MBA Mondays: Culture And Fit
Kicking off our series on People, I am going to talk about the importance of culture and fit in the hiring process. What I have to say on this topic is mostly aimed at companies that are going from five employees to five hundred employees, but I do believe it is applicable to companies of all sizes.
I want to start with something I wrote in another MBA Mondays post, on the management team:
Companies are not people. But they are comprised of people. And the people side of the business is harder and way more complicated than building a product is. You have to start with culture, values, and a committment to creating a fantastic workplace. You can't fake these things. They have to come from the top. They are not bullshit. They are everything. There will be things that happen in the course of building a business that will challenge the belief in the leadership and the future of the company. If everyone is a mercenary and there is no shared culture and values, the team will blow apart. But if there is a meaningful culture that the entire team buys into, the team will stick together, double down, and get through those challenging situations.
So this is what you want to create in your hiring process. Some entrepreneurs and CEOs buy into "hire the best talent available" mantra. That can work if everything goes swimmingly well. But as I said, it often does not, and then that approach is fraught with problems. The other approach is hire for culture and fit. That is the approach I advocate.
Hiring for culture and fit does not and should not mean "hire a bunch of white guys in their late 20s and early 30s." Diversity should be a core value of the team building process. There are many reasons for this but most importantly you want a diversity of thought, experience, mindset, and angle of attack.
Don't hire a token woman. Hire as many women as you can. Don't hire a token person from another country. Hire from all around the world (and become an expert in our bullshit immigration system). Don't hire a token "gray haired" type. Hire up and down the age and experience spectrum.
But most importantly, hire people who will enjoy working together, who fit well together, who will make each other better. This is what hiring for cultural fit means. You start with the founding team and build on top of that. If your engineering team is serious and likes to work until midnight every day, you want to consider that when hiring new engineers. A new engineering team member who wants to go out drinking after work every night is not going to be a good fit on that team.
You also don't want to create silos in your organization. I see companies where the engineers sit on one side of the office and the sales people sit on the other side of the office. And it is like two different companies. That can create issues and cultural divides. It is tempting to set things up like this because sales teams are loud and animated and engineering teams tend to be quiet and serious. But try to connect these different parts of the organizations in as many ways as you can. Make sure everyone is on the same team and enjoys working together.
So when hiring, you must start with what you already have. Take measure of the vibe of the company, the work habits of the company, the strengths and weaknesses of the current team. It's like a jigsaw puzzle that is only half built. You are looking for the next piece that will fit nicely into what is already there.
This jigsaw puzzle analogy is why it is hard and a bit dangerous to hire up super fast. You can fit one new puzzle piece into an existing puzzle fairly easily. But if the puzzle is a moving target because so many pieces are coming in at once, it gets a lot harder. And it is likely you will make a bunch of bad hires who don't fit well into the organization. And when they leave the company, it will be your fault, not theirs.
It helps a lot to have a one pager that outlines the core values of the company. I just saw our portfolio company Twilio's version of that. They call it "Our 9 Things." I wish I could publish it here but I don't have permission from Jeff and so I will resist the urge. It has things like "think at scale" and "be frugal" on it. You get the idea I hope. This "guiding light" is a framework for the culture and values of the organization and each new hire should be assessed against the framework to make sure the fit is good.
You, as the founder and CEO, can drive this for a bit. Maybe up to the first twenty or thirty hires. But you are going to need help as the company grows because this is hard, really hard. So getting a person hired onto the team who is totally focused on the team and team building is critical. And make sure they are a good cultural fit when you make that hire. Because they are going to be the torch carrier for your culture along with you. It will be among the most important hire you will make in you startup. More on that to come as this series develops.
I remember reading that when hiring, there is a natural tendency to choose people that remind us of ourselves. It follows, therefore, that the culture will accrete around whomever is making those hiring decisions. In the early days of a business the culture is still fluid, still in flux, and the shape it will take can be a reflection of the hirer. I’d caution that no matter what age/gender/nationality mix, if a single individual is making the hiring decisions, the culture will reflect that individual. Particularly in the earliest stages, I’d urge as many founders as possible to get in on the (as you say) first twenty or thirty hires. Make sure that the first person/people you bring in with responsibility for HR reflect the founder’s beliefs (and preferably is chosen by all of them). Later, and as often as feasible, I’d suggest sitting in on interviews at random.Your line “Companies are not people. But they are comprised of people.” is completely true. No other asset has the ability to make your business fly or crash with such power. When you hire, you’re picking an ambassador for your ethos to customers, suppliers, investors and the wider community. Who would not see that as a crucial choice?
great point. although i would suggest we should all try to hire people who don’t remind us of ourselves as much as possible.
Yes, there’s a big difference between a singularity of vision, and a singularity of viewpoint.
” big difference between a singularity of vision, and a singularity of viewpoint”Brilliant line. I’m keeping that one.
Maybe one Mini Me to help with big Me’s work load, then stop the cloning there?
I love working with people who have a different perspective than me. Greatly minimizes group think.
People do that all around. Research suggests that many religions are based on some quality the creators admire in themselves. In essence, they worship themselves. People tend to adapt existing religions this way too. It seems to me that many American Christians envision Jesus as a white, Anglo-Saxon, Protestant, Republican, capitalist, militarist.
Great post. What was touched on here but I believe to be extremely important is that a set of values supersedes the authority or daily mood of any one individual, particularly that of the CEO/founders. Leaders are fallible, they are human. A culture must be created so that employees have the courage to keep the leaders accountable to the values that they created when it is apparent that they have temporarily diverged from those values. This is done by the leaders of a company humbling themselves to this set of values first, and recognizing that individually they need values as a guide just as much as the company does. I am reminded of George Washington not wanting additional presidential terms even though his people wanted him to continue in the position.
Discipline/integrity, creating a set of core values and living by them.
Excellent points! NOTE: this is an example of the kind of affirming comments that are now necessary because we no longer have a like button. Just sayin.
Thanks! (you could always vote me up as well in the absence of “likes”)
I did vote you up, but I miss the community of knowing who likes (upvotes/whatever) what.
You get more conversation and more community, ‘like’ is becoming so meaningless.
I disagree. It’s only meaningless when it’s anonymous.I don’t think Likes should replace comments, but perhaps one or two word affirmation comments. It’s actually the community I miss with the voting instead of liking. I don’t care what you call it, but since the votes are anonymous, I’m not really engaging when I vote. I like to be able to share my support publicly, and I don’t think it’s just for my own ego – I think it means more when the commenter knows who is doing the liking (voting, whatever).
Yep, I meant anonymous likes in the Facebook model.
It’s all about intent.You need intent in order to have direction, to have guidance.I think this is likely where big companies fail-out with losing culture. They don’t on-load people and help them understand the intent(s) that are within the company.You need intent for the individual to be able to self-check with,a) so they don’t waste anyone elses’ time asking questions (or dwelling in their mind, or worse feeling cognitive dissonance and therefore disconnect with the company), andb) can feel more confident in making decisions that they can later explain to others.
Wow, Preston. This is an amazing comment and a very important point. One of the best thing leaders can do is create an environment that allows honest feedback and to show their team they are serious about this by soliciting that feedback and demonstrating that this is valued and that there are no negative repercussions.This is incredible insight. How do you know this? I see that you are in private equity. Have you observed this by observing various portfolio companies?
I’m no longer at Fortress, left there in February to work on my own startup. I’ve witnessed some remarkable leaders in the past, some remarkably good and some remarkably poor… Thanks for your comment.
Great comment, Preston. I could not agree more. This is the mantra of our startup team; we discuss it regularly, and will allow no wavering from it. Humility, accountability, respect, trust.
Initial hires are like DNA of the company…1% difference can bring out human or a chimp :-). Be very very careful in identifying those 1% and delete them yesterday.Company’s DNA comes from CEO : make sure you have humanly company.Product’s DNA comes from CTO: Make sure you inject DINO’s power into that human.
Two observations:- I’m going to be REALLY interested in how to apply this credo in a M&A situation. – This makes things all the more difficult, I believe, for a newly minted CEO (an outside hire) whose job is to “upgrade” an organization.P.S. – another great post…
That sounds like a post or series of its own (outside leadership strategy).
I have hired lots of people and I have sat in on the hiring of staff by my partners. The key to a good interview is the ability to create a conversation; which involves give and take on both sides of the desk.I remember two interviews I sat in on where my partner talked for 90% of the time and then he was so impressed with the candidates because they told him everything he wanted to hear. Of course, he measured the number of times they shook their head in agreement as an answer.I told him that they were not agreeing with him but rather just nodding off to sleep.If you want dedication, passion, and loyalty from employees then you have to look in their eyes, you have to find that person who probably is a square peg in a resume of jobs that were round holes, you got to get away from discussing what they have done and focus on what they desire to do.The greatest teams are built with people who have been square pegs stuck in round holes….
