Corporate Headquarters Case Study: Creative Connections
By Anne Cosgrove
From the June 2014 issue of Today’s Facility Manager
Successful companies do not all follow the same roadmap to achieve their goals, but identifying the elements that are necessary for each organization is crucial. For Zappos.com, an online retailer of shoes, clothing, accessories, and housewares, this knowledge has been at the forefront since its founding in 1999. Good customer service is a guiding principle, and CEO Tony Hsieh and his team recognize the importance of an effectively designed workspace that fosters employee success.
In the fall of 2013, Zappos moved into its new headquarters in Las Vegas, NV. Today, 1,500 of the company’s 1,700 employees work in the facility that the company renovated from top to bottom beginning in 2012. Formerly Las Vegas City Hall (the city moved out in 2012), the nearly 300,000 square foot building was gutted and renovated for Zappos. The project team delivered a workplace that not only retained the Zappos company culture but also enhanced it.
Brad Tomm, senior manager of campus operations and sustainability for Zappos, was an integral member of the headquarters project team. He also managed logistics for the move to the new building (a 40 day endeavor) and spearheaded the campaign for LEED certification. Describing the company’s new home and its impact on operations, he says, “The building is a really good fit for our culture, which is based on communication, quick decision making, and having fun in the office. There is more collaboration than we’ve ever had. Everything we did with the design of this building was focused on people being able to do their jobs efficiently.”
Previously, Zappos was based in Henderson, NV, not far from Las Vegas. There, the company thrived with a workplace environment set up to encourage collaboration and spontaneous “collisions” between fellow employees. Though sited in a traditional office park and scattered throughout three buildings, Zappos made interaction between departments and within departments a prime focus in Henderson. But the decision to move to downtown Las Vegas, an area in need of revitalization, provided the company the opportunity to take the next step in its success.
Ways Of Working
Describing the facilities in Henderson, Tomm notes, “We had mostly low walled cubicles, but there was not an open floor plan.” As the company grew, it took on more square footage, and the result was office space characterized by too many walls and corridors dividing employees—at least by Zappos’ standards. The company also simply outgrew the previous facilities.
“We were very interested in the open co-working model that Silicon Valley has been doing for a while,” explains Tomm. “Many tech startup companies work in a collaborative environment. And we’ve always had that [in Zappos’ offices]. Tony [Hsieh, Zappos CEO] has never had an office. None of our executives have had offices, and we like that.”
To expand on the possibilities, the company tested various furnishings and equipment at a leased space ahead of the move into its new headquarters. Occupying two floors of office space, testing took place while the new headquarters was being renovated. “We did this about a year out from the move,” says Tomm. “We tested furniture, carpet, lighting, meeting room design, and more. We moved 200 people there from different departments, and the key takeaway was that this was a good fit for us.”
Increased employee density was introduced with the new building; dedicated per employee space is less than 100 square feet. “It’s pretty tight, but it works great, and people are really happy with it,” says Tomm. “In fact, people often want to add more desks nearby. They want their teams super close. And if two teams merge, they often want to sit together.”
Privacy and the ability to concentrate can be a challenge in this type of setting, so the company included numerous areas throughout the building where an individuals or groups can work without background sound. Speaking on the departmental settings, Tomm notes, “Some areas are more quiet than others; the tech teams seem to be quiet. And if people need to do ‘heads down’ work, they can use headphones or easily find a quiet place on the campus.”
And for customer service or other departments that use the phone frequently, they are encouraged to let their customers know that the close work setup is part of the company culture. “[We explain] that’s the way we work, and people seem to be very receptive to that,” says Tomm.
Part of this design approach included a focus on flexibility and mobility, whether for an employee, team, or entire department. A very visible strategy used here is that cabling for employee equipment (e.g., computers, task lights) is positioned above desks using an overhead hanging system. This setup enables individuals to disconnect and reconnect their items with ease and without having to ask for assistance from facilities and other departments.
Included in Zappos’ test office facility (which is still occupied), the team found this cabling management approach to be a good fit for the company. “It’s really efficient for moving desks,” explains Tomm. “I can rearrange an entire floor in a matter of hours. And people like it. After a while, you don’t even notice it. That’s something we saw in some Silicon Valley offices, and it’s a best practice we share with other companies. Also, there is not a lot of space underneath our desks for wires.”
The new Zappos building includes an 11 story office tower, and employees are located on every floor except the 10th, which is where the company’s seasonal employees work. In off seasons, it serves as one of the facility’s quiet areas.
