Earlier today I had the opportunity to spend some time at the Kabbage office in Atlanta and the energy was electric. As I entered, several people walked by smiling, and enjoying each others’ company. Walking in the kitchen, a number of people were sharing stories while exuding a warm vibe. Culture starts with the core values and permeates through all aspects of the business.
Here are a few thoughts on the energy of a culture in an office:
- There’s no one right or wrong culture. Some are formal and some are laid back. Some are silly and some are serious. What matters is that everyone is aligned and buys into the core values.
- Office environment, style, color, and layout either augment or detract from the culture. Visual cues matter.
- First impressions, like the receptionist at the desk, set the tone.
- Subtle things like the way people decorate their desks and leaving private office doors open or closed are important.
We’ve all walked into offices that have made us happier and offices that have made us more depressed. Energy of a culture in an office matters and it’s important to be intentional about building the best one for the startup.
What else? What are some more thoughts about the energy of the culture in an office?
When a startup hits the scaling phase and starts hiring a significant number of people on a regular basis, one of the best things to do is to hire an internal recruiter. At Pardot, we actually hired several full-time internal recruiters well before we hit 100 employees as we saw our fast growth continuing indefinitely. Here are a few benefits of internal recruiters:
- Internal recruiters learn the culture and core values inside and out
- Internal recruiters get to know the team and hiring managers such that they can better align candidates with positions
- Internal recruiters are only focused on their own company (as opposed to being split across different companies)
- Internal recruiters can build a future pipeline of candidates well in advance so that when the next milestone is achieved, or funding round secured, the time to getting great new hires on board is significantly reduced
Hiring internal recruiters early on in the scaling process can make a huge impact on the business. Entrepreneurs would do well to engage internal recruiters earlier than expected.
What else? What are some more benefits of internal recruiters?
One of the challenges most entrepreneurs face is building a culture of accountability. As much as we want everyone to own their results, most employees can’t answer the three basic questions (who’s my boss, what’s my job, how do I know if I’m doing well). After many years of trial and error, here are the six steps I’ve learned to build a culture of accountability:
- Start by answering the three basic questions for every employee
- Decide on 3-5 operational metrics with goals that each employee owns and reports on weekly (e.g. story points, calls made, appointments set, marketing qualified leads generated, customer satisfaction scores, billable hours, revenue, etc.)
- Review the employee’s day-to-day/week-to-week work at a daily check-in or weekly team meeting along with their metrics
- Provide a central system (like a Google Sheet KPIs Dashboard) for each department with everyone’s metrics so that there is peer accountability and visibility
- Analyze the personal goals on a quarterly basis as part of the quarterly check-ins
- Tie everything together with the Simplified One Page Strategic Plan and help each employee understand how their goals align to the company’s goals
While this process seems straightforward, very few entrepreneurs actually implement this type of system. Why? It’s requires a tremendous amount of ongoing leadership and management, and most entrepreneurs don’t understand the value. The next time an entrepreneur expresses interest in growing faster and scaling more efficiently, ask them about their existing culture of accountability.
What else? What are some more thoughts on these six steps to build a culture of accountability?
Katie Burke tweeted out a great list of questions from David Ogilvy in 1968 as a guide for Ogilvy & Mather managers worldwide. From the piece:
There are five characteristics which suggest to me that a person has the potential for rapid promotion:
- The person is ambitious.
- The person works harder than their peers — and enjoys it.
- The person has a brilliant brain — inventive and unorthodox.
- The person has an engaging personality.
- The person demonstrates respect for the creative function.
Just like in 1968, this list holds true today, especially for entrepreneurs.
What else? What would you add to the rapid promotion list?
Back in the early Pardot days we defined our core values as positive, self-starting, and supportive. These values were used extensively in our hiring process, quarterly check-ins, and the day-to-day running of the business. Only, we had an arch enemy competitor that was cut-throat, aggressive, and, generally, the antithesis of our style. Yet, both companies were wildly successful.
HBR has an article up titled Proof That Positive Work Cultures Are More Productive where the author cites data supporting the Pardot-style as being more productive. Yet, organizations like Oracle are well known for their aggressive culture, while still being incredibly successful. How can cultures with completely different styles be so successful?
The answer: whatever the culture, it needs to be cohesive throughout.
If some people are cut-throat and inconsiderate while others are positive and self-starting, that’s going to be a challenging culture. If everyone is cut-throat, and that culture is cohesive, it’ll be able to succeed. A popular business book titled The No Ass Hole Rule, which argues bullying behavior hurts morale and productivity, cites Steve Jobs as a prime example, but we know how successful Apple became under his leadership. Apple has strong values and a cohesive culture.
There’s no one “right” culture — there are too many different, successful companies with varying cultures. What’s important is that entrepreneurs make a focused effort on building a great culture that’s cohesive and strong in their own style.
What else? What are some more thoughts on differing corporate cultures and success?
Continuing with yesterday’s post on The Great Game of Business for Startups, the author has an excellent Huddle Checklist on his site. While a few of the items are dependent on the type of culture and work environment (e.g. a focus on leaving fired-up isn’t common), most are broadly applicable.
Here’s the Huddle Checklist:
- Meetings are frequent and on time.
