Eddie and I getting into a UFC takedown at IRCE in Chicago (June 2010)
I think like most entrepreneurs, we stumbled across our company culture without even realizing it. Back in 2007 we were busy building the Interspire side of the business (our self-hosted software solutions) and had a great team of about 10 people in our Sydney, Australia office (this was a long time before we’d even thought about opening our Austin, TX office). What we were starting to notice though, is that we were intentionally weeding our candidates during the interview process based on our gut instinct.
Eddie and I have always trusted our gut instinct when it comes to hiring, but when I think back to why we were turning people away based on our gut instinct it makes perfect sense – deep down we both already knew the values we were looking for in employees.
Back then the roles we had open were 95% engineering so it was easy to quiz candidates on their tech knowledge (the LAMP stack) because we both have tech backgrounds.
What we didn’t have was recruiting experience, so that’s where our gut instinct stepped in to guide us (and still does, thousands of interviews later).
We did, however, have a set of principles, values and morals which we both strongly believed in and would never compromise. For example, we have always hired based on attitude over technical knowledge. You can always train someone up on the tech side but it’s very hard to change someone’s attitude, which has been shaped over years and years.
One of the things we do immediately after an interview is make an immediate hire or no hire decision. And strangely enough we’ll make the exact same decision 98% of the time.
Besides our eery ability to predict what each other is thinking (I’ll save that for another post), it was clear we shared the same ideas around what makes a good employee. And since expanding our Sydney office, opening our Austin office a few years back and hiring at least 30 new employees in the last year (including managers, support engineers, sales reps, systems administrators, HR, etc), we managed to get on paper (and when I say paper, I mean Google Docs) what’s important to us when not only hiring new employees but also when dealing with people:
A list of what's important to us - these became our company values
These became the foundation for our mission statement and core values, which we added to our website a few months back. We could’ve easily kept these private like most companies do, but by putting them out in public they help us attract the kind of talent we’re looking for – if you feel a deep connection with our values and mission statement then you’re more likely to love working here.
After creating our values, we wanted to create a mission statement that everyone could rally around and be a part of, regardless of whether they were in sales, support, HR, marketing, etc. Our initial attempt was loosely based around becoming the number one e-commerce platform in the world, but this mission statement lacked context. Number one how? Number of clients? Number of features? Most press writeups?
So after a few tweaks and feedback from our employees and advisors, we came up with our current mission statement:
“Be the #1 e-commerce provider in the world by creating and delivering software that changes people’s lives”
“Become” was changed to “Be” and we added an emotional component that we could all really dig our teeth into – “that changes people’s lives”. This part of the mission statement is really important. We don’t just sell a shopping cart. We provide an e-commerce platform that has the power and potential to change people’s lives. They can make more money. They can grow their business. They can quit their job. Whatever it is, it changes their life. Very powerful stuff.
Another really important part of the culture puzzle is making sure your team understands and is measured based on your core values. It’s also important that you and your management team set the example when it comes to your values.
For example, when one of our new managers came on board he (innocently) referred to our clients as customers. During his first few days I’d jump in every time he said customers and would correct him, explaining why we prefer the term clients over customers (a customer is a one-time buyer, a client looks to you as a trusted advisor). He now says clients and does the same thing to his team.
If you don’t lead by example then don’t expect anyone to follow.
So what’s the point of having a company culture anyway? Can’t you just hire a bunch of people and expect them to do exactly what you say? Well, not really. Company culture is the difference between walking into an office and feeling a sense of liveliness or walking into an office and feeling like you’re in a cemetery. It’s the difference between hiring A-players (more on this shortly) and C-players who will run your company into the ground. It’s also the difference between a mediocre result (and therefore company) and an amazing one.
It’s a well known fact that money is NOT the primary motivation for people when choosing where they’ll spend 8 hours a day. The number one reason someone will or will not work for you is your culture. You can pay someone a great salary but if your culture sucks then they might last a year tops. Coming in a close second behind culture is what they’ll spend their time doing, but even an amazing culture can turn a data entry job into an adventure (yes, I’m serious).
Let’s look at two hypothetical companies. The first we’ll call “ABC Enterprises” and the second we’ll call “XYZ Enterprises”. Both are looking to hire a person to perform data entry. Hardly the most fun job in the world. Let’s assume ABC Enterprises has not placed a focus on their culture, so a typical month for this data entry person might look like this:
- Work 9am-5pm Monday to Friday
- Work weekends by yourself and with no appreciation
- Be seen and treated as “just” a data entry person
Now let’s assume XYZ Enterprises has placed a real focus on their culture. A typical month for the data entry person might instead look like this:
- Work 9am-5pm Monday to Friday
- Work some weekends because you know your manager Joe will be there right alongside you working just as hard
- Because you’re new, you’re automatically assigned as the captain of one of the company’s ping pong teams, which you play every Thursday afternoon from 4pm
- It’s the end of October so you’re given $100 to go out and buy a costume for the Halloween party – first place takes $200 so you better choose wisely!
