By Tony Hsieh
FORTUNE -- Much attention has been given to Yahoo (YHOO) CEO Marissa Mayer and her decision to ban her employees from telecommuting. While the initial reaction may have fomented controversy, the truth is that her reasoning is in line with our philosophy here at Zappos: More face time in the office can have a huge positive impact in helping build company culture.
In my book Delivering Happiness, I talk about how we think of our brand at Zappos in terms of the 3 C's: clothing, customer service, and company culture. That last C -- company culture -- isn't just something we think is important. It's the No. 1 priority for the company, and it's actually core to our business strategy. Our belief is that if we get the culture right, then most of the other stuff -- like delivering great customer service or building a long-term enduring brand or business -- will just be a natural byproduct.
With about 1,500 employees now, we've been in business for nearly 14 years and have spent a lot of time thinking about how to continuously improve our company culture. We do things like playing the "face game," where every time an employee logs into our backend systems, he or she is automatically shown the face of a random employee, along with the accompanying bio.
There are doors on all four sides of the building I'm working in. The employees of the building's previous tenant went through whichever door was most convenient. We actually lock all the doors from the outside and force employees to walk around the entire building to get to the front door. Even though it's more inconvenient, we believe this helps our culture because it creates more opportunities for employees to have serendipitous interactions by colliding with each other in the main lobby.
Two years ago, we announced that we would be taking over the former Las Vegas city hall. Now that we are about six months away from completing construction, our workforce is actually split with about 200 employees in a temporary office in downtown Vegas, and the majority of our employees in our soon-to-be ex-headquarters in an office park in Henderson (a suburb of Vegas). Over the past year, I've been spending most of my time out and about downtown because I live there and also because of my involvement in DowntownProject.com. So when a Zappos employee saw me comment on a CNBC interview saying that we don't encourage working from home, he emailed me the following:
I wanted to openly share with you a discussion my team had about that. People (including myself) immediately jumped to "well, that's pretty hypocritical." You take a lot of your meetings from home and people at Zappos see you less and have fewer opportunities for serendipity for you. I know it is more convenient for your time and meetings to have them at your place. But you also talk about how it is not about convenience that we have only one door into buildings. We want you to walk a little bit farther so you have a chance to bump into people. I would encourage you to see if you can do more of your meetings from Zappos' downtown offices instead of your apartment ... People want to see you around more and I think that will help.
Here was my response:
I think if more employees held meetings in their homes, invited folks that were interested in Zappos or downtown to come into their homes, etc., I actually would be all for that and think that it would be a good thing for our culture and brand. I think getting to know your coworkers in a more personal setting is great. I think being out and about in the downtown community is actually our next evolution, and I think it may actually be better than being in an office, or perhaps it should be split 50/50
Community >= Office > Working from home alone
Or actually probably the better way to think about it is in terms of collisions and motion. Out in the community you'll probably have more collisions and move around more than in the office.
Basically, I think it's more beneficial if more employees were out and about downtown 3-4 hours/day (which is where I am now most of the time -- I'd estimate I'm out and about downtown at least 3-4 hours/day in a collisionable way) than for me to go into the office 3-4 hours/day. So I'm trying to set the example for what I'd like everyone else to do if I had a magic wand.
"Out and about" could mean taking a business meeting at the local coffee shop, turning a conference room meeting into a walking meeting, meeting a vendor for dinner at a local restaurant, or grabbing a drink with coworkers at the local bar.
Wanting employees to be out and about in the community may seem counterintuitive at first. But research has shown that historically, when cities double in size, productivity and innovation per resident increases by 15%. But when companies get bigger, usually productivity per employee goes down. Part of our goal at Zappos is to avoid that fate, by creating a hybrid between corporation and community that's never been attempted at scale before. Research has also shown that most innovation comes from something outside your industry being applied to your own, which is why we believe that collisions within a company are just as important as collisions outside of a company.
It may seem strange that although Zappos uses technology to scale, we still rely so much on face-to-face interactions. It's because our biology has evolved far, far slower than our technology. We are a social species, designed for in-person interactions in multiple locations, not just by email and phone calls or remotely from home, and also not just in conference rooms. We are designed to be in motion, and we are designed to be creative, to share ideas, and to innovate in multiple locations throughout the day. Getting to know people in different environments and contexts leads to higher levels of trust, better communication, and can ultimately contribute to a stronger and more innovative culture.
What this means is that while I applaud Yahoo's Mayer for taking a step in the right direction, I think there are even more steps to take. I think the next evolution in building a corporate campus is no longer going to be about the insular master-planned environment that you might find at big Silicon Valley tech companies.
I think the next evolution will be about being part of, and contributing to, the surrounding community. I think that, in the long run, being invested in the local community will ultimately help companies attract and retain more employees as corporations help make their surrounding neighborhoods more vibrant and walkable.
This is why, in addition to clothing, customer service, and company culture, we made the decision to add a fourth C to the Zappos brand and business strategy: community.
I can't wait to see how it all unfolds.
Tony Hsieh is the CEO Zappos.com and author of Delivering Happiness.
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