Classic.Look in their eyes and ask what they desire to do …
Square peg syndrome can be frustrating, but it can also serve as inspiration. Not long ago I worked briefly with a great team who’s mission I heartily embrace. At the time I was 10-15 hour a week assistant and I was the square peg for a number of obvious reasons in hindsight (half normal pay, third of the time merging in core changes, distance, and rustiness with Ruby).I knew I needed a full time startup role, “one thing” in order to learn, deliver, and earn as a key team member. When you find the right fit the productivity gains are nonlinear.
“When you find the right fit the productivity gains are nonlinear.”Because it doesn’t feel like work! 🙂
That sounds like a hard experience, Mark — been in a similar situation. Like you I learned tons from that brief experience.Just because someone doesn’t work out, it doesn’t mean there is something wrong with them — a truly great person will not be the right fit for every environment.Sometimes you hire a great person but for the wrong job. I wrote this in a blog post once:”…a lot of bad hires result not so much from hiring the wrong person but from hiring for the wrong organization or even the wrong job. In other words, make sure you have a realistic and honest understanding of the environment and the job you are hiring for.”What I meant by the “wrong” organization is that sometimes a company’s leaders see the company differently than other team members and have missed the opportunity to receive honest input from those team members.
Trying to leave great impressions wherever the winds take me, and I’m taking quite a circuitous route to business building.
Its the “inspiration” that makes good employees with potential AWESOME employees! I know that if I sit down with a new hire and ask them how things are going, and had they told me what you said here trust me, I would have locked you in!Give me someone who acknowledges their own shortcomings but is willing to work on them, and bingo, as you say, in short order “…the productivity gains are nonlinear.”Why would I want you to figure that out on my dime and then go off and give those productivity gains to another employer?
Nicely said Carl.
Awesome comment Carl. We’ve found one of the best questions to ask is “Tell me about something you’ve thought of and created on your own.” Amazing what you can get out of someone’s reluctant answer that they built their own trombone.I would also add that the key to a good interview is to not need the interview.In other words, build relationships with talented people before you need them. Be a “go-to-guy” in your industry, geo, etc. It’s a lot easier to hire great people when you already know who they are, and they can’t wait to work with you.
Oh yeah. This is where serial entrepreneurs shine.
absolutely @andyswan:disqus … i tell my team this all the timeALWAYS BE RECRUITINGi keep a running spreadsheet of people i want to work with
Ditto. You never know 3-5 years from now, or longer, what resources you’ll need to bring together.
Relatedly- always be helping other people recruit / be recruited.
agreedI look at it as recruiting for startups (as a whole) first… if my company happens to be the right one, bonus
I agree, Andy. In my own small way, I have done that by consistently volunteering in my industry’s professional organizations, both as committee member and (non-profit) board seat. Now that I am a manager, it’s relatively easy to hire people with whom I’ve already worked well.
Couldn’t agree more. You can get a real sense of the passion they have (or don’t have) based on how they approach answering such questions to you. And really it does just feel like conversation.Looks like it’s soon time to start to push / promote / run functions for the start-up community here!
I think one of the misconceptions of the “lean mentality” is that you only hire when you have a need or an opening. Sadly, sometimes great people become available when you have no immediate need; thus you have to hire strategically. Its better to bear the cost of a really awesome employee for 6 months to a year than it is to only hire when you have a need and then you are stuck picking from the pool that is available at that point in time.When you are in the apparel industry and you have Fruit Of The Loom just six blocks down the street its hard to be the “go-to-guy” in your industry but I did have vendors and service providers who would tell me about great employees at other companies (this really benefited us in IT) and I would tell them to have the individual contact me.
Agree on all. Good points
What you say here is true. It does require a good deal of manifest confidence in all individuals involved.
Yes Emily, it takes confidence. If you are hiring for a department, small company, or a start up, the person you interview could reshape your organization.
That is the hope, right?
Well put. And I would add, even if you do a great job of open ended questions, you have to BELIEVE the answers.It can be easy to rationalize that a great candidate who is missing one key skillset will work out. But wait…they just told you they dislike that and aren’t good at it. Who are you to not believe their answer?
Having read enough job openings on Indeed.com over the course of the last three months, I would find it hard to believe that that someone would get to an interview missing a key skill set.Personally, I think the folks that write these job ads could shorten them to “…must be able to walk on water on weekends….”Everyone has a great job at a fun place to work, looking for awesome entrepreneurial self starters, and by the way you will report to the …..It shouldn’t be hard to BELIEVE the answers if the job opening is believable….
Here’s what I mean.The job opening says “commanding attention to detail.”During the interview, the candidate seems really great on all fronts, and all of the answers are home runs, except for one little red flag when they say: “I’m really more of a big picture person than a detail person. I tend to get lost when it comes to details.”It’s easy to rationalize yourself into thinking you know the candidate better than they know themselves. And my point is that you have to believe their answer.
Aaron…the difference between a dreamer and a visionary is that a visionary is not only a “big picture person” but also a “detail person.’Someone who tells me they are a “big picture person” is someone that is telling me that they like to daydream and blow smoke up people’s asses with big talk…You can’t get the big picture without the details….
I never understood the posts myself – do they want to grow people, do they even want to hire real people?
This is a classic fail of most (particularly higher level or inexperienced) interviewers. It is call “leading the witness” and something I preach against continually with our leadership. This error in approach comes about for many reasons, but two chief ones: the hiring manager feels an interview is a time to share the culture and fit of the company by droning on and on about the company, the role, the challenges, how the need came about, expectations, etc. Second reason, people are inherently uncomfortable with silence – but it is absolutely key if you are going to be an active listener at least 70% of the time to live with pregnant pauses, and silence as responses are thought out…without continually filling in the blank and guiding “the witness” along in their response.Interviewing is like golf – most people suck at it, no matter how often they practice. But when you hit one beautiful shot, or make that perfect hire, wow.
My only nitpick on focusing on what they desire to do is everyone is a fantastic employee…hypothetically… ;).
One of the first questions I ask is whether the candidate has any initial questions. Those questions tell me a lot. If the candidate doesn’t have any initial questions (which is a flag for me), you can ask, “What questions will you hope to have answered during the course of the interviewing process?” I tell clients to pay just as much if not more attention to the questions asked (or not asked) as to the answers given. I don’t just mean the questions asked when you invite the candidate to ask questions, but those asked along the way.If we get to the end of an interview and the candidate says, “You have already answered all of my questions.” (before they were asked) I know I have been in selling mode and/or have missed an opportunity to see inside the candidate’s thinking.
Questions they have will mirror what bad situations they’ve been in before and that they want to avoid – and perhaps more importantly be a portal into how they responded to the situations. Other things like knowing if they’d fit well long-term or not will probably be answered too within the conversation.I feel I’m lucky with my projects, as I have quite a lot planned, and so there’s room to navigate within the company – and so that I think makes people I’ve talked to so far feel more comfortable, that they’d be able to find something like like to settle into doing + that they’ll have many different things they can be working on, as to not get bored.This along with wanting to cultivate and support their ongoing learning and interests, and being supportive of their own life plans and goals, is why I think I’m going to be an awesome boss.
Thanks for this awesome freebie reminder Donna
As a frequent square peg I greatly appreciate this comment.
Everyone is a square peg someplace…..
I love my square-peggedness!
Part of the recruitment process of my former employer McKinsey were lots, and lots, and lots of interviews. After 2 discussions we figured out whether you could add up numbers, the other 10 were very useful to make sure you could fit in.Intuition is useful to size up cultural fit.
yes. and as Carl says in his comment above, real conversations help develop that intuition
And that “intuition” comes after a lot of experience.
Different experience for different tenures. When recruiting a very junior person, having a culture check by a similarly aged person is useful as well.
It’s great to get different data points, and to involve the right people to do so. The art is in how you weight them and add them up as you make a decision, and that’s where experience helps. It’s an algorithm. Maybe “intuitive” people develop better algorithms, and run them faster and better than others…
Why do you think this process failed (or do you disagree with that characterization?) with Rajat Gupta?
Ha!Yes, the Rajat process is difficult issue for McKinsey. What he is in trial for happened all after McKinsey, and McKinsey cut off all dealings with him.Going back to the recruiting and training process though, the Firm did a pretty good job at creating a culture. After the introduction program, you could trust a 23 year old with some pretty big responsibilities and she would “do the right thing” without rules and instructions.A big part of it I think was the “obligation to dissent”. Even if you are 23, and you do not agree with something (and these people were often closest to the numbers), you HAD to open your mouth and speak up.
Yup, large companies are notorious for the 7-10 interviews that they put candidates through, especially to see how they would work with all members of the team. I think startups can learn a bit of that, and not rush into hiring decisions.
