If you ever wanted a lesson on good leadership, you’d be hard pushed to find one better than the awesome display of ingenuity displayed by Tony Hsieh, CEO Zappos.com, last week.

News transpired that internet retailer 6pm.com had, mistakenly priced almost all of its products at $49.99. The error was pretty unforgiving, given that some products on the site normally sell for well over $1,000.  

The site, owned by parent company Zappos Development, was quickly and efficiently shut down until the pricing problem was fixed. But, according to Aaron Magness, Director of Brand Marketing and Business Development for Zappos, while the error was probably a great deal for customers, the inadvertent slip-up turned out to be a pricey affair for the company – costing them more than $1.6 million.

So where does Mr. Hsieh come in? Well, thanks to some quick thinking blogging from both Magness and Hsieh, the potentially disastrous minefield of consumer rights and legal issues was altogether averted, after Hsieh held up the company’s hands to the mistake, accepted full responsibility for the error and confirmed that – despite the resulting loss – all orders placed at $49.99 would be fulfilled.

Of course, Zappos.com – and Hsieh himself – has a long history of putting the customer first. No matter what the cost.

According to Fortune’s 100 Best Companies to Work For, for instance, Zappos.com is currently placed as #23, outranking the likes of Starbucks, Microsoft, DreamWorks and Mattel.  

The newcomer to the list offers employees free lunches, concierge services and 100% coverage of health insurance premiums. Even better, perhaps, is the fact that even after Tony Hsieh cut eight percent of the staff, he received several glowing letters from departing staff, praising the retailer to the high heavens.



For Hsieh, however, it’s never just been about supporting the employees of company; but the customers too.

Fresh out of college, in 1998, Hsieh sold his first company to Microsoft for $265 million. A year later, he invested in an idea no one else would touch: selling shoes on the internet. Cut a long story short and Hsieh, who officially joined Zappos full time in 2000, has grown the company, as CEO, from having an annual turnover of $1.6 million dollars to over one billion now. So how? Well, it’s all about serving the customer to the nth degree – and for Hsieh that goes hand-in-hand with having great employees.

In short, Hsieh only hires people who are passionate about what Zappos standards for: the very best customer service.

“We have actually passed on a lot of experienced and talented people that we know can make an immediate impact on our top or bottom line but if they’re not a culture fit, then we won’t hire them.”

This is what Hsieh said to Adam Burns, Editor-in-Chief of MeetTheBoss.tv, in a recent, exclusive interview with the online, executive business channel. “I think everyone knows that company culture and customer service are important. The problem is that the payoff is usually two or three years down the line, and most companies are being run where they’re looking for some sort of payoff either in the same quarter or in the same year.  And if that’s what you’re looking to maximize in terms of profits then it doesn’t make sense to invest in customer service.”

Zappos’ own investment in customer service has left competitors trailing. Now, after diverting this week’s potentially disastrous pricing error, it seems Zappos (and Hsieh) remain shining examples of market leaders should, well, lead.

To see the interview, and learn more about Hsieh’s exemplary leadership style, watch the full video.