Zappos' Culture Code: Knowledge, Power, Presence, Harmony

Zappos is a company that’s built its reputation on a distinctive purpose, with a personality that’s equal parts quirky fun and fierce customer focus. So it’s not surprising that when it comes to navigating uncertain situations, the company, owned by Amazon, has a different approach: adopting complex adaptive systems.

We asked Pravir Malik, Ph.D., head of organizational sciences -- and an expert on building resilient companies -- for some insights.

Marketing Daily: What are complex adaptive systems?

Pravir Malik: Common examples are cities that work very well, like London, Paris or New York. An economy is also an example. They can occur at many, many different levels of granularity, from the way quantum particles interact with each other to very large systems.



What they have in common is decentralized control. No one’s truly in charge of a whole city. But when different things happen, the city itself might arise to meet challenges -- and these happen organically. There’s a lot of interaction and symbiosis.

Marketing Daily: And how does this apply to Zappos?

Malik: For companies in general, nobody ever knows how things are going to evolve. So an organization that is structured as a complex adaptive system can pivot easily.

That’s because within it, there are different sources of innovation, an expanding portfolio of products -- and it would be able to respond to what's happening in the market and pivot. And those changes take place quite seamlessly.

Marketing Daily: How might that look at a team level?

Malik: Each individual is part of a team. So as a different challenge arises, then an individual with a different skill set would step up to the occasion and take control of how to organize things, and figure out how to move forward. And this would all happen just organically -- nobody would need to tell a person or a team what to do.

Marketing Daily: So as data comes in, there’s this constant self-correction?

Malik: Yes. The organization, as a whole, senses what needs to be done. So does each team. The right people, with the right expertise, rise to the occasion.

Marketing Daily: How does that play out at Zappos?

Malik: I'm responsible for organizational sciences. So we have a team of people with different skillsets, and depending on what we're trying to do, the right person will take control.

At different times of an organization's journey, attention needs to shift to different things. So then there are pivots and refocusing. What distinguishes a complex adaptive system is that are no power plays. It’s not about egos, but about doing the most important thing.

Marketing Daily: You’ve said the basis of many enduring systems -- physical, chemical, biological, and even sociological -- has been love. That’s not a word you hear a lot when talking about business.

Malik: Many of these systems have been around for billions of years, especially when we think about physics, or living cells, all coming from four principles: knowledge, power, presence and harmony. We think of them by common words, like polysaccharides, lipids or proteins or nucleic acids. All four need to be in place to function optimally. That’s totally symbiotic and an expression of love. When all four aren’t there, the system cannot endure.

Marketing Daily: At the moment, because of the pandemic, people are very fearful. And that makes organizations fearful. How does that affect the balance?

Malik: It’s a [reason] to step back and say, “This is a fearful time. What should we do?" But it all comes back to these four things, as basic as they are. How is the company’s knowledge balanced with its power, its presence, which I think of as service, and with harmony? What’s lopsided or out of sync?

Marketing Daily: What’s your advice for organizations?

Malik: Don’t lose sight of these basics. It’s easy, especially in fearful times, to get focused on money-making. We forget about our real reason to exist. What purpose does the company serve?

Refocusing on that core purpose can reignite the whole organization. That helps companies break out of a negative spiral and find a path forward. For Zappos, it’s simple: We exist to deliver happiness. 

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