Do you believe that taking someone on with an initial probationary period is a good idea?
in certain very specific circumstances it can work. it is not ideal.
Whoa, this stopped me in my tracks. WOW! I’m so glad you’re doing this series. I have always taken the 90-day trial period (don’t like the term “probationary” and the term “trial” is more mutual) as a great practice.Firstly, it defines a level of expectation as of hiring that we expect the new hire to find their wings and establish themselves during that time interval.Second, it sets a proper tone with the other team members to be good hosts. Some companies are very unwelcoming to new hires especially when that new hire is replacing someone who was fired or quit or if they are part of a new initiative that isn’t widely understood or accepted. It sort of “loosens the noose,” if you will and keeps everyone a little more open-minded.Third, if things don’t work out with the new hire, it provides a nice friendly terminus where the reaction is not overloaded with claims and accusations based on false expectations. There is a clear line in the sand where the new hire doesn’t make any HUGE purchases because everyone is just testing things out seeing how they go.Finally, if things work out great, it gives a wonderful rite-of-passage where the hire becomes “official” which usually creates a wonderful opportunity right when it is most meaningful because right at the start of the four month mark is when you kind of feel like you are part of this company now and it is time to unpack your bags and start making life plans. It is like a seal of approval that also creates a wonderful team-building moment for those “right” hires.For me personally, I also like to pre-negotiate a bump in pay after the first 90 days. This allows for a bit of savings initially in case the hire didn’t cut it and it is enjoyable to honor that increase to fulfill a promise as their employer… it builds loyalty. I have even bumped people higher than I promised if it turned out they were rockstars and everyone loves them… wonders how we ever got along without them, which thankfully also happens. Part of that meritocracy thing I mentioned earlier on the hiring this also includes a RESPONSIBILITY on the part of management to let your people know it when you think they’re doing a good job.The trial period concept gives you a nice inflection point to make that first, in my opinion, all-important first gesture of saying, “Yes — we made a good choice with you. You’re good at your job and we want you to stick around. Also tend to attach other benefits to that moment — things like stock options, 401(k), health benefits, etc. that are a pain in the ass to undo if you hire someone and a month or two in you find out they are nice people but they just don’t mesh with the team or their work just doesn’t cut it.Fred, I must say I am glad this came up and it shows how important this series is. I think most of us have taken it almost as a given, as a de facto best practice to do these 90-day trial periods.I am REALLY interested in the sage wisdom you have to share on why NOT to do this. Candidly, I have a bit of a blind spot on this because I’ve had such good experiences doing it and bad ones not having done it. But I also have tremendous respect for you and how you see the world. There is some deep insight on the other side of my blind spot and you see it. Pray-tell what is it? Fully open to looking at this in a completely new way.
i think it is very hard to hire the best talent if you aren’t willing to commit to them
The people who are best-in-class at what they do aren’t insulted at that. They know they’ll hit it out of the park in terms of THEIR performance. This is also precisely why I like the more mutual terminology of a trial-period. They are testing US out too. After all, like you said, it is about culture and fit, right? So this is a civilized way of saying that we have mutual respect for one another and we’re going to date before we get married.
Few people, if any will see a “trial period” as a two way street. For both pragmatic career reasons and for the simple fact that all new hires interpret a “trial period” to be a probationary period…lipstick does not change the probationary pig :).I will politely disagree with the 90 day trial period for most hires for two chief reasons (although there are many others). First, there are always an inordinate amount of separations that occur very close to that 89th day. And if a business is being honest with itself, it likely knew it was a non-fit well beforehand. Same can be said for those converted following the 90 day period. You likely knew very early on that they were rock stars, so if you were willing to convert them early on then why have a 90 day period at all. ‘Employment at will’ is a beautiful thing in most states; save of course the People’s Republic of California.My second point is simple. Startup tech talent is in a heavy sellers market. 90 day trials, unless specific circumstances are at play (out of work, consulting at present) will not secure you top talent. You have to recruit within the context of your current labor market conditions.
Isn’t the proof of the pudding in the eating? If it tastes bad I’m not gonna wanna buy another one.
I find you have a much nicer way of going about probationary periods – I know people who use the probationary period to get work with the plan of junking the person afterward.Though I think you need to be up front about why and how you do this to your staff and new hires (the way you are here) if this is going to work, especially in an economy plagued with contract gigs.
I’m glad you brought that up, @ShanaC:disqus. Similarly, when someone IS being hired on a project basis, we call it that. We clearly establish that when the project is done, everyone moves on.There have been times when we hired someone just for the term of a project but the team that worked with that person said, “Hey, we like her” or “We like him”… “We’d love to have her/him on permanently.” …and suddenly we’re talking about something more. Love when that happens.The point is being honest and upfront about the purpose and intent of the hire… and not to abuse these practices to achieve the opposite.
We don’t hire at will here (labour laws etc.) and once you hire someone for a full time position it’s quite difficult to let them go, so probationary periods of about 3 months are the norm. The only effect it has is mandating that you review your hire within 3 months.
In my view, it is a good practice to have regular periodic reviews with or without such a mandate. Besides, three months into a new hire is a very good time to “take each other’s temperature” in any case.
Absolutely agree. The mandate arises in this case because it will take at least another 3 months of performance management to walk the bad hire once the probation period ends (unless you can get them to agree to leave, or they commit some summarily dismissible offence).
Thanks, Fred. I love this post. May be the most important topic you’ve touched on for any entrepreneur in a pre-formative startup. The clarity here makes it a must read for founders at that stage. If they don’t get this right, it’s going to be a challenge getting the others pieces to fit. We’ve all seen it too many times. Since I’ve decided to base my Internet business in Charleston, SC -not ‘yet’ known as a tech/startup hub-this has been one of my biggest concerns. No longer. Anyone launching outside of the best known startup communities has legitimate concerns about the talent pool depending on their plans to scale. I hope they will now prioritize based on “culture, values and fit”. I know I will now.
Charleston is a very hip, new economy city that has such a wonderful quality of life that you will have no problem recruiting talent. If SC did not have an income tax, I would live there.I own several business interests in CHS and would be glad to lend you some hot box space if you need some to get started..
Thank you. I appreciate your response and offer. I’m actually heading to CHS later this month to meet with Charleston Digital Corridor regarding Flagship 2 space; along with a web designer/digital brand agency. I’m interested in knowing more.
This is an exciting start to the series, Fred.My favorite part is your reference to hiring “token” team members. I’ve stepped into some offices where it was fairly obvious someone contrived that aspect of their staffing as if to fill some imaginary quota. Diversity is a wonderful thing and it should be encouraged as much as possible. But hiring people solely on that criteria is as boxed-in a way of thinking as is it’s equal opposite. It is putting the cart before the horse.Great companies hire and advance their people based on a meritocracy. Each team member is there because they’re great at what you do and they cultivate great connections with the rest of the organization to deliver a great performance.It may seem counterintuitive, but a CEO who bases her hiring practices first on the MERITS of her company’s team members — on the “content of their characters” and their individual contributions to the actual work without allowing race, gender, or age to distort or bias the decision-making — will tend to actually achieve a truly diverse workforce. Let it happen organically by putting the focus on MERIT.
Biodiversity is a measure of having a healthy ecosystem. Genetic diversity increases the chances of adapting to environmental changes. If your business is change and you want to succeed, diversity in your Team as a key part of your culture is not a nice to have, but a survival strategy.
Love this. I think that’s why Canada will continue to be successful in the world as we’re taking diversity head on with promoting multi-culturalism, etc.. It really helps unite the world, allowing families and people to see that everyone really is generally the same – we all just want to be happy, free, and be able to survive; Sure, there are always a few assholes – though you deal with them accordingly..
Well in the diversity front, I’ve also learned a thing or two by working with some assholes including why to avoid being one 🙂
Fair enough! 🙂
So it’s like doing a jigsaw puzzle, but different. The picture is in your head, you have to find the pieces yourself, and if they don’t fit together you can’t use a saw and hammer (even if you’d really rather like to).
By the way, kudos for referencing Twilio. They’re an awesome company that have some great ideas about shaking up telephony and IVR apps. I hadn’t realized they were a portfolio company of yours, Fred, until now.They helped us solve what would have been a huge project challenge had they not existed. It was almost laughable how easy the implementation was especially compared to what we THOUGHT we were looking at. I would absolutely LOVE the opportunity to team up with them in the future on something bigger.Twilio rocks, y’all. I hope they’ll share their “9 Things” with us… if not publicly on AVC, at least privately by request.
twilio is amazing
Diversity and values, that’s the ticket. Well said.
