David Cummings on Startups

Category: Corp Culture

  • Team Members Scaling From Front Line to Executive

    When a company is just getting started it’s critical to get ‘A’ players on board that are excited to roll up their sleeves and do whatever it takes to be successful. As the startup grows and matures, one of the most difficult things is developing the early team members to scale as the business scales. It’s super tough to go from front-line team member to an executive managing a fast-growing department.

    Here are some items to look for in team members that aspire to scale as the business scales:

    • Executive presence – a level of confidence and professionalism that reflects strongly on the company
    • Penchant for bigger-picture thinking – getting the job done is great but successful executives need to be thinking about long-term strategies, metrics, and ways to improve
    • Strong communication skills – in-person discussions, team meetings, and conference calls should be productive and facilitated in an effective manner (great public speaking skills are a nice bonus)

    As team members express a desire to scale with the organization, set proper expectations and ask hard questions regarding their ability to deliver as an executive at the next level.

    What else? What other thoughts do you have on team members scaling from front line to executive?

  • Organizational Health as the Next Corporate Frontier

    Yesterday I started reading The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni, one of my favorite authors. So far, it’s another must-have book in an entrepreneur’s collection.

    Lencioni uses the term “organizational health” and explicitly says he doesn’t like the term “corporate culture” because it’s over used. I disagree. He uses the subtitle “Why Organizational Health Trumps Everything Else in Business” and corresponding book content is nearly identical to my favorite saying that corporate culture is the only sustainable competitive advantage completely within the control of the company.

    Another interesting point he makes is that management teams are so strong, on average, with strategy, operations, marketing, etc that those are much less of a differentiator than they used to be. Talent is still extremely important but for companies of size the managers are good enough in the main functional areas. Now, the real differentiation comes from organizational health and the softer, internal people side of the business.

    I’m looking forward to reading more of the book and can already recommend it to entrepreneurs that believe a strong corporate culture is critical to success.

    Note: The Six Critical Questions for Every Entrepreneur.

  • Corporate Culture Book

    An idea we borrowed from Zappos several years ago is a corporate culture book. The book is a physical manifestation of our culture that sits prominently in our lobby on an ornate wood pedestal. In the book we’ve documented the history of things like Free Food Friday, inside jokes, and other aspects of the business so that new hires can get a better understanding of why we do the things we do. By being so visible in the lobby, it sets the tone for everyone in the office that corporate culture is out top priority.

    Here are some quick details on a corporate culture book:

    • Have all stories in the book come directly from employees
    • Invest in a high quality cover for it
    • Place it in a noticeable position
    • Update it on a regular basis
    • Encourage new hires to read and spend time with it

    A corporate culture book is a fun and powerful way to emphasize the importance of corporate culture.

    What else? What are your thoughts on a corporate culture book?

  • Keepers of the Culture

    Strong corporate culture starts from the top with the co-founders. If the co-founders don’t emphasize corporate culture it’ll take on a life of its own, even more so than it already does. As the company grows, middle management will drive corporate culture if it isn’t pushed from the top, and the outcome can be fine but the only sustainable competitive advantage that’s completely controllable will be lost.

    When a company is starting out it’s important for the co-founders to interview and approve every new hire. Only A players hire A players. As the company gets larger, around 100-200 employees, it becomes much more difficult for the co-founders to be involved in all the hiring. At this point designated Keepers of the Culture should already be trained and at least two should be in every hiring process — exclusively assessing corporate culture fit.

    How do you train Keepers of the Culture? Easy, get them involved in the hiring process at an earlier stage in company growth and have them interview a significant number of potential hires and compare cultural fit with the notes from the co-founders. Only after the Keepers of the Culture and the co-founders opinion match 100% of the time are the Keepers of the Culture ready to carry the torch forward, and train future Keepers of the Culture.

    What else? What are your thoughts on Keepers of the Culture?

  • Interviews Where Only One Question Matters

    A month ago I was talking to an entrepreneur about corporate culture and the interview process. He said that he knew of an entrepreneur that would ask a bunch of questions during the interview process but only cared about one of them. There was one single interview question that decided the majority of the hiring process. I asked if he remembered the question, but he didn’t.

    The mere idea that an interview where only one question matters got me thinking. For us, we ask a number of interview questions and there are only three that really matter, each aligned around one of our core values. Could we do it in one question? Yes, one question accounts for the majority weight of the three important questions, and gets us pretty far, but would leave us short of our current success rate.

    Our interview process is designed to find candidates that fit our corporate culture (#1), are smart, and get things done. Joel on Software articulates the smart and gets things done idea nicely. The next time you are interviewing someone, ask yourself what your three most important interviews questions are and why. You might surprise yourself.

    What else? What interview questions matter most to you?

  • Stronger Startup Cultures Take Longer to Hire

    Recently a team member was lamenting about how long it was taking us to fill a position. We had interviewed a number of qualified candidates, some even getting to the final stage of the process. Internally, I had to keep reiterating that these candidates were very strong but not perfect for us. Frustrating? Yes. The right thing to do? Absolutely.

    The stronger the startup’s corporate culture the longer it takes to hire the right person.

