Why Company Culture is the CEO’s Number One Priority [Podcast]
I recently appeared on a podcast alongside Rob Villeneuve, CEO of Rebel, talking about the importance of healthy company culture. You can see the entire conversation in the podcast video below.
For the purposes of this blog, I’ve edited the transcript down to include just my comments, and shortened those comments for brevity.
Host: So next question goes to Marc. To quote you from the Startup Podcast, you said, “Culture is one of the most important things a CEO should focus on.” As CEO of Routific, how are you leading the way in company culture?
Marc: I still believe culture is one of the most important things a CEO should focus on. I’ve heard from many founders that have gone through aggressive growth, but couldn’t realize the full potential of the team because the team just wasn’t cohesive. The culture wasn’t something that everybody shared.
I think company culture can be very easy. The way to lead that would be to just be yourself. I view culture as a lifestyle, not necessarily a thing that you do once; set it and forget it. It’s not necessarily the mission statement or the values that you write on the wall — values nobody really reads or understands because it’s ambiguous.
I view culture as a lifestyle. Show up to work, be your silly self, and culture will happen.
At Routific all our company core values are set from the bottom up. We were lucky that all our founding team of 12 employees had many shared core values and everyone’s beliefs aligned really, really well. We live by those core values day by day. It’s a matter of talking about them, it’s a matter of referencing them whenever you make decisions.
To give you one example, transparency is one of the top core values that our team chose. Once you know that it, becomes really easy to make decisions such as sharing the finances with the entire team. You’re just being transparent. You’re living by your core belief. Everyone on the team knows exactly how much money we have in the bank, how many months we have left before we run out of money, what the next target is, and how close we are with that revenue target. If you think about it as a lifestyle, you live it. Show up to work, be your silly self, and culture will happen.
Host: Tell me how trust and compassion come into play in the workplace.
Marc: I think it’s about getting personal. Showing up to work where you can be yourself. It’s hard to be compassionate if people show up to work with their work face on, right? And you don’t really get to know the real person behind that. So we focus on creating a culture where we are all friends and we get to know each other as friends. And when you really do that, you get to know about your personal struggles and show compassion that way. I think it’s really hard not to have that kind of openness and transparency and be compassionate at the same time.
It’s about getting personal. Showing up to work where you can be yourself. It’s hard to be compassionate if people show up to work with their work face on. Right?
Creating a safe environment is key. In fact, Google did research about all the different teams at one point- where they measured the effectiveness while measuring the attributes of the team so it would be like: the collective IQ, diversity, and psychological safety. And it turns out that psychological safety was the key determinant to a team’s success. It’s about being able to say whatever’s on your mind without the other person judging you. And taking the actual message for what it is.
You need to really build that trust between your team members first before you can be that direct with one another. Remember how you’re taught to give feedback during those communications workshops in school? Have you heard of the Hamburger Model? Start with something positive, then you get to the “meat” of it, and you end with something positive again. So “This was a great job on this John… but this part could be done better… but in general, you’re awesome. You’re a good guy!” Why not just cut the crap and go straight to the meat? Right? That’s much more efficient. But you can only do that if you have built that trust already. So building trust initially with your team is required, and then you can have a very open, psychologically safe environment that’s going to be super healthy.
Rob: So Marc — did this start with you having a thick skin?
Marc: A thick skin? What do you mean?
Rob: I mean, if you’re going to live this example, and I think this is true of myself so I kind of throw it to you — if you’re going to ask people to remove the needless compliments before and after, the person that they come after the most is the CEO. So I was just wondering, if you on the other side have to practice not taking it personally?
Marc: Yeah. I guess so. I mean my wife does call me a Vulcan. So I guess that implies that I have a thick skin.
Host: That’s awesome…So how do you make sure your employees are working in a compassionate environment while [the startup is aggressively] growing?
Marc: Startups in nature are not always about aggressive growth. I think that is something we hear about in the media, but it’s selection bias, right? You only hear about the ones that really take off and the ones that really blow up, big time. You don’t hear about 99% of other startups that are actually struggling to survive and actually building a long-lasting company.
I think aggressive growth itself is a choice and it is a choice that affects your culture. Like Rob said, if your team does not gel with that aggressive kind of culture, then they’re going to burn out. They’re going to leave. And you’re going to have turnover. And you’re going to have problems. I would also add that aggressive growth is something that a lot of Silicon Valley startups tend to focus on and they try to add culture later on, after they’ve grown. But I would say that once you’ve gone through that crazy growth trajectory, you have already set the culture for yourself to be aggressive and that growth is the most important thing. To change and shift, and then create a compassionate workplace is going to be really, really hard. Take Uber for example. They’re struggling a lot with their culture because they have already set a clear culture focused on growth. Growth is the number one priority and everything else can suffer.
I think aggressive growth itself is a choice and it is a choice that affects your culture.
Host: Growth at all costs is probably not the greatest strategy for sure.
Marc: It could work. It’s a choice. But it needs to be a conscious choice made by the leadership. Is that really the culture that we want to set?
I think it’s important that your company’s core values gel with your personal values. For example, we have set a culture of efficiency here at Routific. We strive for efficiency in everything we do. Not just the optimized routes that we create for delivery businesses, but also efficiency in the way we run our meetings and the way we built the software. We use this core value to drive decision making. Even in fundraising. So we wouldn’t want to fundraise unless we know how to spend that money efficiently.
And again, to pick on Silicon Valley, they have a reputation of raising a lot of money and just burning it as fast as possible and then not getting anywhere. Some businesses do end up succeeding, but a lot of them don’t. With Routific, I think the work that we do is way too important to just gamble away. In the end, I think it ties back to culture and it ties back to consciously deciding what you think is important to you and your team.
