MBA Mondays: Guest Post From Chad Dickerson

Chad is the CEO of Etsy and I think I'll skip the intro because this post speaks for itself.

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Recruiting & Culture

When Fred asked me to write a guest blog post, I told him initially that I was going to write about recruiting and culture. Both are topics that I've learned a lot about in nearly twenty years working in companies of all kinds and contexts: public and private, large and small, struggling and ascendant, on the east and west coasts. As I sat down to write, I realized that how you recruit people and your recruiting approach defines and continually reveals the culture of your company, and it quickly became clear to me that recruiting and culture are yin and yang. In recruiting, a successful outcome usually means a candidate saying yes to your company, and at that moment, the candidate becomes part of the company culture. Below are some of the things I've learned to do over the years when it comes to recruiting and culture.

Make recruiting a top priority at the CEO level

Former IBM CEO Lou Gerstner wrote a book about IBM's late-90s turnaround and said: "culture isn't just one aspect of the game, it is the game."" The word "recruiting" can easily be substituted for culture. In my career, I've participated in a number of searches for HR executives and staff. Without fail, the least successful ones were those where the premise was "we need someone/a team to own the culture and/or recruiting." (This is a similar corporate pitfall to looking for someone to "own innovation" but that's another post.) A great head of HR is critically important but culture and recruiting are owned by everyone if they are successful. As Gerstner noted, one of a CEO's most important responsibilities is tending to the culture. To that end, a CEO must not only drive recruiting at the executive level but at any level where it will make the difference in closing a critical candidate. On a practical day-to-day level, that means that I will drop nearly anything I am doing to help close a key candidate. Talent is that important and it's always worth my time.

Communicate the company vision broadly and directly

In his legendary recruiting pitch at Apple, Steve Jobs said to John Sculley, "Do you really want to sell sugar water, or do you want to come with me and change the world?" A strong vision can quickly set your company apart from others. In his pitch, Jobs understood the power of the appeal to something larger than simple manufacturing of goods for a particular market. As Antoine de Saint-Exupery wrote, "If you want to build a ship, don't drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea." Jobs' conversation with Sculley happened 1-on-1, but the forms of communication available today mean that you can communicate the mission and vision of your company more broadly and directly than ever, which is what I did when I blogged in May about our long-term vision for Etsy. It has never been easier to tell your own story and talk about your company directly with the people you want to reach. Talking to the media is good, too, but traditional media outlets have their own publishing schedules, editing quirks, and editorial voices, so you should always keep a direct channel open. On a purely pragmatic level, communicating directly gives candidates a deeper sense of what your company is trying to do and they come into the process knowing what your company is all about, often self-selecting to your mission. I've found that this takes the recruiting process up a level.

Challenge traditional notions of corporate transparency

A compelling vision is just the beginning of a conversation. To be successful in recruiting efforts, you have to have tangible substance to what you say. Current and potential staff demand greater transparency into your company than ever before. Typically, candidates want to know two basic things about your company: 1) how is the company doing from a business standpoint? and 2) does this company operate in a way that I can believe in? The second is arguably more important than the first, since performance metrics rise and fall, valuations go up and down, and stock prices fluctuate. Culture and values persist.

Most private companies don't disclose any financial information, but for years now, we at Etsy have been publishing key metrics from the Etsy marketplace in a monthly "weather report." Our main goal in publishing this information is to let the Etsy community know how the marketplace is doing overall, but publishing this data also helps immensely in recruiting. When you're trying to convince a candidate to move across the country or choose between you and a company that holds its numbers close to the vest, providing this kind of information can be the deciding factor.

Measuring how a company operates from a values standpoint is much more challenging than reporting financial numbers because it is inherently difficult and there are few standards. Fortunately, new models are emerging to make such measurements possible. At Etsy, we believe that as a community-based business — a business where our company's success is entirely linked to the success of our larger community — our company should hold itself to a higher standard of social responsibility and transparency. We are not alone, and an entirely new form of business — the "benefit corporation," or B Corp — is developing to address the challenge of running for-profit businesses within a values-based framework. The non-profit B Lab has created a quantitative independent third-party assessment to measure companies' success against rigorous values and responsible practices. Etsy recently took the assessment and qualified to become a Certified B Corporation ™. Any potential employee can see how we measured up by looking at our score on the B Lab web site. We passed, but as you can see, there are areas where we clearly could do better. Diversity is one area for improvement, and we're actively and transparently working to improve our score. Recently, we provided scholarships for women to attend Hacker School to address systemic issues in bringing women into software engineering by providing training. We also announced our support of Code:2040, a program to increase minority representation in software engineering. We are doing all of this in the full view of the world. Over time, our community, staff, and potential candidates will be able to see how our company practices measure up to our stated values and where we are making improvements. I believe top talent is going to increasingly expect this type of transparency and companies that provide it will have a recruiting advantage as they compete against companies that are merely selling the metaphorical "sugar water" from Jobs' recruiting pitch.

Be patient: "Slow Recruiting"

Relationships are the currency of recruiting, and while recruits sometimes appear almost out of nowhere and close quickly, the truly great candidates can take a long time. John Allspaw runs technical operations at Etsy and I think John is the best in the world at what he does. When I hired John at Etsy in 2009, the near-term recruiting process was a few months, but the actual recruiting process had been going on for a decade. Nearly ten years earlier when I was CTO at Salon.com in San Francisco and John ran the ops team there, he came to me and said he needed to move back to Boston for family reasons, so he had to leave the company. I said, "Why? You can just work from there. We'll keep the same salary and nothing will change except where you work." John went back to Boston, the family situation improved, and John came back to San Francisco a year later. He never left the company and we made a difficult situation much easier for him. Since then, we have worked together at three different companies. Our relationship has persisted through boom and bust business cycles, massive upheavals in our personal lives, and changes in our business relationship. Looking back, I started to recruit John to lead Etsy's ops team when I found a way for him not to leave Salon in 1999. I call this (with tongue slightly in cheek) "Slow Recruiting."

Recruiting too slowly for key positions can be a liability in a fast-paced industry, but the larger point is that the way you and your company treat people over longer periods of time has more impact on your recruiting efforts than anything else. Whether it's making a tough situation like John's work and turning it into a win-win, talking patiently with someone at a conference when your time is constrained, or thoughtfully answering an email from a college student seeking advice, recruiting goodwill adds up over time. If you're just entering the industry and expect to be recruiting at any point in your future, I assure you that people will remember things you said to them fifteen or more years later. Keep that in mind at all times. It could be the difference in closing a key candidate ten years from now.

Open-source your culture: generosity of spirit

Most people really want to work for successful companies with really smart people where generosity and helping are the cultural norm. There are specific ways to institutionalize sharing in your company and demonstrate that spirit to the world, particularly in engineering where recruiting is most intense. In early 2010, we launched our engineering blog and named it Code as Craft, tying the mission of engineering back to the larger culture of craftsmanship in the Etsy community. Several months later, we formally introduced the concept of "generosity of spirit" at Etsy and asked every engineer do one of the following things within the year: 1) present at a conference, 2) write a blog post for the engineering blog, or 3) contribute to open source. Since then, the team has open-sourced 40+ projects, written over 70 blog posts, and posted over 50 engineering presentations, spawning a Code as Craft speaker series in the process. The team does these things because they love sharing their work, but as recruiting activities, they are incredibly effective because the software and information we provide helps potential candidates solve real problems. Cold-calling candidates doesn't come close to the warm intro of a candidate using the software you've open-sourced and thoughtfully explained to them.