Typically, organisations hire for skills yet fire for ‘attitude’, invariably caused by conflict of values that causes poor cultural fit. So they go hire for skills again and so the cycle begins.There is no other business process, that if gotten wrong, is so costly as recruiting. Hiring Managers know this. Fear of getting it wrong drives decision making. There are so many variables in hiring that skills & qualifications become the quantifiable measures during the selection process.Evidence to back up decision making has become a key feature of hiring, relegating gut feel, instinct and intuition to a dark art that cannot be quantified. Rarely do Hiring Managers want to risk hiring on instinct for fear of getting it wrong. Hiring for skills is no guarantee of success, so why is it relied upon?I am a huge advocate of hiring for fit. Trust your instincts. Skills and experience is the one thing you can give a new hire. You can’t pick an attitude for them (although you can certainly contribute to one!!). Hiring for values, for cultural fit, has a massive positive impact on morale, engagement, retention, future hiring and productivity. It takes courage, it takes risk, it takes guts. Just like starting a business.Hire people you respect, hire people who respect you. Hire people who share your vision. Hire people better than you, smarter than you. Hire people who share your values, who’ll will challenge you, engage you, inspire you. Gather as much evidence as you can, ask great questions, listen intently, test for skills, measure capbility, but trust your gut when hiring. If something feels right, it probably is.Last but by no means least the best recruiting advice I ever received was simply “hire slow, fire fast”.Great post and great comments here.
“organisations hire for skills yet fire for ‘attitude’,” That is very true. Skills are foundational and are easier to detect. The attitude can change and deviates over time. If it deviates too much, that’s the end of the line.
Trust your instincts is maybe the most important advice, but only after a fair share of mistakes you have made to develop your instincts.
As our friend Ron so adeptly said, “Trust but verify”.
Diversity should be a core value of the team building processFred, two questions related to this:1) To what extent is this true, in practice, of your portfolio companies?2) What are your thoughts on Max Levchin’s comments about this to the contrary:Max Levchin: The notion that diversity in an early team is important or good is completely wrong. You should try to make the early team as non-diverse as possible. There are a few reasons for this. The most salient is that, as a startup, you’re underfunded and undermanned. It’s a big disadvantage; not only are you probably getting into trouble, but you don’t even know what trouble that may be. Speed is your only weapon. All you have is speed. […]The early PayPal team was four people from the University of Illinois and two from Stanford. There was the obligatory Russian Jew, an Asian kid, and a bunch of white guys. None of that mattered. What mattered was that they were not diverse in any important way. Quite the contrary: They were all nerds. They went to good schools. (The Illinois guys had done the exact same CS curriculum.) They read sci-fi. And they knew how to build stuff. […]One good hiring maxim is: whenever there’s any doubt, there’s no doubt. It’s a good heuristic. More often than not, any doubt precluded a hire. But once this very impressive woman came to interview. There were some doubts, since she seemed reluctant to solve a coding problem. But her talk and demeanor—she insisted on being interviewed over a ping-pong game, for instance—indicated that she’d fit into the ubernerd, ubercoder culture. She turned out to be reasonably good at ping-pong. Doubts were suppressed. That was a mistake. She turned out to not know how to code. She was a competent manager but a cultural outsider.
there isn’t enough diversity in the tech sector in general. max’ views are pretty typical.
What about the first question, about the extent to which your views on diversity are shared/put into practice by your portfolio companies?
I thought I had addressed that. We can all do better.
As we all start doing this better all industries will improve.
As we all start doing this better all industries will improve.
With a new start up, I see the point regarding the players not being too diverse. If you were purposely look at going for the diverse, you’d need to have a veteran in the driver’s seat who can keep the ship moving forward, being direct with the diverse personalities.Of course, I think diversity is good. You just have to have good diversity and not waste your time with BS.
For a great example of a public display of corporate culture, you could do worse than point to SEOmoz and their TAGFEE code: http://www.seomoz.org/blog/…
I love that they give behavioral examples, really valuable in developing shared understanding. It’s one thing to state your values. It’s another to operationalize them.
It even played a part in their raising funding http://www.feld.com/wp/arch…
Thanks for the link.
The diversity part of this is suspect. Hire on merit. If they happen to be a different gender or skin color or nationality, great. The core values of the company need to be strong-and to a certain extent, diversity will force you to have strong core values since there are different cultural norms for behavior between groups-but if everyone has a common core company expectation of behavior it won’t matter.After reading the book on Jobs, I like his interview process. Talk for a little, then go for a walk. On a walk, people react differently than when they are formally sitting across from the table. Young companies are hiring partners not employees. Those partners are going to enhance the culture the founder wants to build and instill it repeatedly into everyone that comes in behind them.I love the Lazear-Gibbs concept of The Risky Hire way of thinking about adding people.http://www.amazon.com/Personnel-Ec… It’s all quantitative, and not touchy feely.
That kid who choked in the interview but Jobs saw him later in the lobby and the kid shows him his work. Hired on the spot.
Talk for a little, then go for a walk. On a walk, people react differently than when they are formally sitting across from the table.Helps also as it allows you to avoid eye contact which can be uncomfortable for many people. Downside is you don’t get to see the others persons reactions. When trying to sell someone you need to know their hot buttons and their face usually shows that. When judging honesty based on facial reactions same thing. You want to study the facial reactions. Otherwise you need to rely totally on vocal inflections (and of course what they say).
Love the core values concept. If anyone has a set that they can post, I’m sure it would be helpful for all.
The other part of the hiring equation is to be able to fire intelligently too. Some people, not matter how good your hiring process, just don’t fit once on the job.It is best to best to be direct and confront this right away. Thinking people will adjust is wishful thinking most of the time.It’s best to preserve the team.
Spot on. Fire directly and without delay.
I’ve never had success without an all star team.I”ve never done a hire at any level where it wasn’t a leap of faith and a belief in the person behind the skills. @tao69:disqus said is so well.Whenever I’ve settled it was invariably a mistake.Bottom line is that business is about people and getting it right takes time and luck and there will invariably be messiness and missteps.Great post. Endlessly important discussion. Fred’s best advice is to give yourself the time to figure out who you as a company as you can’t hire well without some inkling of that.
my experience as well; and nicely put.
100%took our entire team on a road trip/hike a couple weeks back. we had an amazing day [http://reecepacheco.com/pos…] but as one of my teammates said to me…”we’d have had fun doing anything together”
Great link. I just checked it out. I didn’t know you were the CEO of Shelby.tv. Very cool!!
haha yupthanks William
Hey Reece,Now I remember who you are – I watched the Bloomberg show on Techstars and you were really advocating the “sports theme” videos for your company. Are you happy that you pivoted? Nice to see you suceeding!If you guys have not seen this Bloomberg show, it is EXCELLENT. It chronicles about 6 startups in the Techstars incubator program – from idea to funding.
Classic leadership exercise — you gave them the most precious thing you own, your time. Your time outside the damn office is the cherry on top.Many people desperately want to be lead. That is not your fault. If you are a leader, it is your blessing. They not only want your leadership, they desperately need it.When the leader does exactly what everyone else does, then it nourishes that relationship like a filet mignon with all the trimmings.You are a natural. It shows..
thanks @JLM:disqusi’m lucky to have been a part of some great teams – be it on a playing field or in work – and that’s taught me a lot about how i want our team to operate… just trying to emulate that
Great post, Reece, and an excellent way to spend time with your team. Very well done.
The best way to describe a startup’s people culture is use the words “collegial” and “collaborative”. In my mind, these are essential foundational ingredients.Culture is like an organism. It’s the company’s immune system and its very core. It’s untouchable, once it gets past its formative stage. Just like an immune system rejects organs that are foreign to it, the company culture will reject a bad hire that doesn’t fit.So, don’t make the mistake to rush into hiring decisions because the skills are there and you needed them yesterday. The culture fit is as important as the skills/experience you’re looking for, yet more job descriptions are filled with skills/experience requirements and tell little about the company’s culture. I still recall the newspaper job posting that got me hired at Hewlett-Packard in 1982 was 3/4 about the company and its values and 1/4 about the job itself.There is a WAR FOR STARTUP TALENT out there. And your CULTURE is a WEAPON you have,- all other things being equal. Create that environment that will attract the best talent, and you’ll have an easier time finding it.
Good point, William. Culture is a weapon in the war for talent. However, I have seen culture win out even when all things were not equal. I have seen culture win out over pay and benefits and even job title and industry. Not as much in early career candidates, but as careers progress and people experience the pain of working in a poor culture and/or the thrill and productivity of working in an enjoyable culture — and more importantly, one that is a fit.And I will say this every chance I get — the real war for talent is in retaining your hard-won team members. And this is where culture rules.
Very true. Retaining and allowing them to grow is as important as recruiting.