Host: What are some HR policies that you should put in place early on and how would you deal with major life changes of your employees? Like bereavement or pregnancy for example?
Marc: I don’t like that term “HR.” I also don’t like the word “policy” because both of those words conjure up images of bureaucracy. Maybe that’s because we’re still a small team. We move very fast and we make every decision with a healthy dose of common sense. So to answer your question, ‘what do we do if somebody gets pregnant?’ We deal with it with common sense. How would you want to be treated if you were in that situation? We treat each other like human beings. We treat each other like friends would. The traditional HR I’ve experienced — like in my previous life in the investment banking world — ironically has been anything but human.
We move very fast and we make every decision with a healthy dose of common sense. So to answer your question, ‘what do we do if somebody gets pregnant?’ We deal with it with common sense. How would you want to be treated if you were in that situation? We treat each other like human beings.
Host: I love the idea of unlimited vacation time but how can you actually implement that at a startup?
Marc: I think the challenge about unlimited vacation policy is to make sure that your team members actually take vacation. I remember reading an article where the author analyzed a lot of startups that have unlimited vacation policies. What ended up happening was people were taking less vacation at those companies because they felt the peer pressure of “I shouldn’t be taking that much time off” or “This other person isn’t taking any. I shouldn’t be taking any.”
A counterexample to that is “mandatory vacation.” I read another startup that forces X amount of days off per year. You have to go. You’re not allowed to come to the office. You have to take a vacation.
The way we handle it is just by setting an example. So myself and my other cofounders, we make sure that we take our vacation. When we take our vacation, the rest of the team will feel comfortable taking their vacations.
Host: How do you retain talent?
Marc: Have an awesome culture. A ping pong table is part of it. It doesn’t necessarily mean that once a company has a ping-pong table you have culture, though. Culture is a lifestyle. I’ve visited offices where there are ping pong tables but nobody plays on it because then they think they are slacking off. So then that defeats the purpose. It’s just a waste of space at that point.
Rob: I know I keep sounding like a broken record but this all comes back to listening to your employees, giving them the safety to communicate, and when they say something, act on it.
Marc: Well said. I would say sounding like a broken record is almost a necessity because culture is one of those things you so strongly believe in. You automatically keep going back to it in your mind, and you keep saying it aloud.
Host: What are some tools that you have used in your organization to infuse compassion into your corporate culture and into the workplace? And can compassion be taught to new employees or to existing employees as you grow?
Marc: We do retrospectives as well like Rob said. We have a lot of meta-reviews post meetings and post projects where we talk about things go. We also do frequent 1:1 where I just sit down in a room or I take a nice walk around downtown Vancouver and we just talk about anything — anything that’s on their mind, anything that’s bothering them or anything that’s going well. If you have created this psychologically safe environment, during these 1:1s, the important topics will come up and you just listen and I think that’s a big part of being compassionate.
Another tool that we are trying this month is a company retreat. We are actually having our very first company retreat this year. We’re bringing the entire company up to Whistler for three days. We’re all going to stay in a big house together and we’re going to be bringing in a consultant who will be doing a lot of the workshops with the team that will help build trust. We’ve already gone through a similar workshop with the four Routific founders. Now we’re including the entire team so we can experience it together.
Founders tend to be very analytical and if you can’t prove with hard numbers that it’s going to have ROI then it’s probably not worth doing. Culture is one of those soft things that is hard for some super-analytical people to do because they feel like they’re almost above culture in a way.
Host: Is there such a thing as managing difficult people, or is there no place for those kinds of team members?
Marc: “Difficult” is such an ambiguous term. It can be many different sorts of “difficult.” Certain types of difficult you can coach and fix. Other types of difficult you cannot. And it comes back to the core values again.
So to give you a more concrete example… at Routific, we stand for efficiency, transparency, striving for professional growth, and sharing team success. That means putting the team in front of the individual. It’s a reflection of how humble our team members are. So if this “difficult” person is aligned with all of those core values, then you can coach them and they’ll succeed. If they are not, then no matter how much you coach, it’s not going to work. So in that case, just don’t bother. Cut your loses I would say. Definitely try and try to coach them, but get to the bottom of it. Understand really why they are being difficult. Listening to why they’re being difficult will reveal a lot of feedback that will be very helpful for you to improve your organization in general. But when it comes down to the pure misalignment of life philosophy, then it becomes very hard.
Your team is the most important asset to your company. If your team is not running efficiently, your company isn’t running efficiently. How do you make sure that the team is running as efficiently as they can be? It’s culture. It’s almost fundamental if you want to scale up.
Host: What’s one thing that I can take away today that will improve the culture in my office?
Marc: The one thing that any company can try to do first is to decide for themselves whether or not it’s important to them. If you don’t recognize what is really important to you, then you’re going to do these exercises only half-heartedly.
Founders tend to be very analytical and if you can’t prove with hard numbers that it’s going to have ROI, then the thought is it’s probably not worth doing. Culture is one of those soft things that is hard for some super-analytical people to do because they feel like they’re almost above culture in a way. It’s like, “We don’t need that. We can figure it out by focusing on numbers.”
Your team is the most important asset to your company. Most, if not all, founders would agree with that. The team ends up being your engine. If your team is not running efficiently, your company isn’t running efficiently. Your whole business model just breaks down. How do you make sure that the team is running as efficiently as they can be? It’s culture. It’s almost fundamental if you want to scale up.
