Engineering Serendipity

Why do some parties, companies and cities work, while others don’t It takes some social engineering to foster serendipity and creativity.

“You want to get all these creative people in a statistically small space,” says Tony Hsieh, who built an effective company culture at Zappos.com, an online vendor of shoes and apparel.

If that is the goal, it is another argument for Yahoo’s decision to ban people from working from home. “We allow some people at Zappos to work from home, but we don’t want them to,” Mr. Hsieh says. “We want them to come in to work.” Part of his job, he says, is creating an environment where they would rather be.

Mr. Hsieh sold Zappos to Amazon.com for $1.2 billion in 2009. He continues to run it. He is also testing the lessons he learned in building Zappos in an effort to revive downtown Las Vegas, which is near Zappos’s headquarters.

Both company building and community construction, he says, are like good prties. “I was always interested in flow, and how to get people not stuck into always talking with the same people,” he says. This might involve changing the entertainment, moving the bar over the course of the evening or designing the room so people move through different-size spaces.

The overall idea is to make people encounter strangers in a way that creates a sense of connection, something he instilled at Zappos. “I wanted managers to spend 10 to 20 percent of their time outside of the office, leading the team,” he says. Dinners, hiking and other encounters with colleagues increased productivity by a range of 20 percent to 100 percent. “There was more trust, better communications, more use of shorthand in e-mails, because people weren’t afraid of miscommunication,” Mr. Hsieh says.

Likewise, offices were kept dense so people would bump into each other more. “When someone moves twice as far away, it’s exponentially less conflict,” he says. “The parking lot was behin! d the building, and we made people walk around from the front.”

Staying physically close may be part of Marissa Mayer’s plan to end working from home at Yahoo. Google, the company she comes from, is known for tight offices, frequently with three people in what normally would be space for one. This used to be ascribed to cheapness, or morale building, but it may be an effort to bolster productivity.

Mr. Hsieh’s effort to make these principles work for a decaying city is called the Downtown Project. In addition to financing start-up companies in the same buildings, he has opened an office where people will have to walk two blocks to their cars, so they are on the street with other people. The Downtown Project staff is moving into the Las Vegas City Hall, which is dismantling its air-cooled sky bridge so people meet other workes and townspeople in an outdoor plaza.

The apartment building he lives in, near downtown Las Vegas (historically a more tawdry and luckless place than the glitzy strip), has lots of other people from Zappos, start-ups and the Downtown Project. The building also has a number of extra places for potential investors and hires to stay a few days. Hanging around, he says, is its own recruiting tool.

Mr. Hsieh was speaking to entrepreneurs and investors at a Montgomery & Company conference in Santa Monica, Calif., hoping to attract interest in downtown Las Vegas or in similar projects elsewhere.

“The idea is to create collisions, co-learning and community,” he says. “It’s something repeatable that any city can do. You don’t have to have a sports team or a big university like Harvard or Stanford.”