I wholeheartedly agree with using the core values of the company as a gauge to hiring. For myself, not being able to agree 1) with the vision of the company, and 2) how the company has decided to get there means that for me the *employee* it will be a bad fit.My other $0.02 to add to this discussion is that management has *a lot* to do with the vibe of a company. For the implications of that, see @facebook-525700242:disqus ‘s comment: http://www.avc.com/a_vc/201…
Good disrupt interview. Enjoyed your thoughts on the Tech IPO valuation.
I love your points about avoiding token people, however one of the overlooked points of this piece that I love is your note about keeping teams together despite their differences. I think this is one of the most valuable assets of open, shared, workspace. Cubicles are one of the worst things in existence, particularly for extremely creative startups. Cubicles are on of the best ways to segregate teams. On that note, it would take some special engineers to work amongst sales people…we are a different breed.Noise canceling headphones come with hire for all engineers?
I totally agree. The casual chats you have about how/why/when you’re doing your work are some of the most valuable insights that managers can easily cut themselves off from. Headphones are fine. Cubicles are disastrous unless they’re used with discretion (to enable someone to focus undisturbed for a few hours), certainly not as someones ‘main desk’.
Funky Business advocated and articulated this very well – my battered old copy is often on my desk, as a reminder… http://www.funkybusinessfor…
My original post seems to have gone missing – try again – the old Funky Business book advocates and articulates this well… http://www.funkybusinessfor…
70% of the recruits in the financial advisory channels on wall street wash out. Yet they are Meyers Brigg-ed, Kolbe indexed, interviewed, aptitude tested, and screened for that “coveted MBA” by the HR departments who come up with the processes, claiming validity in their measurement techniques.The proliferation of personal biases in the hiring selection process, at all levels if acknowledged, can be sorted through. I have spent 45 to 50,000 hours in a career from all perspectives in the FinServ Industry and it boils down to a few things: (This not a mutually exclusive or exhaustive list)The burning passion and desire to succeed in a field or venture of choice; The willingness to work for several years like very few others are wiling work in order to live the rest of one’s life like very few others will get to live; and the ability to gather the trust of those you lead, work for, or work with. Of course aptitude does play a major role and the person of choice must have that as well.I had a mentor many years ago-still a director with a leading global capital markets firm who taught me…”you really can’t do much to control things if people are going to walk out the door unless you control how many “fits” you walk through the door.”In many cases we are all so ready to hire those that remind us of ourselves, or others we have bench marked as “success” in what ever business we are in…HR is so ready to elevate successful employees to positions of management believing they will find, hire and create more like themselves…what a perfectly counter intuitive process it is in reality. That great managers and leaders alike can come to believe their people think just like they do has caused more issues than it has solved.”Human capital” is capital. We invest in people, in a portfolio of people. We may subscribe to, in our culture creation process, similar behavioral biases that are common when investing our “financial capital” portfolio creation process. By being aware of such “Sway” we can self-actualize ourselves through the pitfalls that can plague our decision making processes…and begin to look for others who actualize in their decision processes as well. In the end, isn’t the question “How do we hire our replacement, the person we feel can bring us to new levels of success, the person who can do it better than we can, our successors? Because perhaps as leaders or managers our job or skill or gift is to find the person that can do exactly that, to sustain the value created.
Culture is the operating system of a company. Thousands of little decisions made everyday independently through the org’s cultural filter have an enormous cumulative impact. Love this post.
I agree with every word. Critically important. In hiring we have long used the word ‘SWAN’. Smart, Work hard, Ambitious, and Nice.
i like that
Don’t think there’s an easy answer to this question, but I have to ask. What would a company whose been around for 7 years, has over 100 employees, generates multi-seven-figures in revenue, and has clients across the globe do about establishing a culture?This company has never hired for culture, continues to not hire for culture, and has tremendous dissonance between it various employees and teams. Certain departments have their own culture and hire for that while others hire people who basically will work for crap pay.So, mid-sized company, zero culture ever established, zero culture cohesion, major culture dissonance between the teams – where do the founders and execs even begin?
Easy, set an intent.Edit: To further that..Apple’s intent was essentially ‘Think Different’ – how that intent is discussed in their culture could vary depending on what they are working on, though really it means pushing the boundaries of technology and quality of product.Intent is powerful, though you need to be good at understanding the implications of it in order to set a good intent. The highest up need to understand intents. This usually requires some level of empathy..Edit2: I enjoy figuring out the intents that will work with any given situation, or person for the matter, to help them move forward to where they want to go. I wonder if I should brand myself as a hard-to-access consultant for a variety of things I enjoy doing that don’t take too much time — though you really need to surround yourself in an environment in order to see what intent is needed / would help, so that’d likely mean travelling – which I’m fond of as well!
Thank you, Matthew for the response. I would say that intent is completely missing in the situation we’re facing here. We just had 2 more key staff leave today. Intent was never set and probably not on the radar of the key decision-makers.
Interesting.So what’s guiding them? Making money? They should start a religion if that’s their goal, though even religions have intent behind them…
Oddly enough, the founders all came from a weird religious organization. They have a very transformative product in the higher ed space, but at this point it’s becoming obvious money & growth goals are doing the guiding.
Hehe.It’s dangerous to let money and ‘growth’ be used as the base metric. If you throw millions of dollars advertising, you certainly can create demand and increased sales – though in a way it’s artificial and with no way of knowing how much was genuine / organic growth and if there’s true demand. If all it takes is money to get, then the barrier to entry is likely relatively low – and you’re in trouble there too. You won’t know if you actually have the best product or offering, or if your market is open to disrupting and making you irrelevant.
You’re absolutely right. For the situation I’m in particularly, the most dangerous thing is the total lack of care and empathy for our clients. This is what’s stressing me the most.They never talk about keeping promises or make decisions based on how it will impact the experience of our clients. It’s almost a like a ‘screw the user’ type mentality.
If those are the people you lost, I’d say you’ll realize gain immediately.
Without knowing what company you are talking about, I will say as a recent college student that none of the LMS’s I was exposed to have any passion in their conception. The students don’t accept them, the instructors don’t use them effectively, and all the products are essentially the same. I can just imagine the kind of company that created them is just what you described.
You’re perceiving the situation right. LMSs like Blackboard and even Sakai were not created with the goal of creating an outstanding learner experience for the student. I believe it will change, though. I’m working with a developer whose creating an LMS on a Ruby-based framework and the student and their experience is the focal point of this project.
tough one. i am not sure i have a good answer. seems hard to imagine that you could achieve all of that without a culture
Hold on. Wait exactly is a culture? What does that mean to you?
(apologies for being late to this post … having some problems with Disqus not displaying all posts intact)To Fred’s point about “hard to imagine that you could achieve all of that without a culture” – culture will exist even if there is no effect to “establish a culture.” As David noted, there are many micro-cultures existing because every person will establish their own culture, based on their values, in absence of a larger culture. Therefore, those that hire and control “rewards” will inherently form the micro-culture. A company can still achieve based on plans etc. … the real question is “what COULD have they been achieving if they had a more uniform culture?” Answer is probably a lot more, unless the departments have radically different markets, customers, etc. that demand different cultures.Some of the best guidance I have seen for establishing a uniform culture is Managing By Values … Dr Michael O’Connor. First have to both do discovery work to establish current state and then design future state like any other task. Once values are identified, key is to then go beyond the typical poster platitudes and describe in actionable terms what the values “look like” in action – and can therefore be operationalized. Changes would need to be made to the hiring, performance, compensation, etc. systems that reinforce the values. And, as stated so many times elsewhere in the thread, leaders must be lead by example.Another model that is good for describing (though not necessarily prescribing on its own) culture in actionable, concrete terms and is relatively quick/easy to learn is the Competing Values Framework. I have a short introductory article at http://bit.ly/GKsxmT that uses the framework to describe the cultural difference between agile project cultures typically used in lean start-ups and a deterministic/waterfall approach.So, can be done. First question is always: do they want to do it? 🙂
Would you mind shooting an email to our support team at http://disqus.com/support with some more details about what’s happening re: “Disqus not displaying all posts intact”? We’re happy to help.
will do –
Great insights, Mike. Yes, what could have been achieved? I run our marketing department and we have our own culture in the department. I hire people that fit our department’s culture, but our department definitely doesn’t fit the disparate cultures that exist in the company.Do they want to do it? Not right now. The directives are to hit numbers and hit revenue metrics, not fix the culture issue.
That’s usually the case. As long as culture is viewed as something “optional”, not a core part of the organizational model, and not something that can enable *higher* profitable revenue growth (for a long list of reasons), they usually will never get around to it.In these situations, it’s also usually another symptom of an “industrial” mindset, not a knowledge work orientation and understanding of what drives high(er) performance and results.Hang in there!