Kellan Elliott-McCrea (Etsy CTO) says: "If your culture isn't explicitly leaky, if it doesn't aspire to change the world beyond the walls of your business, if it isn't captured in the product you're building and your users' experience, then it probably isn't culture, it's just cheerleading and team spirit burning up expensive inputs of time and company outings. Culture is lived, and it's why generosity of spirit is such a key piece of our team culture" (and therefore a key part of our recruiting philosophy and approach).

Cultivate the spirit of the organization

In his 1954 classic, The Practice of Management, Peter Drucker devoted an entire chapter to what he called the "spirit of an organization," writing: "Management by objectives tells a manager what he ought to do. The proper organization of his job enables him to do it. But it is the spirit of the organization that determines whether he will do it. It is the spirit that motivates, that calls upon a man's reserves of dedication and effort, that decides whether he will give his best or do just enough to get by." At the end of the day, a candidate will look most closely at the spirit of your company and the visceral sense he/she gets from visiting your office, reading your blog posts, following what members of your team say on Twitter, and reading about you in the press. It's hard to quantify this spirit, but you know it when you've got it, and you know how painful it is when you don't. When it comes to recruiting and culture, a leader is mostly responsible for tending to the spirit of the organization, and for making whatever adjustments need to be made to keep that spirit strong and powerful. In the end, that spirit matters more than anything.

Thanks to Kellan Elliott-McCrea (Etsy CTO) and Randy Hunt (Etsy Creative Director) for their feedback on this post.

#MBA Mondays

Comments (Archived):

  1. Shawn Beilfuss

    Great ending on spirit of an organisation, really resonates!

  2. awaldstein

    Reading this info packed post, I realized yet again that in most endeavors of substance be they recruiting or building your brand, there are guidelines and directions to be shared but never a list nor process that suits all.Thanks for the time spent on this Chad.

    1. JamesHRH

      Arnold – exactly. Culture & recruiting need to be authentic. The Checklist Manifesto is not the right tool, as @JLM has stated.

      1. Abdallah Al-Hakim

        excellent points – If you feel like you are following a list and in auto mode then it is probably not an authentic process

      2. FAKE GRIMLOCK

        EVERYTHING NEED TO BE AUTHENTIC. OR ELSE.

  3. Guest

    Excellent post!I have always had a problem with the concept of “culture.” Just recently I got an email from an HR person complaining that their new hires, which numbered more than their existing employees were not adapting to the company culture.The reality was the older employees were “circling the wagons” as I call it and defending themselves against the “threat” of the new employees. The HR person was singing the praises of their existing culture.Sometimes a company’s culture can be a negative which does not come to light until it is tested. Sometimes the concept of “fit” is one that should highlight the weaknesses of the concept of culture.I told this young lady that she needed to be a change agent to lead the integration of the new employees and the older employees; it was critical that she get everyone to understand that part of culture is its ability to adapt and change.I think that the concept of “spirit of an organization” is a much better way to think about the key aspect of the companies that we build.

    1. FAKE GRIMLOCK

      OR MAYBE OLD CULTURE SUCK TOO MUCH FOR NEW EMPLOYEES TO WANT IT?

      1. Guest

        I am not a big fan of the concept of “culture.” Its kind of like the south in the early 60’s; it had a great culture and a very genteel way of life…If you “fit.”In apparel everyone plays golf and I don’t. That means I don’t fit.Its a real quick slide down a very short slippery slope from finding candidates that “fit” ones corporate culture to hiring only those that are just like us.In some situations its called inbreeding.

        1. Dave W Baldwin

          Well put. I’ve had to use the ‘inbreeding’ word a few times.

        2. FAKE GRIMLOCK

          SUM OF HUMANS = CULTURE.IF NEVER ADD, SUM NEVER CHANGE.

        3. paramendra

          Ha ha!

  4. Mark Gavagan

    Terrific post Chad – thanks.

  5. Kasi Viswanathan Agilandam

    Really loved this statement … ” arguably more important than the first, since performance metrics rise and fall, valuations go up and down, and stock prices fluctuate. Culture and values persist.”So true for a person as well…. we can go sick or become healthy, rich or poor, genius or nuts…. Culture and values persist.

  6. John Best

    Thanks for this post Chad. Great insight. I particularly liked “slow recruiting”.You can’t force a culture into place, you can’t hothouse it.

    1. Chad Dickerson

      I like the phrase “you can’t hothouse it.” I think some companies think if they get a ping-pong table, provide free food, and have beer on Fridays, they’ve provided “culture” but I think the way people in a company interact and help each other is what it’s all about.

      1. John Revay

        “I think some companies think if they get a ping-pong table, provide free food, and have beer on Fridays, they’ve provided “culture””Nicely stated

      2. JamesHRH

        Authenticity is the toughest things to fake.Would you agree that the Etsy way is not an example for others (its an original thing & not something that can be copied?).I think of many product companies failing in this regard – they see companies like Etsy and think ‘we need to be more people-y’, when they should just stick to making ‘insanely great products’ as someone used to say.

      3. karen_e

        There is a great quote in the new Clay Christensen book — he quotes an organizational management guru — that culture is actually a company’s collection of processes and priorities. That idea more than anything has helped me understand that it isn’t the beer and ping-pong. Or in my company’s case, the Wii tennis tournament, which, by the way, I am very excited about.

        1. FAKE GRIMLOCK

          IF CULTURE IS SUM OF COMPANY, THEN HOW IMPORTANT CULTURE?ALL THE IMPORTANT.

          1. Guest

            If culture is sum of company, then every new hire changes the sum and thus changes the culture.If thus, then how can you hire to fit if you don’t know what it is you are fitting to till after you hire?Okay, that was fun…Corporate culture is a matrix, some of it exists due to the demographics of an employee base, some due to the geographical location, and some of it comes from management.I came to a very small southern company as a college educated northerner with no apparel exposure. I was the first executive/manager who was hired who was not a family member and or had not worked for one of the owners at another company.That is not “a fit.”I remember how the “culture” reacted the first time I promoted a woman to a management position and paid her salary. The first time I hired a black person to work in the office and as payroll manager at that. The first time two women were caught kissing in the bathroom….That all occurred in the early 1990’s.That was culture shock but it also created and while small pockets of the old culture still exist its the new spirit of the organization that won out.Culture can stagnate, spirit cannot.

          2. FAKE GRIMLOCK

            EVERY HIRE CHANGE CULTURE.NO WAY TO TELL HOW UNTIL AFTER IT HAPPEN.

          3. paramendra

            I have spent a few years in the South.

