Know thy Culture
One thing common between the companies that endured for a longtime is that they had a clear mission that is unique to them. Great companies are built around strong morals, ethics, beliefs and values that everyone working embodies. Products change, positioning changes, but the values never do. There are tons of articles and discussions about how to build a great product and the awesome marketing techniques, but no one really talks much about culture. It’s partly because culture is hard to measure. More importantly, culture doesn’t pay off in the short term. Culture makes you hire people slowly and think twice about people you are hiring. If the idea is to build a company for short term, culture is nothing but hindrance.
Speaking of great companies and their culture, Airbnb had their core values put together even before they hired anyone. One of the core values of Airbnb is “Champion the mission”. Brain Chesky interviewed more than 300 engineers that they hired. That’s hundreds of hours spent in interviews. One of the questions he customarily asked them was, “If you had a year left to live, would you take this job? Why?”. There is a job and then there is a calling. You want to hire people who’s calling is to build your product.
It’s hard to hire great people. It takes time, effort and skill. If it was as easy as just going through a few profiles and picking someone, everyone would do it. But, everyone doesn’t have great employees, do they? A few examples of the rigor that successful companies go through to bring these awesome people together :
- Airbnb took 5 months to hire its first engineer. The reason being that the first engineer sets the DNA for the entire engineering team that’s built. The idea was that if a company becomes successful, you are going to have 100 people just like him. Would you want to work with hundreds of people like that?
- Google known for its culture and acing the best place to work for almost a decade now takes on an average of 8 interviews to hire a candidate inspite of how big the company is. Please note that the risk encountered by a huge company of that size by making a hiring mistake is not as expensive as a company that has a little more than 50 people.
- 37 Signals, which is now Basecamp, a completely bootstrapped billion dollar company only hires people on references. The logic being great people know other great people.
A company is just a set of people working towards a shared vision. The most important job of a CEO they say is to articulate this vision to the employees. Whether you are hiring, speaking to an investor or writing an email to your customer, reiterate that vision. That’s how you induce the vision and motivate employees around you giving them more reason to work with you than their paycheck every month.
Culture. What is the definition of culture you ask?
Everyday ==A== and ==B== of each member of the team is in pursuit of our company ==C==
(A) Assumptions, beliefs, values and core values
(B) Behaviors, actions
(C) Goals, BHAG (Big Hairy Audacious Goal), Mission
This is what you want : Everyday core values and actions of each member of the team is in pursuit of our company mission.
Culture is a set of core values that everyone in the company strongly belives in and adheres to. Culture is the DNA of a company. Culture starts with the founders. Founders are the parents and the children are the employees of the company. The child will manifest in many ways the behaviours that parents have when they are working together.
These aren’t a set of quotes hung around walls for everyone to see and woo. These are values based on which one can be fired, completely divorce from how skilled he/she is. It might sound generic, idealistic and easy to coin or pick a few words from the dictionary that you think can represent the company. In reality, values take months and a great deal of effort to identify and even more to abide by.
Consider a core value to be teamwork. Now, you can shoo me away by saying every company wants a team player. So, what does it mean as a core value? It’s deeper than that. There are a lot of smart people in this room and let’s figure out the solution to a problem. Now, people start ripping each other apart as to who’s right and who’s wrong. But, it’s not about an individual’s interest but the company’s that is important. You need people who put the company’s interest ahead of their own. You need people who can help each other to solve a problem for the company and the mission.
Taking Zappos as an example, they have a no jerk policy. Anyone who is aggressive is fired. There simply is no tolerance to people who are aggressive. It takes a great deal of courage to fire people based on these grounds especially if it turns out to be a person who is highly skilled and valuable to the company. But then again, this is what makes a company exceptional. There are no compromises no matter what. Bringing this into context, if a company fires an employee, it’s not simply a mistake of the employee. It means that the company has a loophole in it’s hiring process. It means the manager who the employee reported to couldn’t motivate/teach/inspire the employee enough to make a successful candidate. It also means the manager’s manager was incapable of noticing the failure of the concerned manager. It’s a compound function that goes right up to the top. In retrospect, firing an employee means more to the company than to the candidate. Hence, a culture fit is a crucial part of the interview process. Get people from other departments to evaluate the engineering interviews so they aren’t biased about the skills. You will have to say no to a lot of people. But, this will pay off in long term. You can have the smartest engineer in the world but they won’t be putting their heart and soul into building a product if they don’t believe in your mission. You need to evaluate culture even as part of the performance of your employees.