“Companies are not people. But they are comprised of people. And the people side of the business is harder and way more complicated than building a product is. You have to start with culture, values, and a committment to creating a fantastic workplace. You can’t fake these things. They have to come from the top. They are not bullshit. They are everything. There will be things that happen in the course of building a business that will challenge the belief in the leadership and the future of the company. If everyone is a mercenary and there is no shared culture and values, the team will blow apart. But if there is a meaningful culture that the entire team buys into, the team will stick together, double down, and get through those challenging situations.”This reminded me of how your first hires, core team, really need to be earned. If they are there purely for equity, then I can see it not working out.The people that have become interested in becoming co-founders in my ventures have a genuine interest, understand what I am trying to do – think it’s cool-to-awesome, and you’ll link right into their passion.Developers, as an example, don’t generally enjoy the act of programming – it’s what they can create with the language that excites them.I recently talked to a local CS Phd student who’s hired on to assist someone else in their work this summer, and his eyes lit up with excitement and could hear it in his voice when he mentioned getting access to play with supercomputers that crank out 100,000,000s of calculations per second.I know with anyone I hire I want to support them with their passion, so they’re evolving with their own interests – so keeping them happy, and at same time keeping them loyal and happy being productive for you. That’s why I think it would be great to work at a place like Google as you’d have a lot of different departments and products you could transfer to if you start to find interest in something else – or just need a break from the same-old.Culture is really defined by intent, as I’ve stated in replies to other comments on here. I think I shall do a blog post about this all. 🙂
.To be perfectly candid, most company leaders and most companies do not have a very well formed or articulated company culture. Many have simply grown, like cobwebs in a corner, from neglect. That is not all bad but it is not the best practice.This is in great part because many individuals do not have strong, well articulated values. Did not say they do not have values, they just are not strongly articulated. You can still be Mother Theresa but do you articulate and project your values?The most important thing you will ever do to establish a company culture is the power of your own personal example. I think that personal example is over 75% of the message.It is easy to say that you need a vision, mission, strategy and values. It is hard work to get them right. But that is a scrivener’s task. A literary exercise.Vision, mission, strategy — all have to come from the CEO, the founders. They are created. You can fiddle with them endlessly. Until you get them right.Values have to be in your DNA, they are your character and you must live them. You can’t fake them. You can discipline yourself to respect them if they are not natural.IntegrityExcellenceHard WorkTeamworkPlanningAccountabilityCompetitionStakeholdersCommunicationsRespectTrustFairnessFrugalityUrgencyMistakesRiskTechnologyMeasurementAttention to detailRewardsFunCommitmentTake each of those words and apply them to your business and you will have defined the culture of your company. Your blood will be flowing in the company’s veins.I have a little primer that contains the vision, mission, strategy and values of my company and I brief it to every new employee. It is written and I know every word of it because it is ME. I don’t just believe it, I am it. Flaws and all, it is me.An example:FRUGALITY: We ensure that every transaction delivers value for our Company and our shareholders. We will extract value from and deliver value to every relationship. We will not waste our money on needless “stuff” or extravagance. Frugality does not mean diminishing quality. Quality is an investment.RISK: Rewards and value appear when you manage risk to tolerable levels. We can never remove risk — financial, personal, professional — from our business. We will never be reckless. We will take prudent risks. Sometimes we will take daring risks. Get comfortable with risk. Faint heart never won fair maiden.
That’s a great list, and when you write what it means like you did, each and every word counts. This is the stuff you wordsmith to the tee, because you want it to stand the test of times.This reminded me of the HP Way, the way it used to be http://www.hpalumni.org/hp_…. It’s ironic that it doesn’t exist anymore at the current HP. Rather, they’ve changed the original principles, and replaced them by a page called Corporate Objectives and Shared Values.
HP was the real deal and the entrepreneurs H & P were great Americans. It will take some doing to get back into that garage..
Yup. “was” as in “will never be again” 🙁
Quite right… and it always stuck out to me the way Steve Jobs always spoke so highly of HP under the management of the original founders. He really looked up to H & P and looked at them as mentors and exemplars. They are among a very tiny list of people he regarded in that way. There is STILL great knowledge to impart from that HP Way axiom. It has been a long time since I’ve seen it and not in this context. Thanks for pointing our attention to it and making the connection.
That Board may have gone insane at some point.
Yup. I said it yesterday I think- HP’s Board is one of its problems
“I think that personal example is over 75% of the message.”Bulls-eye!”Be the change you want to see in the world” -GandhiBe a mentor, be a leader, treat people how you want to be treated.
this is what Twilio says about Frugality in their “our 9 things” “profit is the engine that allows us to achieve our goals. if we do more with less, we can do more”
Love this post.You don’t really have culture at 5, even 10 people, you have leadership as @JLM:disqus states.Big issue with a lot of startups is that they don’t have culture even at 30 people, they just have a strong leader. This is a hard one and speaks not just to the hiring process but to hiring the early people who will drive culture across, not just down into the organization.
For me, as a leader, I certainly have my intents set. Now whether these intents translate directly to the larger company culture – I can’t know that yet.I’d hope there would the foundation would be maintained by them, however I’m open to them evolving – so long as they’re not contradictory to the intents and values I have set for myself, and how I want to help move people and the world forward.
@disqus Tremendously frustrating. Posted 2 replies and both got lost.
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Reply test from Safari 5.0.6
sorry about that. i will go see if they got stuck in moderation
Interviewing, talent spotting really, is an art that can be developed into a killer skill if we will all just take our time and master it.Approach it like debriefing a spy or questioning a POW — no, I am not advocating waterboarding though that may be a useful tool — wherein your number one objective is to get them talking.They talk 99% of the time and you spend 1% of the time just guiding the conversation.Always ask them to describe their family — that is the culture from whence they have come. I want to know about what their parents did, what their siblings did, their living conditions, their stability, what they did together as a family and their favorite vacation.These are the formative forces of their lives.Don’t ask them to define their objectives in life — they will have a rehearsed, lovely, cookbook answer to that, believe me. Ask them what they would do if they were independently wealthy and did not have to work. They will reveal their soul to you.Ask them what they would contribute to if someone handed them a blank $50MM check and they will tell you their real interests.Ask them who they would invite to a dinner party if they could invite any living or dead person from the beginning of time. Me? I want to meet Eve of Adam & Eve fame. I am dying to meet that chick. Talk about a chick who changed the world.Ask them what they know about your company and you. They are joining you and if they don’t know who you are, then, well…………………..Think of the fundamental values of your company and ask them an oblique question that will reveal their thoughts on those bedrock values. Don’t be too tough on them but get the sense of where their head is right now.The whole idea is to get them talking and you listening. Refrain from the cookbook questions — tell me a time when you took a risk and it turned out good or bad. Ask them what they think about death and the hereafter. You will get the same type answer but it will likely be less cloaked in baloney.At the end, give them a cigarette, a whiskey and threaten to shoot them — ooops, sorry, wrong experience.Be guileful and draw them out, you spymasters.
Personally, and this will hopefully evolve into become a killer skill, I find the best for me is listening to someone talk about the current projects they’re passionate about is a great way to see if they have the skillset and personality and drive to solve the problems you’re looking to solve.And as always – using you as an immediate example – humour in conversation helps too, and helps show you’re someone they’d more likely be able to enjoy working with. 🙂
I thought asking about families was an HR no-no.
There’s a way to do so without being improper.
your waterboarding comment made me laugh out loud
Just last week, I read this quote from your previous post to my team:”You have to start with culture, values, and a commitment to creating a fantastic workplace. You can’t fake these things. They have to come from the top. They are not bullshit. They are everything.”I also framed the page from Inc. magazine with this quote and have it on my desk. Thanks for the daily reminder of where my focus should be.
They’re definitely good INTENTions to set, remind yourself of. 🙂
it is very gratifying to me to hear this
Sounds like we need Match.com for startups and talent 🙂 Does that exist already? Something that matches available talent with opportunities based as much on ‘compatibility’ as skill set?
Sure, it’s called every failed job board attempt since monster and careerbuilder came on the scene… 🙂
Fred, Excellent post. I consult with entrepreneurs a lot these days and the first thing I tell them is to determine what type of a culture they want because it’s the most important factor in long-term success. If you’re looking to pump and dump, you shouldn’t care about culture but that’s high stakes gambling. If one is looking to build a sustainable business and long-term value, a leader must focus on culture.The first thing I did when forming Centro was codify our values and principles in a document called The Corporate Manifesto. The goal was to change the relationship between a company and the people who choose to be a part of it. Corporate America, and most start-ups, have a broken culture.Culture is also something you don’t want to let develop on its own — you won’t like what develops. A culture is something as the founder/CEO you must focus on. A fish rots from it’s head and you don’t want a rotting culture.I’ve seen a bad culture tear down great companies from the inside out Although we’re not perfect, we’re doing the best we can. For a digital start-up to be ranked two years in a row (’11 and ’12) as the best company to work for in Chicago by Crain’s is humbling and encouraging. Focusing first on the growth, happiness and well-being of your employees comes first. If you take care of them, they will take care of you both in good times and bad.Thanks for writing this post.Shawn
i like the word manifestothat’s what i was talking about when i mentioned the “one pager”
I’m very late to the party today, so I’ll just say that I agree with your emphasis on “fit” over “perfection or super-stardom”, Fred. When you become the next Apple and are looking for a new CFO, you’d better hire the “best”, but identifying the culture you want in your organization and building your team for fit is what contributes to strength and resilience in the process of conquering obstacles, especially younger teams (not age, but newly formed).
better late than never dale!