          4. Guest

            @paramendra:disqus and I visited Nepal many times in the 1980s…I even have a picture of me at a Full Moon Party in Kathmandu, its probably 1983.

          5. paramendra

            Didn’t take you long to figure out I grew up in Nepal! 🙂 In the picture you look like you are having ganja! 🙂

          6. Guest

            When you have friends from Nepal you develop an ability to know names and their source.Hmm….ganga….that was a long time ago.

          7. paramendra

            I just saw you are from Bowling Green, Kentucky. Kentucky is where I was! 🙂

          8. Guest

            Does that mean you went to Western? My sympathies are with you! :)I just met a family from Yemen who are stuck in the United States for obvious reasons. The wife just completed her Ph.D. in Community Health and the husband now has a masters in Public Administration….they have four kids.I made a couple of phone calls to get Western to kick in and get them jobs; if you are going to take folks out of war torn countries and take their money to give them advanced degrees you got to go the distance when they cannot go home.

          9. paramendra

            I was at Berea for five years. I might have been to Bowling Green. Now in NYC since 2005.

          10. Guest

            Stay in NYC and never look back!Always move forward!

          11. paramendra

            🙂

        2. Robert Thuston

          Makes sense. The way it’s been told to me that makes sense is… culture is a company’s collection of behaviors

      4. ShanaC

        Building interaction is extremely difficult – you talking about internal community manager work + making sure you space causes random meetings. Very hard work, both

      5. FAKE GRIMLOCK

        IT LIKE BAKE CAKE.STILL TAKE HOUR, EVEN WITH 37 OVENS.

    2. leigh

      my fav part as well….

  7. Trevor McLeod

    A VC is awesome because we can learn from your 25 years of experience.And with these amazing guest posts, we can learn from the experience of people you know or have worked closely with.A big thanks to Chad for taking the time to write. He has clearly thought through what is important to him as CEO and articulated it extremely well.Combine this with the Code as Craft meetup I attended last week, and Etsy has a new fan..

    1. fredwilson

      he may try to recruit you next!

      1. Trevor McLeod

        now that would be cool!

    2. Chad Dickerson

      thanks, Trevor! (and last week was particularly good for speakers — Kathy Sierra and Steven Levy)

      1. Trevor McLeod

        yes, it was excellent! found myself telling Levy stories most of the following day to all my hacker friends:)

  8. BillMcNeely

    I thought last week’s post was well written this is even more so.

    1. JLM

      .How does this comment get a down vote?.

      1. FlavioGomes

        an accidental fat finger perhaps..they say something like 10-20% of you tubes voting metrics are due to accidental clicks.

      2. paramendra

        We all have enemies. A few here, a few thither.

  9. JamesHRH

    A terrific post. Thoughtful, well written and bang on.I particularly like the handling of some of the natural conflicts: Etsy being large by helping the small; company culture being leaky & non-discrete.The choice of quotes always says a lot about the author: who they admire, a humility to realize that others have come before & solved similar issues.I am personally a fan of both the Gerstner & Drucker quotes (simple explanations of the importance of authentic esprit de corps from the top & bottom perspective).

  10. reece

    amazing post by Chadin particular, the section on “slow-recruiting”… people often ask me why i spend time advising young startups – “what’s in it for me?”but beyond the immediately gratifying feeling of helping someone avoid the mistakes we’ve made, i like meeting people because i’m looking for people i want to work with in the future

    1. FAKE GRIMLOCK

      IT IMPORTANT FOR DEVELOPER TO KNOW LITTLE BIT OF EVERYTHING.IT SAME IMPORTANT FOR LEADER TO KNOW LITTLE BIT OF EVERYONE.

      1. reece

        +1

  11. Abdallah Al-Hakim

    another great post on this important topic. My came out to me while reading the post was Chad’s authenticity in wanting to recruit and develop his employees. Also, the section on slow-recruiting is terrific and shows a sound long-term thinking strategy

  12. William Mougayar

    What an epic post you wrote, and you covered a lot more than culture & recruiting. This reads almost like a manifesto for any CEO on how to build a long lasting company. You have cracked the code on it. Etsy is actually my favorite company of the USV portfolio. If I was 20 years younger or earlier in my career, I would want to come and work for you in heartbeat. You reminded me of the best years I spent at HP when its culture, values and the quality of its people, products and management set it part distinctively from the rest.  I have one question. What you have written about is obvious now that it has been largely realized. But at which point in the growth & evolution of Etsy did you realize that you finally “had” a lasting & sustainable  culture?

    1. Chad Dickerson

      Thanks for your kind words. I’m proud of what we’ve accomplished but wouldn’t say we’ve cracked the code just yet. Culture is always a work-in-progress and there are many things I want to improve, both in how the company operates and the services we provide to our community. Our work is never really done!Thinking about whether we were done or not reminded me of one of my favorite Onion stories of all time: “Corporation Reaches Goal, Shuts Down.” http://www.theonion.com/art

      1. fredwilson

        ha! that’s a great one. “we accomplished our goals and are ceasing operations”

        1. Kasi Viswanathan Agilandam

          yep… the more and more i read/hear… it sounds like he is considering a corporation as a ‘soul’ and not a money making machine … and that one sounds like a wish person’s retirement plan…”accomplished my goal and am retiring now”

      2. William Mougayar

        OK. You gave me the answer I was expecting, but I’m not going to let you off easy on this one (yet). I meant,- was it after 5 employees, 10 employees, a given milestone, etc…Was there a trigger, a tipping point, even anecdotal evidence that things were finally gelling?

        1. Chad Dickerson

          (busy day yesterday — just getting back to this!) I’ll still hold to my work-in-progress point, but for the engineering team, I think starting the “code as craft” blog in early 2010 (4.5 years after the founding of the company) gave the team an inspiring vocabulary and a strong identity to rally around. I think the process of becoming a Certified B Corp a few months ago had similar cultural resonance across the company. But it’s all still a work-in-progress. That’s why I added the “spirit of the organization” section to the post. Culture self-perpetuates a bit, but you still have to cultivate it.

          1. William Mougayar

            Thanks for the additional perspective on this!