    The difference between a perfect fit and a good fit culturally is enormous. Every person that’s hired either makes the culture stronger or weaker — there’s no in between. Peter Drucker said it best: culture eats strategy for breakfast!

    Longer to hire means longer to find the right candidate, on average, and not a longer interview process. When the right person is found, strong corporate cultures know it and act fast. When the company moves quickly with an offer to a great fit, it makes a strong statement with the candidate.

    What else? Do you agree that stronger startup cultures take longer to hire?

  • Ted Turner’s Scrappiness with Re-used Postage Stamps

    One of the reason’s startups are successful with limited capital is taking the Moneyball startup approach and being scrappy with resources. When I think of scrappy an example from Ted Turner’s autobiography Call Me Ted comes to mind. Turner was in the process of getting the TBS Superstation off the ground and it was novel to have a local station broadcasted nationally.

    Without having the brand recognition of a CBS or NBC, traditional advertisers balked at advertising so he had to do direct response marketing on his own dime. As an example, a company would pay $20 per widget sold, so he’d make the ad and sell the widgets, even doing the payment collections.

    Many payments were by individuals sending checks in the mail. Oddly enough at the time, the postal service didn’t always cancel the stamps on the envelopes (e.g. the little black ink lines on top of the stamp to designate that it has been used). To save money, they’d take the non-cancelled stamps off the letters and re-use them for their letters. Now, there are some ethical questions about that but it captures the spirit of a startup being scrappy.

    What else? What are some other ways startups are scrappy?

  • V2MOM Planning Process for Startups

    In Marc Benioff’s book Behind the Cloud he talks about the V2MOM planning process he used at Salesforce.com to grow it into the largest SaaS company in the world. The goal with V2MOM is to create alignment from the CEO through to every front-line employee. V2MOM represents vision, values, methods, obstacles, and metrics.

    A key aspect of V2MOM is that it is done at the corporate level, each department, and each individual. Here are more details of each:

    • Vision – big picture idea for the next 12 months
    • Values – the main 3-5 values for the company
    • Methods – specific tactics to achieve desired goals
    • Obstacles – openly talk about things that are working against success
    • Metrics – key performance indicators

    Again, these five items are addressed by every level and every individual in the organization. Building alignment in a startup, especially as it achieves significant economies of scale is difficult. The amount of communication required grows faster than headcount. V2MOM is a great approach to addressing alignment.

    What else? What are your thoughts on the V2MOM planning process for startups?

  • Results Only Work Environments (ROWE) for Startups

    Today’s EO Accelerator quarterly education day was on people and more specifically accountability. As part of the material there was a lengthy discussion on results only work environments (www.goROWE.com). ROWE is the idea that results are what matter, not people being in the office from 8am – 5pm daily.

    Here are some tips when considering a results only work environment for startups:

    • Start with one telecommute day per week for everyone in the office and work through the kinks of everyone being able to work remotely (e.g. laptops, phones, etc)
    • Define the results for every position (the result for some positions is very simple like greet visitors at the front desk between certain hours whereas for others it can be more difficult)
    • Implement a no vacation tracking policy (e.g the policy is two words: be reasonable) as a baby step to ROWE
    • Make meetings optional and see who goes and doesn’t go as a proxy for the quality and value of the meetings
    • Work with one department to be ROWE before rolling it out to everyone else

    ROWE is continuing to grow and expand with startups being one of the best places for them.

    What else? What are your thoughts on results only work environments for startups?

  • Topgrading Interviews in a Startup

    Hiring a person that doesn’t work out hurts growth, profitability, and morale. For certain positions the outcome of a bad hire can be much worse. One method of interviewing that has a high degree of success is known as Topgrading (book on Amazon). The book is a massive tome that covers many excruciating details and is worth skimming. Overall, the concepts and methodologies are sound and should be understood by entrepreneurs.

    Here are some general comments on Topgrading interviews and process:

    • Much more time and thought should be put into the hiring process. If you’re going to potentially spend thousands of hours with a person, shouldn’t you spend more than an hour or two interviewing them?
    • The core tenet of Topgrading is the chronological in depth interview. Start from college, regardless of stage of career, and ask deep probing questions of the college experience as well as each job. Find out how the person thinks and why they moved from position to position.
    • For each and every single job, ask about the following:
      Job title
      Start and end date
      Starting and ending compensation
      Roles and responsibilities
      State of affairs when joining
      Results and accomplishments
      Mistakes and failures
      Most enjoyable and least enjoyable aspects of the job
      Circumstances that led to change of jobs
      Manager name and phone number
      Manager strengths and weaknesses
      What manager would say about candidate’s strengths and weaknesses
      Names of direct reports, their strengths and weaknesses, and rate them A through F
    • After the jobs review sections ask questions about the following:
      Analysis skills
      Judgement/decision making
      Creativity
      Continuing education
      Integrity
      Organization/planning
      Independence
      Stress management
      Interpersonal competencies
    • Plan on three to fours hours for this interview and take breaks every 90 minutes

    Topgrading is great because it forces much longer and more detailed conversations to not only understand a person’s background but to also understand more of the how and why as opposed to just the what.

    What else? What do you think of Topgrading interviews in a startup?