- Communication revolves around The Critical Number, the numbers that drive the business, and the stories behind the numbers.
- Communication is fast-paced and to the point.
- Communication is forward-focused — highlighting risks and opportunities.
- People arrive prepared.
- People openly and candidly share both wins and losses.
- People freely commit to helping each other succeed.
- Learning is emphasized.
- Questions are encouraged, complaints are discourages, and assumptions are challenged.
- Contributions and successes are recognized and celebrated.
- There is clear accountability and follow-through.
- People leave with a clear line-of-sight between what they do every day and the financial outcomes of the business.
- Please leave focused on, informed about, and feeling included in the business.
- People leave committed to an action item that will improve the score.
- Please leave fired-up and energized.
Every entrepreneur would do well to ensure that most of these checklist items take place during internal meetings.
What else? What are some more thoughts on the Huddle Checklist?
Earlier today an entrepreneur reminded me of an excellent business book that doesn’t get mentioned often enough: The Great Game of Business – Unlocking the Power and Profitability of Open-Book Management by Jack Stack. The author shares his stories of growing a successful business and emphasizes how educating team members on all aspects of the business (not just their area of focus), combined with transparency and open book management, results in a more aligned and committed team. Of course this makes sense, yet too many CEOs think it’s beneath them to spend so much time on these “softer” aspects of the business.
At Pardot, we worked hard to educate our team and provide an open book environment. Here are some of the things we did:
- Paid for financial literacy programs for our employees
- Mounted an LED Scoreboard on the wall for everyone to see our current revenue and other critical metrics (even guests in our lobby could see all our data)
- Rolled out our updated Simplified One Page Strategic Plan every quarter so that goals and priority projects were clear and documented
- Constantly refined our meeting rhythm and worked hard to over communicate
While open book management makes many leaders uncomfortable, we found tremendous success empowering our employees with as much information and communication as possible. For entrepreneurs interested in learning more, check out the The Great Game of Business.
What else? What are some more thoughts on extensive transparency and employee education in a startup?
Josh Bersin of Deloitte has an excellent presentation up titled Building the Irresistible Organization.
One of my personal interests is around creating an environment for great work, including the people, environment, and culture. Josh’s ideas are some of the best I’ve seen. Here’s his integrated approach:
- Selection to Fit
- Small Teams
- Time for Slack
- Agile Goal Setting
- Coaching & feedback
- Leadership Development
- Modernized Performance Mgt.
- Flexible, humane work environment
- Recognition rich culture
- Open flexible work spaces
- Inclusive, diverse culture
- Facilitated talent mobility
- Career growth in many paths
- Self and formal development
- High impact learning culture
Trust in Leadership
- Mission and purpose
- Investment in people, trust
- Transparency and communication
Want to build a great company? Find product/market fit, a repeatable customer acquisition process, and build a simply irresistible organization.
What else? What are some thoughts on a simple irresistible organization according to this integrated approach?
As mentioned in yesterday’s Video of Week: Reed Hastings on Netflix, Netflix published one of the most powerful culture manifestos ever seen in Netflix Culture: Freedom & Responsibility. With 124 slides, it’s comprehensive, but not overwhelming.
Here are notes from the Netflix culture deck:
- Seven aspects of the culture
- Values are what we Value
- High Performance
- Freedom & Responsibility
- Context, not Control
- Highly Aligned, Loosely Coupled
- Pay Top of Market
- Promotions & Development
- Values the following nine behaviors and skills
- Adequate performance gets a generous severance package (meaning, people that are OK get fired)
- A team, not a family
- The Rare Responsible Person
- Self motivating
- Self aware
- Self disciplined
- Self improving
- Acts like a leader
- Doesn’t wait to be told what to do
- Picks up trash lying on the floor
- Netflix Vacation Policy and Tracking – there is no policy or tracking
- Netflix Policies for Expensing, Entertainment, Gifts & Travel: Act in Netflix’s best interest
- Managers: When one of your talented people does something dumb, don’t blame them. Instead, ask yourself what context you failed to set.
Anyone that cares about culture, or is working on establishing a strong culture in their startup, should study the Netflix culture deck.
What else? What are some more takeaways from the Netflix culture deck?
At Pardot we noticed that many of our team members were asking questions about whether or not to put money in the 401k plan (which even had a company match). Then, as other financial questions came up, we realized that there was a real financial literacy challenge in the company, and, no, not just with the millennials.
To help, we hired a financial literacy coach that met individually with everyone interested and taught a six week course exclusively for employees during work hours (every Friday at 1pm). In fact, the first program was so successful that we did it again a second time. Pardot paid directly for the program and the financial literacy teacher didn’t sell any products or services.
Here are a few thoughts on financial literacy in startups:
- While many people focus on big exits and love to talk about the future value of equity, the reality is that the financial basics aren’t well understood
- Financial literacy can help people for the rest of their life by helping them make better financial decisions
- More investment in people, especially to help them at a personal level, endears them to the company
- Company benefits come in all forms and aren’t just related to good insurance and free food
Financial literacy is a real challenge and startups have the opportunity to help educate their employees. For many people, it’ll make a profound difference.
What else? What are some more thoughts on financial literacy in a startup?