    2. LE

      “You reminded me of the best years I spent at HP when its culture, values and the quality of its people, products and management set it part distinctively from the rest. “As I’ve mentioned I’ve always had a high opinion of HP and their products.When choosing to buy something made by HP, or another brand, I pay more for HP (like I paid more for Sony). Because it’s a quality company. Unfortunately the masses aren’t smart enough to buy based on long term thinking and quality. They go for the low price. So companies like HP have a hard time when there is the low cost person shoving product out the channel.Anyway HP is quite different than a company like Zappos which basically is built around selling the same products that others do just offering a better customer experience. [1]@fredwilson:disqus – I’d like to see a guest post on the HP way.[1] For now anyway I question how long this will last. Fedex did similar things for their customers and this from the wikipedia page on Zappos reminds me of that:Call center employees don’t have scripts, and there are no limit on call times.[51] The longest call recorded was over five hours long.[6][52]Zappos employees are encouraged to go above and beyond traditional customer service.[53][54] In particular, after a late night of barhopping and closed room service, Hsieh bet a Skechers rep that if he called the Zappos hotline, the employee would be able to locate the nearest late-night pizza delivery.[55] The call center employee, although initially confused, returned two minutes later with a list of the five closest late night pizza restaurants. Inc. Magazine notes another example when a woman called Zappos to return a pair of boots for her husband because he died in a car accident. The next day, she received a flower delivery, which the call center rep had billed to the company without checking with her supervisor.[43](I love the way the media lappes this shit up. They just love that dog and pony show shit because it makes an interesting story. )The difference is that Fedex was creating a barrier to entry with their hubs and spokes while those stories circulated (about someone climbing a mountain to deliver a package and all sorts of PR worthy things like that as popularized by the Tom Hanks movie “Cast Away”). I don’t believe they try as hard now nor do they need to. Zappos is not the same. They survive, like QVC, like Walmart, by getting people to buy things they don’t need, and to spend more money then they should. They are in a sense like a support group for people with something missing in their life that is satisfied by the shopping experience.

      1. brian trautschold

        love comment on HP way & former excellent standards of the co’.but, as far as companies increasing the price-willing-to-pay for quality/ engineering/ brand – isn’t that what Apple has done now?as hp board/ shareholders/ executives fumbled consistently over 10 years Apple has grabbed (at least in the mind of the consumer) that upper echelon of products.

        1. LE

          as hp board/ shareholders/ executives fumbled consistently over 10 years Apple has grabbed (at least in the mind of the consumer) that upper echelon of products.HP has been around for a long time (they moved out of the garage in 1940) and has been successful and admired over many decades. As recently 1997 when Jobs came back to Apple they were near total failure. Jobs took some big gambles and those gambles paid off. This is quite a difference story than a powerhouse like HP and as far as the opportunties they missed that is typically what happens to mostincumbents.What you are seeing when you observe business now from your perch (I note you graduated college in 2009?) is a very short part of business history. So naturally you are going to think what you think (not saying that with any disrespect at all but it’s a reality as we all do that).A company like HP is a big ship. The reason big ships miss opportunities, and this is really important and rarely talked about by business writers (who generally have no clue if they did they would be doing instead of writing (of course there are some exceptions)) is that you don’t see the opportunities that never amounted to anything that they passed up on. You only see the ones that got away and the mistakes which are highlighted. Not saying that people don’t fuck up. They do. But there is a reason trials take so long. Details matter. And you never get the real details when you read stories of success or failure.Think about it for a second. You hear legends like “Parc never commercialized things that Jobs saw immediately as having potential”. You hear about the guy who walked into IBM wanting them to invest in Xerox and they passed on that. People say “what a big mistake, what an idiot. How stupid”. You hear about the deal that IBM cut with Gates and how stupid they were to allow him to do what he did. You say “wow I would never do that” just like any monday morning quarterback does. What they don’t have data on is all the 1000 other ideas that they passed on that never became anything. If you put enough dinky stupid startups in a room one of them will hit and then everybody will reverse engineer what that founder did and act like it’s gospel.@fredwilson:disqus passed on airbnb (and posted the emails that Paul Graham wrote about how he missed that one). Fred feels bad about that. But the truth is Fred sees entrepreneurs back to back all week long. He is not going to bat 100. He is going to use his judgement based on the patterns that he has developed.I would have passed on airbnb as well. I like the maid service in hotels and I don’t like to freeload off of people.

          1. falicon

            Truth is, even the biggest wins were/are passed on *way* more than they are picked.Very few people talk about it, or admit it, but the reality is that no matter who you are, what you are working on, or how well it’s doing in the early days…it’s still a MASSIVE uphill battle to get most to ‘yes’ (and the hardest by a LONG SHOT is always the first ‘yes’)…

      2. William Mougayar

        I’ve spent the first 14 years of my career at HP and they were during HP’s hey days when the company routinely was at the top of the Fortune Most Admired to work for. But, I will warn and say that the HP of today is not the same HP of yesteryears. It stopped being that over 10 years ago…The quality of most of their products is still there, but the HP Way is now several notches down from its original way. Maybe a post on the “original HP Way” would be fitting. This isn’t your grandfather’s HP anymore 🙂

        1. LE

          A total “where have you gone Joe Dimaggio”.”but the HP Way is now several notches down from its original way. “The world changes and success is many things coming together. You of course remember the book “In search of Excellence” and it has been documented much of what happened to many of the companies featured in those books in later years.Companies like people are the result of their circumstances. Of course some are truly better than others. But the truth is put the same company in a different time period (or even in a slightly different industry) and all that great stuff they do means nothing.What google can do because of the great amount of money they have now is not what they will be able to do 10 years from now when their work force ages.I’ve been following business for a long time. I’ve see so many companies that were featured as businesses to model yourself after that have come and gone because times have changed.Just the other day I was thinking about Stew Leonard which I remember being touted in INC Magazine in the late 80’s as the greatest business of it’s kind (kind of like a Zappos). When I was traveling through CT I visited the store and it was pretty cool. Years later we find out “tax fraud”. Ooops.http://en.wikipedia.org/wik

      3. FAKE GRIMLOCK

        HP GREAT COMPANY… 5 YEARS AGO.EVERYTHING ME, GRIMLOCK, BUY FROM HP SINCE THEN CRAP.

        1. William Mougayar

          I agree. It’s like Mercedes starting to make Chevys.

        2. Abdallah Al-Hakim

          We are on a similar time frames. Both myself and my wife stopped buying HP products around 5 years ago.

    3. Timothy Meade

      I think we’d all love to see how things are going at Engagio, how the process of building out is going and how the mix of Fredites and not is working out.

      1. William Mougayar

        Ha…that’s a post in itself! Let’s re-connect as our previous attempt didn’t work 🙂

        1. FAKE GRIMLOCK

          MIX OF FREDITES?

  13. chrisdorr

    Chad, this is a great post that shows a generosity of spirit that is both admirable and very smart–and a great approach to business as well. Perhaps there are companies and business schools out there that should see Etsy as a great model to be followed. Imagine if BP was run this way–would the Gulf oil spill have happened? Probably not.

    1. Chad Dickerson

      Given the BP reference, you might be interested in our practice of blameless post-mortems inside the company that we think helps reduce errors over time.http://codeascraft.etsy.com…John Allspaw is doing ground-breaking work in the study of human error as it applies to web operations. You can see him talk about it if you’re interested: http://oreillynet.com/pub/e

      1. leigh

        How crazy is it when you have to specify that a post-mortem approach is blameless … great post and link tnx.

      2. Matt A. Myers

        i) Be kindii) Don’t blame othersTwo of the foundational rules / core values I follow. Both require you to self-reflect to see how you could have done things differently, and to sit with things long enough to do so without reacting in a negative or angry way. It can be challenging, especially when you’re first starting this practice and have lots of anger built-up from the past.And thanks for the links.

