Culture is the New Currency and Other Insights From People Leaders
Learnings from Madrona’s inaugural HR Summit
Everyone knows that talent is a startup’s most important asset and at Madrona we work to help our companies create the culture and practices that attract and retain talent. To that end we held our first Chief Human Resources Officer (CHRO) Summit in October. We brought together HR execs at our portfolio companies to be inspired and learn from each other. We featured a fire-side chat with Betsy Sutter, the long-standing Chief People Officer at VMware and Strategic Director at Madrona. Access to extraordinary talent like this gives the Madrona Talent team a unique perspective on startup culture.
I like to ask our entrepreneurs what they worry about most. Funny thing is, I already know the answer. Without fail, they want to know how to compete with Amazon and Microsoft when those companies are paying top dollar for top talent. I remind them, it’s not just Amazon and Microsoft in your backyard, it’s also Facebook, Google, Lyft, Uber, Snowflake, Alibaba and the 100 or so other companies establishing remote engineering centers in the Pacific Northwest. The answer from our CHRO Summit was clear — make culture your new currency.
I recently learned at a Talent 42 Conference that companies need to compete in at least one of four areas if they want to hire top talent.
1) Money
2) Technology
3) Mission
4) Team
Startups already know they can’t compete on cash. Sometimes technology can be tough to differentiate as it seems like everyone is utilizing similar technologies and baking in buzz words like artificial intelligence, machine learning and blockchain in their every-day vernacular. The key to success is building a phenomenal culture by doubling down on your mission and team and clearly articulating the value of both. This is where culture becomes your currency and you out-compete companies like Google for top talent.
So how do you turn culture into currency? According to Betsy Sutter, “executives are looking more and more at culture. It’s all about people and building a culture that performs.” Betsy’s own experience has proven that culture can be a huge draw for talented people. VMware is #39 on Fortune’s 100 best places to work list. “When you have 23,000 employees talking about culture, that conversation makes its way outside the company. Now those people want to come inside and be a part of that culture too.”
Diversity, equality and inclusion have become a core tenet of the culture conversation. The issue of DE&I became popular when companies came under pressure to release their diversity numbers. The push for more transparency has led to improved conversations and better outcomes, although there is far more work to be done. Betsy Sutter believes diversity is quantitative and inclusion is qualitative. “We’re not leading with specific goals. Our focus is on strategy and the overall plan for improvements. We want to increase the percentage of women at all levels of the go-to-market, technical and business functions. To do this, we’ve created dashboards that track hires, promotions and attrition so we can understand trends.”
She adds that simple changes can lead to the biggest improvements. “We found a very simple way to improve diversity. By creating a diverse interview panel, the odds of hiring a diverse candidate go up dramatically.”
Another issue addressed in the discussion with Betsy is the need for the CHRO to have not only a strong understanding of the business and industry of the company, but also a strong point of view on the topics that matter. HR leaders need to have a strong voice and use it.
Being an HR leader means you are a business leader and business leaders understand the business. “I manage a lot of money for the company. I need to understand the business and show that I have a command for the business. I do this by making sure there is very little daylight between the CEO and myself, so I can operationalize the vision and strategy. I understand cloud computing, end-user computing and other business levers. This is not an HR point of view, this is a business point of view with people top of mind.”
Madrona’s Director of Talent, Shannon Anderson, talked about having a point of view and expressing it — even if it’s not invited. Betsy agreed. “I would encourage each and every (HR leader) to find your voice. It’s been empowering for me to think about what I can recommend. What’s my point of view? How can that point of view lead to better conversations?” Recommendations here are to be bold, talk through the role of the HR leader or people leader in running the company, create a tight partnership with your CEO. This resonated with me deeply as I think at some point along the journey, everyone can relate to this wisdom.
I’ll sign off with one last quote from Betsy, “with how complex things are now and how messy people are now, there’s no other time I’d like to do this work than now!”