Encouraging interaction between occupants when they are away from their work areas was also a priority. “That’s part of [Hsieh’s] vision and philosophy on having collisions,” says Tomm. “Especially because we are all in one building now, he wants everybody to see each other and get to know each other.” On a facility scale, this translated into closing off a majority of the exterior doors so employees and visitors must enter through one entrance. Upon entering, everyone walks through a central courtyard that connects the office tower and visitor lobby.
Additionally, the company closed off a skybridge that connects one of the parking garages with the facility. Instead, people need to exit the garage and enter using the main entrance. “We were able to incorporate a lot of this vision during design and make it a reality. And we are really happy about that; it’s working very well,” Tomm says.
Project Earns LEED Gold
In May 2014, the Zappos headquarters was awarded Gold level certification under the LEED Building Design and Construction (BD+C) v2009 rating system. “When I joined the project, the decision had already been made not to pursue LEED certification” recalls Tomm. “The company planned on renovating the existing facility into a high performance building, but not pursuing LEED. That was one of my first big decisions, to convince the company that LEED was the right way to go.” Tomm is Zappos’ first full-time sustainability professional, but the company already had a “green team,” L.E.A.F., in place when he began working there two years ago.
With Tomm’s recommendation, the company decided to go further with sustainability and pursue a higher level of LEED certification. From there, they hired consulting firm Cadmus to perform an assessment of the building and the renovation plan, and that firm concluded the project could result in a LEED Certified level building with the plan that was in place. Tomm had worked with Cadmus on LEED projects in his previous position as director of sustainable operations for MGM Resorts International in Las Vegas.
When the certification was complete, the new Zappos headquarters had earned 66 points (of a possible 110). In the Sustainable Sites section, the project gained 20 of possible 26 points; in Water Efficiency, six of 10 possible points were earned; and for Energy & Atmosphere, the project garnered 14 of 35 points. Zappos’ points for the other LEED categories were: Materials & Resources (eight of 14); Indoor Environmental Quality (8 of 15); Innovation (6 of 6); and Regional Priority Credits (4 of 4).
When the headquarters building was recognized with the LEED certification earlier this year, Tomm said, “We are excited and humbled to have earned this prestigious certification for our new headquarters. The benefits of building to LEED standards will be enjoyed by our Zappos family, the community, and the environment.”
During the process, the project team conducted a whole building energy model using eQUEST, and this showed an expected 25% reduction in energy due to new equipment Zappos installed (e.g., chillers, cooling towers, air handling units). Still in the relative early days of occupancy now, Tomm and his colleagues are keeping tabs on energy and water use, recycling rates, and all other significant metrics.
The strategies specifically contributing to the LEED certification include:
- The 25% reduction in energy consumption when it is compared against the baseline consumption;
- irrigation and domestic water fixture upgrades yielding 57% reduction in water use against baseline consumption;
- More than 20,000 yards of low emitting, Cradle to Cradle (C2C) Certified carpeting, containing 44.4% recycled content;
- A waste management plan during construction that led to a more than 75% total waste diversion rate;
- A lighting power density (LPD) of 0.57 watts per square foot—nearly half the average office LPD of 1.0 watt per square foot;
- Allocation of less than 100 square feet per employee, therefore less energy used per square foot per employee;
- Enhanced commissioning to verify that systems operate according to planned requirements (typically yields 5% to 16% additional improvements in efficiency); and
- 48 preferred parking spaces for low emitting and fuel efficient vehicles as well as four electric car charging stations.
Meanwhile, the furniture chosen for workspaces and conference rooms comprised of total pre-and post-consumer recycled content ranging between 24% and 67%.
Recycling procedures for occupants is another area Tomm highlights when discussing the sustainability aspects of the new headquarters. At the test facility, he had implemented a policy that eliminated individual wastebaskets, and instead placed receptacles that accommodate recycling in common areas. Based on the results, this practice was carried over to the headquarters. Using this system, the goal is to recycle 80% to 90% of office waste. (While working at MGM, Tomm developed the company’s waste management and recycling programs and helped MGM Resorts increase its recycling rate from 9.8% in 2007 to more than 38% in 2011.)
In reflecting on the opportunities and challenges of transforming an existing building to meet Zappos’ needs, he says, “There are challenges in remodeling a building. You may not be able to have the optimal flow or the exact height ceilings you want, but we are very happy with the result.”
This article was written based on project literature and an interview with Tomm.