        1. Abdallah Al-Hakim

          awesome quote – I just reblogged it through tumblr

      3. chrisdorr

        Chad, thanks for the links. Both provide great insight. I particular like the emphasis on learning–and how failure is a key component. More companies need to build a culture of learning that furthers the interest of the company as well as each individual within the company.

      4. Abdallah Al-Hakim

        thanks for those links – they really are super!!

      5. ShanaC

        thank you for developing a culture of niceness

    2. JLM

      .Not defending BP in any way but their Gulf disaster — a simple blowout protector works correctly and this never happens..

  14. Tom Labus

    Thanks, Chad. That was a great post!!On financial transparency, have you ever hesitated to post bad info for political reasons or internal diplomacy? It’s hard to be public.Lou Gerstner’s job at IBM has been a great inspiration for me. The best or one of the best “turnarounds: in US corporate history.Do employees consider culture a burden and just one more thing to do?

  15. Anne Libby

    Chad, I love seeing Peter Drucker quoted here.A potent reminder: technology change can be rapid, disruptive, discontinuous. Changes in human nature, not so much.

    1. Donna Brewington White

      Drucker. Moment of silence please.

      1. Anne Libby

        Indeed!

  16. Tom Labus

    Thanks Chad for the great post.Financial transparency is so difficult to maintain when bad times hit. Have you ever pulled info back for political internal reasons or just to calm the waters?Lou Gerstner’s run at IBM is the top of my list for great jobs done by CEOs. Culture proved more important in his case than specific industry knowledge.Do you think employees consider “culture” just one more thing they have to do for their job?

    1. Rafe

      I don’t think it’s that way at Etsy. For the most part at Etsy it seems like people just act like themselves, and that the secret is in hiring people for whom acting like themselves makes Etsy an awesome place to be. I know that sounds kind of twee, but I can’t think of a better way to explain it.

      1. Tom Labus

        There’s a fine line there between getting people fired up and being a burden.

  17. Pete Griffiths

    A terrific post. Agree 100%. And the material on B Corp was both new to me and fascinating. Thanks.

  18. Robert Thuston

    Great post. Generosity of spirit… just re-reading this yesterday, “If one wanted to think about open-science in market terms you could say that scientists were paid by other people’s attention.” –The Wisdom of the Crowds. In essence, scientists build credibility and respect by giving away their work in publications, presentations, etc.Your point about “generosity of spirit” probably plays a big part in Spirit of the organization as well. Drucker also says, there is only one way to motivate your employees… and it’s not pay… it’s responsibility. Responsibility for things like giving away code, giving presentations, giving back to the community likely drive that. The other responsibility that can’t be overlooked is “performance”.Thanks for the post… lots of great nuggets in here.

  19. JLM

    .Great post and some very interesting and fascinating points.The personal loyalty which is demonstrated by the anecdote of John Allspaw is illuminating because it was the CEO’s initiative and willingness to change the organization to accommodate this talent that is the manifestation of this personal loyalty — both ways.This “one off” approach is real leadership. Equally important, it shows creativity and pragmatic team building. Most important — it worked.It breathed a huge lesson into the company’s DNA — one person, a single person is worthy of a special consideration and effort.The Drucker framework is refreshing as Drucker had almost everything right if one only has the wisdom and depth to seek it out. I like Drucker as a glance into history v the pop business psychology of such good works as “Rework”. What I call the “hey, we invented sex” writing.The notion of culture is an interesting phenomenon. The question is really this — toward what purpose? I fear too often what passes for culture these days is very shallow and has a “feel good at all costs” mentality. A certain “wow, look at us, we are soooooo cool”.As opposed to being a real business and community driver.The question is what results or modification of the results are driven by the culture and is it genuine and useful or is it just a box to be X-ed?I think of culture as being the “wisdom of the campfire” in which the organization teaches itself and reinforces the good and identifies and jettisons the bad. Sometimes it is painful but sometimes life is painful.Once the fire is set by the leadership, they almost have to take a step backwards and let the dialogue start by itself. You can lead but you cannot force feed the development of the culture.Cultures are like picking tattoos. The CEO does not have any greater voice once you get down to picking the specific design.Great post and thank you. Well played!.

    1. Tom Labus

      Couldn’t agree more about culture for culture sake. It’s got to start from someone real and be consistent.Were you a Gertsner fan fro his work at IBM?

      1. JLM

        .I am a huge fan of the turnaround business. I am convinced that a change of leadership can make a dramatic difference in outcomes and create enormous value.I think there are two phenomenon — arguably linked — that are the best value creators in business today.1. Making order from chaos — turnaround business.2. Transforming old economy companies into new economy companies particularly when they are a bit “Mom & Pop” – ish. In this endeavor, one is a user of technology.So, yes, I dig Gertsner..

        1. John Revay

          #ElephantsDance

          1. JamesHRH

            Great book; horrible title.A reviewer in the Globe & Mail actually complained that Gerstner spent 90% of the book droning through the mundane details of the IBM story, just so he could ‘highhandedly tell you his rules for business’.I wish that review had been online & with comments – ‘yes, it is called building credibility.’

        2. Donna Brewington White

          Me too, JLM. I get excited by turnaround situations. Sometimes hard to know which I enjoy most — startup or turnaround. VC or Private Equity portfolio company? Interesting that alternative investment has found a home in both worlds.

  20. Sandra Lombardi

    Very nicely written. Thanks for sharing Chad. It is encouraging to see that the top levels of Management understand what the true drivers of innovation, creativity and success are. A company should strive to be the ‘party bus everyone wants to get on’. Hiring passionate people who share a company’s goals and beliefs sets you on the path to unexpected success. It creates an arena where possibilities are endless and motivation fuels every initiative.These concepts may at times seem very foreign to many others but it is truly a very basic idea. Most great companies are born out of a dream. Working towards a solid company’s culture is nothing more than sharing that dream with those who will keep it alive.

  21. Bob H

    A thoughtful post with good intentions, but one with a weakspot in the matter of defining diversity in recruiting. Included wereminorities, women and, presumably, gender and sexual preferences. Absent wasage diversity, specifically people past 60 and 70 that have no desire or planto retire any time soon. How about generations working collaboratively tosustain and solidify the business organism beyond engineering guru hires? Ittakes more than stockpiling geniuses to keep business running smoothly. In theculture of recruiting, how does open mind stack up against open source? We,too, would appreciate chances to be a part of technology-enabled businessesoperating with measures of altruism and values beyond mere moneymaking.

    1. Donna Brewington White

      Well said, Bob. This topic burns me up. Maybe because 25 y.o. is getting further and further away and I am more passionate and driven than ever before.I also see how much value maturity and wisdom (that typically come with age) could bring to these young startup environments. The key though is finding people of a certain age whose thinking is still fresh and vigorous and for whom the past is a vague reference point and not a destination.

      1. JamesHRH

        Donna – see my comment above, relevant experience is the key, don’t you think?