You need a culture of getting things done… That’s the one culture that makes a difference, and it’s been argued that there is a very specific set of behaviors for that culture to exist (work hours, etc play a role too) The leader has to change her own behavior first to where she Knows her people and her business, insists on realism, sets clear priorities and goals, rewards doers, etc. Her key hires should be people that energize others, are decisive on tough issues, get things done through others, and follow up religiously.You spread the behaviors through Social Operating Mechanisms… cross-functional communications whether meetings, emails, memos, etc. where people from different areas of the company share their values and perspectives on a regular and consistent basis. If you instill the right behaviors in the company, then the right behaviors cascade, etc. Old proverb: You don’t think yourself into a new way of acting, you act yourself into a new way of thinking. Same for your organization. This is all from the book “Execution”. The author Larry Bossidy is said by some to have been one of the most effective managers of our time.
Long time listener, first time caller.Anyhow, what about the _first_ hire? I realize that what you have written is good for any number, including 1, but I perceive a different nuance to the first few hires, as you are essentially establishing the culture of the company. Furthermore, your labor costs are increasing drastically with each hire (percentage wise). What’s the best way of choosing hires 1-4?
those who believe in you and what you are doing enough to drop everything including a salary to join you
been there done that
Seems obvious but cultural fit should not trump competence. Sadly have seen that happen.
· Honesty in alldealings.· When in doubt,admit you don’t know – and that you’ll get the answer ASAP.· Along with that,be humble enough to know what you don’t know.· We don’t pitch,we have conversations.· Under-promise andover-deliver.· Controlexpectations.· Believe in yourcompany’s mission, intent, strengths, and accomplishments.· With that beliefwill come confidence – always an advertiser turn-on.· Be realisticabout our weaknesses and head them off at the pass – the advertiser will findout the truth eventually, so take the opportunity to address them head-on andstay in confident control of the conversation.· Speak with care,and listen with even more.· Don’t make apromise you are not confident you can keep.· You are thespokesperson and face of the company – which means you occasionally have totake one for the team. Be ready to express your unwavering support for yourteam, and don’t be afraid or too proud to admit “we” messed up. It happens.Just make every effort not to repeat the error.· Elicit as muchinformation from the advertiser as you can in every circumstance; you can neverhave too much client data.· Treat alladvertisers with the same level of respect and privacy you afford all others –fairness in all dealings.· Communicate withas much frequency as necessary and with efficiency – have respect for yourclients’ time.· Take the highroad when it comes to the competition.· Internally, treatthe AdCloud Media team as if they were your best client – communicate well,show respect, have integrity, and address issues head-on as adults.· Do not get tooattached to your title – we all chip in where and when we can around here.· There’s a fineline between stalking and diligent follow-up. Know that line.· Patientpersistence wins the day.
There are many reasons for this but most importantly you want a diversity of thought, experience, mindset, and angle of attack.I think about this all the time – particularly whether VC firms utilize outsiders to vet some of their investments in order to improve their success rate.
— does that kind of VC consultancy opportunity exist? Interested here…
…and use outsiders to vet the leadership teams of potential investments.
That is so right up my alley.
an investment partnership is just that. i don’t like inviting outsiders to participate in our process. we want to own it, live it, breath it.
After I read your comment I realized that I do the same thing with negotiations.When I sold my business nobody knew until the day of closing. (My inlaws at the time were very upset that they were in the dark).Now, when I sell domain names I only show my wife the sale when the money is in the bank by way of a screen shot. And there could be months of play by play where I am totally in a zone and don’t want my thought process messed with.Over the years I’ve found that is what works best for me, to do exactly what you say “live it, breath it”.I started doing this (radio silence) in my first business out of college. I told my dad I was buying an expensive machine and he immediately filled me with doubt and questions about whether I was doing the right thing. So I never discussed with him again.I remember one name I sold for a big amount. After the deal was done he said “I would have told you to sell it for (amount/4).”
Oops… Had to edit this one from “you” to “a person” so Fred doesn’t think I’m giving him *free* advice. lolOK, here goes… Don’t clobber me…When hiring, take all the people who use a resume and don’t give them a second look. Unless!, a person doesn’t care how much the candidate can bring to the company. In that case hire through a resume. If a person does care about who they hire. Hire the candidate who made an appointment to come in and sell theirself directly. No resume, if the candidate can’t remember names and dates from their past ask yourself why.No candidate is their “past” they are their “current” and what a person is buying is the candidate’s “future”. If a person can’t find the “right” hire without using a resume that person should not be in a leadership position. Leaders know people! Leaders know who fit “them” and “the company”, no resume needed!Don’t hire based on race, religion, or gender. Hire based on what contribution someone “will” make to the company from now into the future. Someone of a particular color that was adopted by people of another color may not bring with them the diversity you desire. It’s all mentality and behavior not race, religion, and gender.
that’s a great attitude. not sure it scales. but i love the approach
“not sure it scales.”I expect you’re right. When an organization gets past 30 employees (as you stated). It will get difficult to hire people to do the hiring, who have the same “focus” as the founders or startup team had. In fact, given your experience, I’m gonna’ just go with your view and figure 30 employees is where things change in the hiring dynamic.
I contract for an aerospace company with no discernable culture, developing a launch site in a place where no one wants to be. And many of us are mercenaries. I’m watching “If everyone is a mercenary and there is no shared culture and values, the team will blow apart” occur on a near daily basis. Yet management doesn’t seem to understand why it’s happening. They just watch their precious schedule slip farther and farther into the distance. There’s little incentive for any of the employees to double-down, and the ones that have are triple- or quadrupled-down as a result!
i am sorry to hear that
Hot box space may be just the thing. Like to followup on that. Enjoyed your other commits on Fred’s post.
I hear a lot of people talk about creating culture.You can’t create culture. Culture is a byproduct of action.You can tack a motivational poster on the wall that says, “Work Hard”. Or you can come into work a half-hour before everyone else and stay late to wash the dishes because you’re too small to afford a cleaning service.The byproduct of the second set of actions will likely be a hard-working culture. The poster will do nothing.Vision statements and lists of values are good reminders and can reenforce or clarify an already existent culture, but they won’t create one.Fit then is not a question of how you feel about a person, which is difficult to measure, but about their past actions, which is much easier to measure. Does this person take on extra projects? Is professional development a value? Do they donate a percentage of their time to nonprofit work? The last time they failed at something, what did they do next?If they do the kinds of things that the rest of your staff does on a regular basis, they will probably fit into the culture.
that’s an important point
Lead by example; reward /incentivize the behavior you want to see; create an environment that is conducive to more of the same; encourage communication always.
Long time follower, first time posting…VP HR in biotech. Great blog post and have read every commentary. Looking forward to digesting each piece of this series.Top 3 so far from comments that really resonated with me (my apologies for not catching the names, will do better next time):1) Believe what the candidate tells you in terms of what they want to do. My experience: leadership falls in love with a candidate and sees their potential contributions…in the area the leader wants them to be in. This is particularly tempting in a small company. Sooner or later, there is a reckoning. Its better to let them continue to grow elsewhere and bring them on when your company has the right position for them.2) I loved the comment about contrast. This is so important when a team needs to come to a decision, or a leader is torn between two paths. Contrast clarifies and crystallizes. Diversity, however you get there, is #1 ingredient for contrast. However, if open debate is not supported and engrained, diversity makes no difference.3) Culture is the interpretation by a third party of same actions taken over time. Employees are like children. They see and hear more than you think. What you do speaks louder than what you say. Be authentic and human. They respect that and will follow.I love this post and discussion. I wish this type of discussion was a top priority and took place at every company starting from the top and cascading through management. Then HR would not have to pull together analytics, statistics and benchmarks to prove why this “soft stuff” is important. If your HR does this, first place to question is…does leadership place enough importance on the issues that HR keeps harping about.Recruiting tip: put in place the supreme court method when discussing candidates. Make sure the whole interview team is present (for those not present, have them send feedback to HR). Have pros and cons column on whiteboard. Go around the table and have each person do a monologue that gives 3 pros and 3 cons, and comments…no questions or comments from others until this is done. Only pros and cons are recorded on whiteboard and must be job related. Then, discussion can ensue. Schedule 30 minutes for whole session. This process makes sure everyone gets their info on the table. Otherwise, group think and group coercion takes place before everyone’s input is heard. Really simple and effective.
great comment. i am glad you like the post and the discussion since you live this every day
Great comment. Learned a lot from your response in addition to Fred’s post.