Culture isn’t about chairs, laptops and vases. Turning the office walls green doesnt bring in culture. If it is done, every employee in the company needs to know why it’s turned to green. What does the green represent? Culture is about doing things that represent core values and not the other way round.
Why does it Culture matter?
The easiest way to evaluate complex problems is to break it down into smaller problems that can be solved by the first principles. Culture is that first principles you need when you hit a major roadblock that you don’t know how to solve for.
If your company is a boat, the people rowing it are your employees. You can’t have each one of them rowing in different directions to reach the same destination.
A startup is inherently bound to go through a lot of ups and downs. You need people who believe in your mission and maintain that stability when things aren’t going the way you expected them to.
Culture gives your employees work more meaning than the salary received. When they receive another offer from a competitive company, they are not going to stick with you for what you pay them but for how you made them feel.
For all the data driven people, to drive the point home, comparative stock market performance of the fortune top 100 best companies to work for stood at 11.08% where Russell 3000 and S & P companies stood at around 6%
For all the pictorial kind, the following are the five dysfunctions of the pyramid mentioned in “The five dysfunctions of a team”
You need innate trust within the team. Having this trust enables you to have raise conflict that is healthy and constructive. Once you raise conflict, you get people to commit. Taking accountability on the things committed lead to successful results.
Another interesting fact is that Culture and Brand are two sides of the same coin. Brand is the promise that users buy and the promise is nothing but the core values paraphrased. Companies that hire passionate people are the ones that gain the users that buy your products religiously and share a much deeper connection with. People buy products from Apple because they trust in them. It’s known for the perfection it stands for. If you’ve observed, their marketing and brand isn’t focused on the features of the product or the number of people using it. Think Different : It’s about their core values. It’s the feeling that one has using the product for which they buy it for.
How to think about your culture?
These are the questions to ask oneself to guide you through developing a culture :
(1) As a leader, what personal values are most important to you?
(2) What are the most important values for business success?
(3) What values will you look for in employees?
(4) What could never be tolerated (consider the opposite as values)
(5) Remember to incorporate your mission into your core value
Think of all the people that you liked working for/with? What are the values that they possess? On the flip side, think of all the people that you didn’t like working for/with, what are the values that they possess? This gives you what you want your employees to do and not to do. What not to do is more important for what to do is numerous. All these have to be credible and uniquely tied to the company. The values have to support the mission. If they don’t support the mission, you are missing something.
Why is it important to hire a smart team?
A company wants to draw inspiration from global businesses and pit themselves against the outstanding market leaders. What you are missing out is the fact that great companies are built by great people. It would be a miracle to build an extraordinary company with ordinary or mediocre people barring the exceptions. If the objective is to build the best product in the world, you need to hire the best in the world. If you can hire the best person in the world, would you hire this person sitting across the table? What comprises of great people?
Once you hire them, the way to bring out the best in people is to challenge them. You need to hire people that are so talented and skilled that you need to be intimidated by their sheer talent. By just being around them, you know that you need to raise your game to match up with them.
A company is most efficient when its employees are most productive. An employee is most productive when he is happy in life. He is happy when he does something he is passionate about and truly believes in. Hence the focus on employee happiness by most companies. Now, how can employees be happy when they are just doing what they’re being told. Have you thought about what are the policies and channels that the company is enforcing to hear the voice of an employee?
Finally, I would like to leave you with a quote by Richard Branson that I strongly resonate with.
There’s no magic formula for great company culture. The key is just to treat your staff how you would like to be treated.