        1. Donna Brewington White

          Of course relevant experience is key. To an extent. It depends on your purpose in hiring — merely to get a particular job done, or to build a certain type of team with certain types of synergistic capabilities. Sometimes I see people getting stuck in trying to determine what’s relevant. Relevant doesn’t always mean “exact match.” Hiring is so unimaginative sometimes. Some really good hires get missed as a result.I get it though. There is already such a sense of risk involved in hiring, especially for someone who has not mastered the ability to assess abilities and fit. And it takes more time to be creative in hiring. It is easier to paint by the numbers, stick with the mold. I understand, but it is unfortunate that this happens.

    2. JLM

      .Great comment. This is going to be a huge resource. Well played..

    3. Cam MacRae

      Try as I might, I cannot fathom the down vote on your comment.I’m not a big fan of stockpiled geniuses. Two of the many things I learned the hard way are that you’re never the smartest guy in the room — everyone is smarter than you in some respect — and that experience trumps enthusiasm about half of the time. Each necessitates a healthy mix of people.I like employing and working with greybeards. After all, so much of today’s tech hotness has it’s origins in smalltalk circa ’83 and lisp circa ’84 😉

      1. ShanaC

        I like working with various people as a result as well. The more of a mix, the more interesting ideas come up.

      2. JLM

        .Why do economists live in such ratty houses?.

        1. Cam MacRae

          Indeed.Although this is a deeper question than it first appears.

    4. Dave Pinsen

      How about weight diversity? How many fat people do you see at startups? How about the physically disabled? I’m guessing not too many. Maybe for the same reasons you don’t see a lot of old people: they (we) remind us of our mortality and our morbitity. And their health insurance is more expensive (particularly those not yet covered by Medicare).Old people in relatively junior positions offer another painful reminder, that our careers don’t always go as planned. A bunch of twenty-somethings working in a startup can be full of optimism, anticipating a meteoric rise in career advancement and prosperity ahead of them. Now throw in a 64 year old in the same role — what’s a 24 year old going to think?A) If that guy is doing the same stuff as me at 64, he must not be a “ninja” or a “rock star”.B) If this company is hiring non-ninjas, doesn’t that lower its chances for success? Maybe I’m in the wrong place. I want to go somewhere where I have the chance to make lots of money, so I’m not working with a bunch of 24 year olds when I’m 64.

      1. JLM

        .Bit off the topic.I remember a clip of Gov Christie getting out of a black Towncar and being asked by an eager beaver Airedale reporter whether he had a comment on Gov Corzine’s derogatory slur made about his weight.Christie looked into the camera and said: “Let me get this right. Corzine is making fun of fat people in New Jersey?”The vote tally favored the big fat guy..

        1. Dave Pinsen

          Gotta love it. Is there any American politician quicker on his feet than Christie?

          1. Scott Barnett

            I think his stronger attribute is he won’t back down from a fight. That gets him in trouble once in a while, but I do appreciate that he wears his convictions on his sleeve and isn’t afraid to show it. I don’t agree with everything he believes, but I love that he is genuine in his opinions and passionate about his ideas. Severely lacking in politics.

          2. Dave Pinsen

            Agreed. We could use more like him.

        2. Dave W Baldwin

          Good one!

      2. JamesHRH

        This is a legitimate answer.However, some people can be greybeards and still not harm the rockstar culture. I hired a 60 year old to run sales for a large portion of the US. His resume was full of successes & he worked for us because he ‘liked me & liked selling new things to people’.He was sort of a startup Keith Richards – he was still playing because it was who he was.

        1. Dave Pinsen

          Great analogy. I’m sure a startup Keith Richards would boost morale in any company.

      3. Donna Brewington White

        Hey, Dave. I don’t think it is a matter of diversity for the sake of diversity, but for the sake of perspective and combined experiences that may be valuable to the objective at hand.Another perspective on the “older person” in a more junior role is that this can be inspiring. A second, third, fourth career? I hope that at 60 or 70 I am learning something new, especially if it is something that wasn’t even thought of when I was 30. Should a 70 year old miss out on the internet era because there was no internet to speak of when he or she was first building a career? Really smart people don’t stop being really smart because of age alone.Perhaps something will change in our thinking as more baby boomers move into retirement age but don’t feel comfortable with being in a retirement stage.

        1. Dave Pinsen

          I suppose if the older person is doing the job because he wants to, it’s a slightly different story. But if he is doing it because he can’t afford to retire and can’t get a more senior role, then it’s not so inspiring. I worked a temp gig once at a company that hired a lot of older workers (and permatemps) who were in that second category.

    5. JamesHRH

      Bob – I am not sure that I agree with your comment. I am, for the record, 47.Chad never mentioned the stockpiling of geniuses – that’s a red herring.His business sector – an online marketplace based on a unique community focus that celebrates craft & diversity – did not exist when you were 50 (assuming you are 60).Are you telling me, with his business growth measured in multiples (not percentages) that he should recruit people who (sweeping generalization here, but I think it is a safe one) have no relevant experience, just because they are old?Everyone can go to the Y & play some hoops; not everyone gets to play in the NBA.I think that is the case here.

      1. Anne Libby

        Hey, Fred can invest in Etsy — I’d guess that other greybeards also have relevant experience.(And many of the crafty products at Etsy are rooted in traditions that measure their age in centuries.)

    6. PhilipSugar

      I don’t care about diversity for gender, race, religion, and sexual preferences. I want the best person possible, period, end of statement. By saying I want x% of so and so I am actually saying I care about those.Think about the irony of that.I do care about trying to help make under-represented groups the best candidates, and that starts in school. I am willing to put resources towards that but not at my company.The one area I do care about diversity is experience. It is great to match the unbounded of enthusiasm of not having the judgement to know what the boundaries are, with the experience that comes from making some of those bad judgements.However, again, that is not a group like age, that is experience. BTW: I realized this when I was a 26 year old COO of a 180 person company and had a great sage of a CFO, tell me what I didn’t even know what I didn’t know.

      1. I'll get me coat....

        “I don’t care about diversity for gender, race, religion, and sexual preferences,” says the White Guy. {cough}

  22. Donna Brewington White

    I awakened this morning with my first order of the day being to finish the draft of a search (recruiting) profile for a Head of HR. The chief responsibility for the role will be to work with the CEO and top leadership team to define and cultivate a values-driven culture.I almost waited to read AVC until after I sent the draft off to the client. Glad I didn’t. This powerful post speaks directly to my client’s objectives. I will be sending the link along with the draft.And I will be back after meeting my deadline to read the comments and add my own .02. As a recruiter, this is one of the most important topics that I know and one about which I am PASSIONATE. When a company gets this, it changes the entire dynamic of a search and critically impacts the success of the results which to me includes retention! It’s more than recruiting and adding team members. It is building a company that somehow participates in changing the world. Truly. But how much better coming from a CEO transparently living this out on a daily basis.

  23. Marc Simony

    I’m not sure of the employee-size of Etsy, but I’d say in a startup every position is a key position. One may not think of a customer service representative as being as critical as the head of technology. But that one person can do immediate damage to your brand (if you have one). In a startup, hire slowly for every position.