- Your manager realizes you’re an expert at using Google Docs so he asks if you’d like to train other people in your team on the software
- Even though you’ve only been at the company two weeks, your HR manager wants to get together with you and your manager to discuss your career path – they both know data entry is just a starting point for talented people like you
At a beer factory to craft our very own BigCommerce beer!
Same job, huge difference right? That’s the impact culture can have over your company. How much harder do you think employees work for XYZ Enterprises than ABC Enterprises? Research will show that employees who love going to work will be at least five times more productive than those who don’t, or put another way: you can hire one person to create the output of five.
Now of course that doesn’t mean you work them to the bone. It just means they love your company and what they’re working on, so they’ll be more focused and committed to achieving the result they’re expected to.
In regards to building and maintaining a company culture, there are three main ideas/strategies that we’ve been using for the last few years that make sure we’re always either bringing in top talent or making sure we retain ours:
Jack Welch’s “Bottom 10%” theory, or topgrading
Jack Welch was chairman and CEO of General Electric from 1981 to 2001. In 2006 when I read his book Winning, I learned about his bottom 10% strategy which goes like this: at least once a year you work out who the bottom 10% of your people are (in terms of performance or work output). You then either work to improve them or replace them. Last year I also came across the Topgrading book which discusses the same strategy.
The idea with this strategy is simple: if you really want a company of A-players that get things done then B and C players simply won’t fit in. They won’t be able to keep up with their peers, they won’t be passionate about your goals and they simply won’t create the work output you demand. Sometimes training can turn B-players into A-players but very rarely will it turn C-players into A-players, and these people typically become the bottom 10%.
The mantra “hire slow, fire fast” comes to mind here. If someone isn’t a fit for your company after hiring then don’t wait an entire year to implement the topgrading strategy. Get them on a performance plan, tell them exactly what you expect from them and if you can’t get what you want out of them then replace them. It’ll be better for both you and them.
Modeling
Both Eddie and I have listened to all of Tony Robbin’s books and CDs. I’ve also been to a few of his live workshops and the most important concept for us was modeling. Again, the idea is simple: find a company doing what you want to do and copy them. From a culture point of view we identified three companies we really liked (Google, Atlassian and Zappos) and went about modeling their best traits to build the foundation of our culture.
Modeling is probably the most important strategy you can use to succeed in life, period. Want to make more money? Find and model someone doing exactly what you want to do and figure out how they do it. Want to lose weight? Find someone with the body you want and ask them about not only their diet and workout routine but also their mental state, goals and belief system.
When we started the company we identified a handful of companies we would model. Then we outgrew those companies and found a few more to model that would get us to our next set of goals. Now we’re about to reach those goals so it’s time to find and model based on a new set of companies.
DISC Assessments
If I tell you I have a high D and a high C you won’t know what I mean – unless you’ve invested the time to understand (and use) DISC assessments as part of your recruitment efforts.
A DISC assessment analyzes the psychological make up of people you’re looking to hire. DISC assessments can be done online (pay per test, about $30 each) and are made up of multiple choice questions. They typically take about 30 minutes to complete.
There are different types of DISC assessments but all will have one thing in common: they’ll tell you the DISC levels of each candidate and will tell you the psychological profile they most closely resemble.
DISC is of course an acronym that measures:
- Dominance – relating to control, power and assertiveness
- Influence – relating to social situations and communication
- Steadiness – relating to patience, persistence, and thoughtfulness
- Conscientiousness – relating to structure and organization
Each attribute is measured on a scale which can be as simple as low, average and high. For example, I have a “high D” which means I have a high dominance and sometimes use assertiveness to get things done. Great for a founder/manager but terrible for say, a technical support person which would benefit from a “high I”, or influence, and a “high S”, or steadiness.
Different roles lend themselves to different DISC scores. You want your managers to have a high D and/or high I so they can shape and influence their team. You want your frontline (such as customer service) to typically have a high I and high C, while you want your support team to have a high I and high S. Finally, you want your sales reps to have a high D and high I – they shouldn’t take no for an answer and should be able to use tactful assertiveness to close the sale.
Our Halloween dress up contest - first place took $200
Wrapping Up…
The fact is, I could write about culture all day – it’s something I’m passionate about. The best way to build your culture, however, is to think about what’s important to you as a business owner and implement those ideas into your hiring and retention programs. The best place to start is by creating a mission statement and your core values. You can then work everything else out as you go.
Oh, and don’t take yourself too seriously. Laugh at yourself, play tricks on your employees and realize that bad situations can only get better. And one final piece of advice: post a lot of photos on your company’s Facebook page. Let your customers really see inside your company and don’t hide anything from them.
P.S. We’re still hiring so if a hard working, fun culture is important to you then we’d love to hear from you.
