Matchmaking Hospitality

26. Design the right
conditions, not the
right output

27. • At Buurtzorg in the Netherlands,
nurses are self-managed in small
teams – no bureaucracy
• Results:
• Faster healing
• Half the amount of care
• One-third fewer ER visits
• Shorter average stays
SELF-ORGANIZATION

28. Culture + Self-organization + Collisions
Leads to…
Increased organizational innovation and
resilience

29. NEW BUSINESS LINES
The Zappos corporate strategy team is looking to
identify areas where its focus on a great customer
experience could help Zappos disrupt and
dominate a new market.
The team has brainstormed entering classic service
industries, with something like a Zappos hotel or
airline. And it has explored, seemingly in some
depth, “even crazy stuff, like porta-potties,” Hsieh
said.
Tony Hsieh
Washington Post Interview
December 2015

30. ZAPPOS PORTA-“PARTY” (VIDEO)

31. ZAPPOS WELLNESS HOTEL

32. MHsu@Zappos.com