  24. karen_e

    Chad’s piece is beautifully written. The idea of generosity comes up in business development/sales theory, too. This concept first inspired me as told in the books *Rain Making* and *Never Eat Alone*. The generosity of spirit section of the post is something that I use to get people excited about speaking at conferences and marketing in general (“marketing is everyone’s business”). I also love the comments by others about extending diversity to include people of all ages.

  25. Thaddeus Setla

    As a recruiter for 12 years I was excited that people wanted to spend so much on recruiting. I felt the business model didn’t support such high values, but I was disillusioned anyway about the money I could make. I started working for a VC company in the SF Easy Bay and after recruiting well over 1000 employees for a dozen or so startups I began to think “Why would they spend so much on recruiting yet do nothing in terms of keeping them there?” I had a complete flashback when I read this post and remember feeling that there just wasn’t a culture developed by the CEO’s or anyone there for that matter. In the end I wanted to build something that would have a bigger impact where I had control of the culture.It is 12 years later and I see more now how important it is to have the right team and culture in a business almost more than having a solid business model. Business models change, but people who inspire you and keep the right attitude is essential!

    1. ShanaC

      why do you think people and businesses don’t support values anymore?

      1. Thaddeus Setla

        It is so not the norm. An example of a company that does is Clifbar. It isn’t easy having the company strive for multiple values or bottom lines, but they have achieved it better than just about any company I have seen out there. The culture has to start from the top and it is very rare to find a leader that understands how to combine employee needs with work force benefits to foster better creativity, ownership of position. I will say that the moment I see a company that does this…. I want them as a client as they are already willing to invest in the kind of videos I love to produce!

        1. ShanaC

          Well, if you hear of openings at any companies that have a culture of values, let me know. I’m actively looking.

          1. Thaddeus Setla

            I have just been reading about B-Corps and I am inspired to actually seek out those companies since they solidly have a business model that makes my job in video production worth while. The list of companies here is a great start! http://www.bcorporation.net

  26. Greg Gortz

    Great post Chad. I was just at a conference and someone talked about taking “serendipitous meetings” as frequently as possible. Because of this I do my best to never turn down young college grads (or students) who are asking to meet for coffee. You never know when the recent college grad will turn into someone you want on your team. People will remember what you said, but even more so, how you made them feel. This can be the difference between closing a key candidate ten years from now.

  27. Dave W Baldwin

    Off subject. Wanted to say thanks to @ShanaC:disqus for being a friend. I shared with her my learning of my old, half paralyzed friend Kent losing his daughter last week and her daughter (3 month) becoming half paralyzed and at this point blind, plus the unknowns re brain development to come.Wanted to share a tune Kent posted on FB that was out before Shana’s birth http://www.youtube.com/watc… “Time” Alan Parsons Project

    1. ShanaC

      anyone know a good doctor?

  28. EffectiveWebSolutions.info

    There’s been more recruiting posts than usual here on AVC. With unemployment as high as it is it seems strange that any company would have problems with recruiting right now.

    1. fredwilson

      We are doing an MBA Mondays series on People

    2. ShanaC

      you would be surprised how this affects people. I’m looking, and am getting bitter at the process. To at least know people try caring in the process gives me some hope.

      1. LE

        I’ve noticed bitterness in some of the words that you have written in the past. It comes across. It might be impacting your job search as well. I can tell the level of happiness someone has many times by their phrasing and what they write. (It’s not all @jlm writing “isn’t life great!”. It’s more subtle than that. I can tell when Fred is having a bad day many times.)

        1. ShanaC

          No, I agree. I think I earned it, and I think righteous anger can change behavior. At this point I am out to change behavior as well, because I have righteous anger about the level of impolite I’ve experienced. Though something I have learned is that I am far less bitter than most, mostly because most people never develop righteous anger. They accept being beaten up as inevitable. Really depressing.

        2. JLM

          .One of the joys of being a simpleton is the sheer joy that is achieved in simple things. By being a simpleton, I mean literally not letting thing get to you even when it is perfectly rational to do so.Why? Because it does not achieve anything but eat you up from the inside out.Once upon a time, I was engaged in a life and death business struggle w some money guys. They thought themselves to be tough and they had the money.I wore them down w my positive attitude.I kept telling them I am not your enemy, I am the ONLY solution to your problem. The problem was not a money problem, it was a management problem.Eventually, they came around to my view.They feigned niceness and pretended to be my new found best friends. And maybe they were.But they had colored our relationship for all time. I was a simpleton and did not let it get to me.I made a nice little payday and saved their butts.Years later they needed something from me — Comptroller of the Currency Administrative Court kind of something.The Big Dog had their lawyers come see me and tell me how much those old boys loved me and what a great relationship we had had.At trial, I jammed it so far up their ass that they had to call a dentist. I enjoyed it. Immensely.Even their lawyer laughed at my testimony. He knew that scores were being settled. And I had waited for the right moment.Everything that comes around, goes around. And Karma is a bitch.But we can always wish ourselves the best of times and a good day.It is all going to even out in the end, my friend..

          1. John Revay

            Dentist – OUCH!

          2. LE

            “I kept telling them I am not your enemy, I am the ONLY solution to your problem. The problem was not a money problem, it was a management problem.”Sounds similar to what Trump did with the banks and the casinos in order to retain control.”At trial, I jammed it so far up their ass that they had to call a dentist. I enjoyed it. Immensely.”I don’t want to put myself in your shoes (since I didn’t experience what you did to cause you to want to do that) but in general I don’t get the same pleasure from doing that type of thing.In any case your story (would want more details of course) reminded me of some things that I have done over the years that would make interesting stories as well as what I have learned. I’ve actually compiled a list of those stories over the years. Would be nice if a collaborated site was developed along the lines of guys with stories and experience telling the things they learned over time. (I always enjoy reading books like that even if a percentage of the stories are enhanced.)I read a book a number of years ago by Hollywood agent Bernie Brillstein. I can’t remember the name (he has wrote several) but it was packed full of good stories. A good read you would like it (if I could think of the name which I can’t off the top.)Of course you also remember swim with the sharks from the 80’s. Harvey Mackay, nothing remarkable, just a guy running a small envelope business doing the same types of things a million guys running small businesses do. But the literary world was a buzz as if they had discovered something new, great and unique.

    3. K_Berger

      Higher unemployment makes the recruiting process harder. Good people tend to keep their jobs even in a down economy which means there is more B and C talent in the pool. To put it another way, it makes the haystack bigger so it is harder to find the needle.

    4. paramendra

      🙂

  29. jimmystone

    Incredible post. This actually helps me frame my job search as I begin business school. And in my limited experience, sell-side Wall Street has zero culture. It seemed driven purely by money which for me was not sustainable.

    1. ShanaC

      so what makes for sustainable culture?

