Why Zappos Uses an Open Office Design

06/05/2014     

When it comes to start-ups, the setting is often one of familiarity over resources. Garages, apartments, even local coffee shops become places to hunker down, create, and collaborate, and Zappos’ early days were no different. In 1999, it was a tiny apartment in San Francisco that fostered interaction and innovation; today it’s the former City Hall in downtown Las Vegas. And while our setting has changed over the years, it’s that feeling of a start-up we want to retain. So how does a company do that when it grows from a few employees to 1,500? It’s all about the layout.

Creating an Entrepreneurial Culture

“A lot of the stuff we do, both from the Zappos perspective in terms of employees within the office and the city level is really thinking about how do you get people to collide more often. We prioritized collisions over convenience.” - Tony Hsieh

Whether it was a small apartment or a few spaces in an office park, Zappos has always had an open floor plan. Picture an open office as a space without walls, with work stations side by side, allowing for approximately 100 square feet per person. “From a cultural perspective, we’ve never had offices at Zappos,” said Rob Timoshuk, Director of Operations, “it’s very important that we don’t.” As Zappos has grown, it has faced familiar business challenges: more employees mean more square footage needs, and accommodating for growth has always been a top-of-mind concern for the company. Brad Tomm, Senior Manager of Campus Operations and Sustainability, points out that typically as companies increase in size, “you start to close yourselves off, you start having offices.” Moving into the former City Hall provided a unique opportunity to avoid that while preserving its iconic design and retrofitting its interior to current needs.

Large, traditional offices and dead spaces were replaced with an adaptable open floor layout. Coveted spots such as a corner window with a view are now common areas with comfy furniture for all employees to enjoy. There are no corner offices at Zappos. “We designed this office so that people can really customize the space to fit their team’s needs,” said Timoshuk. “A lot of it is organic, we did it in such a way so that people can move it around - data and power from the ceiling, it's all built to change - we leave it up to the employees. I think after we provide the shell and the structure it's not up to us anymore, it's more of an organic approach.” Tomm noted, “This is what a coworking lab looks like with high employee density . . . it's a good fit for our culture and that's why it works.”

Don’t Lose That Start-Up Feeling

“Launching a business is kind of like a motorboat: You can go very quickly and turn fast . . . a bigger business is like a cruise ship: There are lots of amenities and you can go a lot further, but it’s harder to turn quickly.” – Tony Hsieh

So what’s the big deal about start-up culture and how can it help a company to foster it? Anyone who’s worked at a start-up will tell you that there’s a buzz in the air, an energy that drives everyone. It’s a lot of late nights and early mornings and feeling part of a shared vision and a common goal. “I love the creation, the driving blind aspect of it all, never knowing if what you are doing is the right way to do it and constantly having to come up with solutions and try new ideas out,” says Rachel Wenman, Director of Business Development at local Las Vegas start-up It’s On Me. “I love celebrating, and because you start at the bottom, every day is a celebration and a new milestone.” Excitement grows but with growth comes fear of the dreaded ‘C’ word: Corporate. Growth is too often seen as a culture killer and the beginning of the end of what made a company what it is.

Freedom, accessibility, and accountability are all rampant in the beginning. Simply put: it’s easier to get things done. Bureaucratic red tape has yet to rear its hoop-jumping head. If you want help on a project, you can tap Joe sitting across the table from you, and if a job’s not getting done, it’s easier to ask your friend how you can help rather than sending an email into a black hole void. There’s a sense of responsibility, community, and connectedness when you know everyone you’re working with, and people are more likely to do what they said they’d do. All of these traits become more challenging and difficult to scale without strategic designs in place, and an open office sets out to do just that: keep things open.

Since moving into its downtown digs in October 2013, Zappos continues to see benefits to its new floor plan. “You can fit more people with [an open office] – a high employee density which is more efficient and more productive, too,” said Tomm. Timoshuk added, “I think it’s a more personable environment - there’s more communication.” An open design lends itself to more interactions, more sharing of ideas, and faster decision making. “I think it decreases the number of meetings. It fosters a culture of being able to do a quick two-minute walk-up meeting,” Tomm said. And who doesn’t want fewer meetings? But he also cautions, “You have to be self-regulated to work in this environment. If you need to put your headphones on, do it.”

Zappos CEO Tony Hsieh often refers to the statistic that when cities double in size, productivity goes up 15%, yet productivity per employee goes down as companies grow. Whether your company has 10 employees or 10,000, open office designs and higher employee densities offer more interactions than the usual office setting and hopefully, more productivity and innovation. A lot of businesses are banking on it. 

Author: Erica Spelman

Tags: Culture

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