      1. jimmystone

        Good question – I’ll give my best answer.I want to work at a place where I believe in the firm’s values. Yes – I want to aim for the stars and have the potential for a nice payday if we succeed. But I also want to work at a place that values integrity, teamwork, honesty, transparency, loyalty, and results. And like Steve Jobs’ pitch, a place that has a chance to change the future. I’m sure you could add more characteristics but I think the main point is that employees need to believe in the firm’s values, its mission and its leadership in order to attract and retain good people.Money is a commodity. It alone won’t keep top people. Because they’ll either want to believe in something more OR another more likely think will happen — another firm will poach them with even more money. In Greg Smith’s op-ed in the NYT, he talked about leaving Goldman Sachs because the firm’s culture had shifted from values he believed in to one which simply valued making as much money as possible for the firm. I’m not suggesting that Goldman’s entire culture is toxic. It’s a huge firm. But Mr. Smith’s unit seemed to have lost its way.As Talib Kweli puts it in his song “Ends”:I heard somebody say, money is the root of all evilDon’t believe that man, it’s the love of moneyThe pursuit of money, that’s the root of all kinds of evil man

  30. LE

    “”If you want to build a ship, don’t drum up the men to gather wood, divide the work and give orders. Instead, teach them to yearn for the vast and endless sea.””Targeting emotions is always a great strategy as a compliance technique anytime people are involved.It has to do with our fear of the unknown. Anxiety level is highest when you don’t know what lies ahead.The truth is life would be a drag if you knew how things were going to play out. Imagine if you got all the money today that you would make over the next 20 years but still had to show up for work and do the same job knowing what the outcome would be. You would be miserable.Emotion and the unknown is a powerful motivator. One of the reasons you never threaten to sue someone. Then they know what you are doing and can prepare themselves emotionally and build mental defenses. You imply something and let them draw their own conclusions.

  31. Guest

    I think @ed9d87467f2cb3e289863f8758c60c83:disqus makes a very good point and to highlight this let me take one point of this post to prove it:”Most private companies don’t disclose any financial information, but for years now, we at Etsy have been publishing key metrics from the Etsy marketplace in a monthly “weather report.””I know a private company, that has been publishing “key metrics” to share with its stakeholders since 1990. Didn’t really see it as all that earth shattering but rather recognized a problem and just addressed it.Employees talk, employees in the office talk to employees on the plant floor, employees in HR talk to other employees, as do employees in every other department.It seemed every now and then someone would put 2 + 2 together and come up with 5. The second key component of Maslow’s hierarchy of needs is “Safety.” All employees want to know how THEIR company is doing and if you don’t provide them with the information then someone at the watercooler or after hours will do so.So, publish a newsletter on a monthly basis and give them the facts. Give the facts to them in a way that relates to their sense of “safety” and give these facts in a manner that makes sense. We always used number of tee shirts that had been produced this year vs. last year, and what we anticipated were needed every month for the rest of the year.Employees are threatened by new hires, they see new employees as taking work away from them and thus decreasing their sense of “safety.” So to get the current employees to welcome new employees and mentor them, we also gave them the number of shirts needed on a per person basis, then they understood that there was enough work for everyone.Since 1989 we have given out Christmas bonuses, and every year since 1989 we have increased the amount. Every year it never fails that a rumor starts that this will be the year when there will be no Christmas bonuses. When someone builds up the courage to ask me directly I just respond, “No bonuses? Has Christmas been cancelled?”Health care costs, workers comp costs, anything you can think of that directly relates to your STAKEHOLDERS share the information with them. Why? Because they are your partners and you can’t be successful without them. You will never control your expenses and improve your profitability without the help of your employees.We added a column to our newsletter that highlights new customers so that our plant employees could relate to our retailers and to have a sense of a bond with who they were producing shirts for.As @JLM:disqus says repeatedly, “Don’t let them see you sweat.” That also includes your employees. There have been times when we struggled and I didn’t know how or if we would make it, its not only bad times that can scare you but if your business is growing then the best of times can also make money very tight if you are financing your own growth. I can tell you not one employee knew because they never saw me sweat.I will admit that I do not read books written by other CEO’s and thus I cannot quote them to substantiate the logic of what I consider nothing more than good ol’ common sense.I am all for ideas like B Labs, CSV, and good corporate citizenship and have been since I first entered the business world way back in 1980.Yeah, at 54 I am to be sent out to pasture and I am too old and too set in my ways to be of any benefit to “technology-enabled businesses.” Greybeards with war stories…..

  32. FAKE GRIMLOCK

    PERSON + PERSON = CULTURECOMPANY IS MANY PERSONS.THAT MEAN COMPANY IS CULTURE. OR BROKEN.CHOOSE ONE.

  33. Scott Barnett

    Chad, what an amazing post. Really fabulous. I applaud the culture you are creating, and love the fact that you can continuously look to self-improve. I had not heard of the Certified B Corporation and will look at that more closely, seems like a great idea. I dream of the day when all leaders view transparency as an absolute, and empowerment as de riguer. We’re not there quite yet, but hopefully with more leaders like yourself we will get there. One question – you seem to indicate that you don’t publish financials internally, but you do publish certain metrics. Can you be more specific? I have (in the past) reported basic financials and have gotten the ire of VC’s in the process – but I don’t understand why you wouldn’t share some basics with the team – if you don’t, they are only going to try to guess where you are in terms of cash in the bank, etc. anyway. Why not be more transparent and let employees put their imaginations to more important topics? I get that once you are public there are rules that must be followed, but what’s the rationale for a private company?

    1. Chad Dickerson

      We actually do provide financials internally, and I share board materials broadly, too. The only things I take out are some HR and legal issues where confidentiality is critical.

      1. Scott Barnett

        That sounds ideal, I like it. Again, nicely done and thanks for the post and wisdom.

  34. Donna Brewington White

    Fred, these last two MBA Mondays posts from Angela and Chad are absolute gems! Thank you!

  35. Joe Hobbs

    I think culture and art can be applied to almost everything in this world, even for business. On the other hand think that culture should be implemented with greater rigor in people in their levels of education, in some places often put it aside. Regards,Joe Hobbs – Recetas Faciles

  36. karenbrown2012

    A thoughtful post with good intentions, but one with a weakspot in the matter of defining diversity in recruiting. Included wereminorities, women and, presumably, gender and sexual preferences. Absent wasage diversity, specifically people past 60 and 70 that have no desire or planto retire any time soon. How about generations working collaboratively tosustain and solidify the business organism beyond engineering guru hires? Ittakes more than stockpiling geniuses to keep business running smoothly. In theculture of recruiting, how does open mind stack up against open source? We,too, would appreciate chances to be a part of technology-enabled businessesoperating with measures of altruism and values beyond mere moneymaking.@ed9d87467f2cb3e289863f8758c60c83:disqus, By following this simple advices you can earn an extra income every month… Check it out! http://neilstips.blogspot.com

  37. karenbrown2012

    Well said, Bob. This topic burns me up. Maybe because 25 y.o. is getting further and further away and I am more passionate and driven than ever before.I also see how much value maturity and wisdom (that typically come with age) could bring to these young startup environments. The key though is finding people of a certain age whose thinking is still fresh and vigorous and for whom the past is a vague reference point and not a destination.@donnawhite:disqus, My brother Brian showed me how to make some extra $ for me and for my family… All i did was, follow the steps explained on this webpage http://neilstips.blogspot.com

  38. paramendra

    Wow. What a post.