Great post. Here is what I’ve seen really work well.For the first 5 to 500 hires:(1) Screen for attitude and cultural fit first – these form the foundation. Then screen aptitude. Don’t worry about skills – they can be easily acquired.(2) Hire late, fire early. Its about fit – Nothing personal! The cost of hiring an inappropriate fit and dealing with it is crippling.(3) Hire folks that will increase the average and diversity of the team. Don’t hire otherwise – better to delay. (4) Hire on a continuous basis – this is a process. Its like buying when the right talent is available, not the other way round. (5) Involve all the key people in the hiring decision.During the hiring process, make sure that you do not box somebody into a role.Although it may turn out that the person may end up doing something specific. Malleability (a derivative of one’s attitude) is very important for an early stage startup.Remember that you are pretty much creating the primary building blocks of the company which is then going to be sequenced into the company.Remember that hiring is just the first step. Like buying raw material for a product – you need to do many other things to make it an effective product that works for you.Nick
Here are some articles I think everyone should read who is interested in “culture and fit:”http://www.forbes.com/sites…http://www.forbes.com/sites…http://blogs.wsj.com/atwork…
Great discussion. Valuable insights. Having hired many and experienced the crippling impact of a bad fit, I am always interested in new views to this challenge. Based on industry stats I have seen, the #s of executive washouts is staggering. Part of the issue is that even the most comprehensive interviewing process relies too heavily on a single source of information about the candidate – the candidate. It’s like a first date and everyone is doing their best to impress by giving the right answer no matter how many different ways the question is asked.3rd party insights from references often happen too late in the process (after a leading candidate has been essentially selected) and there is less rigor to the reference questions which rarely dig deep into the key leadership qualities needed to enable the business to scale. As a result, leadership bench strength is weak. I am experimenting with a reference survey process to provide more reliable data about the candidate earlier in the interview process.
I follow the Bill Bellichick hiring philosophy – go for value. Get the players others have written off, who are frustrated at not winning after doing all the right things and now are said to have bad attitudes, the guys/gals who did the blocking in the trenches so prima donnas could tap dance into the end zone, the guys who had to fight just to get playing time, the guys who didn’t get free rides to top programs but had to slug it out with no prime time coverage — those are the guys you can go to war with, who will be loyal, fearless, honest, committed – that’s the team of misfits that will get you to a Superbowl.
Well said. Culture is how you scale a company. And the best culture is one of getting things done. Some argue it’s the only effective culture to have, and argue that it’s a very specific set of behaviors (although work hours, etc. play a role too). You as a leader need to know your people an your business, insist on realism, set clear priorities, follow through, reward doers, expand people’s capabilities, know yourself, etc. As you hire people you need those that energize others, are decisive on tough issues, get things done through others, and follow through. This is the foundation of a culture that gets things done, because the behaviors the leader adopts become those valued in the company. And those hired become the ones that spread the behaviors.You spread the behaviors through Social Operating Mechanisms… Cross functional meetings, memos, and emails, etc. where people from different areas of the company share their values and perspectives on a regular and consistent basis. If you instill the correct behaviors in the organization, then the right behaviors cascade into the company, etc.Old proverb: you don’t think yourself into a new way of acting; you act yourself into a new way of thinking. Same for your organization. This is all from the book Execution, written by Larry Bossidy, and he’s regarded by some as the best management practitioner of his generation.
Bravo! As a woman, foreigner who seeks for the job, It will be really lucky for us, if all of the CEO can open their minds to absorb the diversified talents fitting to companies’ culture.
Fred, fit is really important. How do you interview for it? Are there any general questions? Will it come out naturally? Do you need a special interviewer to figure it out? Can you please share your thoughts on this?
get into a real conversation about something meaningful
Apologies, I am not quite accustomed to new Disqus and was posting this from my phone (so you now have 2 posts from me because I thought that this one has disappeared).I have been reading your blog for a few years now, but haven’t left a comment until now. I am sorry if I misunderstood the etiquette – I will learn.What I was trying to say – I am looking for practical advice/tips/best practices on how to hire for fit. You post above says “it’s important to hire diverse individuals that fit into the picture”. My questions was “how?”. If you’re writing a post about it later in the series – sincere apologies. If not – it would be great to have one (or guest post). View it as piece of customer feedback.If you’d like my thoughts on the subject – I think that everyone on the team should know how to interview, should be encouraged to interview and should be able to interview for fit. Naturally some people will be better at it, but anyone can improve given practice and feedback. From my experience, competency based questions work: e.g. tell me about the most difficult customer you had to deal with, – allows you to assess how the candidate will handle your customers and how they think about different issues in retrospect (are they self-aware, can they improve?). I don’t think that competency based questions is the answer (or best practice) though. I’d like to learn what other tools are out there.I am also concerned that when I interview for fit I would tend to hire someone who thinks like I do. It’s not very diverse, is it?I hope this sounds more like a real and meaningful conversation.
no apologies necessarywhat i meant with my cryptic comment is you need to get into a real discussion with the candidate. a real honest to god conversation where you are just talking as regular people. that’s how you will learn the most about them. get their guard down.
Oh, I see! I totally misunderstood your comment :)Good advice – thank you!
Fred, is this post targeting hiring practices for a later stage company? Because I’m having a hard time understanding the value of diversity hiring for an early stage startup where the focus needs to be on building a quality product quickly.In my experience, the most difficult thing in a startup has been finding the right team “before” starting to build the product. My definition of the right team is one that gels the tightest and has the best chemistry working together and does not mean it has the smartest people. It also doesn’t mean it needs to have diversity. In my experience a team with great chemistry produces 5-6 times better than team with decent chemistry.My analogy for the best vibe in a team is once you’ve accomplished the “Magic Johnson no-look pass”. To me this shows the team members know each other so well, inside out that they can communicate without talking too much about things and focus on making things instead.
Hi Bora. Not Fred but would like to chime in.I’ve had the benefit of live viewing a tight team with great chemistry who were really accomplished and had gone through a couple of successful ventures together. In their current product they overlooked an element that turned out to be a key component. As a result, the product is delayed and may not see the market place. With the gift of hindsight, it was obvious they did not have a critical dissenter, i.e. not enough diverse views on their product and plan from different angles.Diversity for a larger company maybe a bit of social engineering. For a smaller company it is about questioning the kool-aid. If you are a small company, the mechanism for diversity can come in different forms, i..e consultant, board, mentor, and other external review processes in the form of incubator or accelerator type “contests”. The important thing is to have someone who is passionate and bought in, and can also provide that contrasting view to ensure you do not miss the obvious. And then of course the team has to listen too.
Hard to disagree. Contrasting views are always helpful to broaden one’s vision.
I cannot wait to see what happens when JobFig [ http://lp.jobfig.com ] launches to address this very issue, and provides companies with a better set of tools to truly understand the culture of their own employees, and measure candidates against those cultural patterns. Even at zappos, where culture is very clearly defined and understood fairly well inside and outside of the organization, the hiring process was long and difficult, and still resulted in bad hires. I believe it is because it can be very difficult to come up with interview questions that truly get to the heart of cultural fit in the face of mental and experiential diversity.
Tom Laundry always said, “Draft the best athlete available.” 😉
I hired a lot of engineers when I was working at HubSpot and I liked to think about how potential hires fell into a simple quadrant graph. On one axis you have culture fit and on the other you have skill fit. If you have someone scoring high on both, hire them, no-brainer. If you have someone low on both, don’t hire them, no-brainer. But the other two quadrants are the interesting ones. Most people think they should hire the skills and work on the culture, but I disagree. I would rather hire on culture and work on the skills. In my experience it’s actually a lot easier to find the perfect skill fit, or teach the right skills, than it is to get someone to start “drinking the Kool-Aid”.
I’ve always thought that when all things are equal, new members of a team should be selected based on how well they’ll work with others; i.e. for fit. Some think the only thing that should matter is how well a person will do a job, but adding the wrong person to a team can change the entire dynamic and make collaboration more difficult. I made the mistake once, of hiring a friend thinking that because we worked so well together before, it would be the same at this new company. Unfortunately, the previous working experiences didn’t carry over and even though she was working most closely with me she simply wasn’t a good fit for the company because of the speed at which business was done. That seems like one of those issues that would be hard to prepare for, but since we were agile, we were able to make a quick course correction and the next hire was made based on skill AND fit.
Yes, maybe McKinsey had a bit more time than a startup gearing up. If you want to, you can cram in 10 interviews in 2 days though…It is not that we were bad at interviewing for fit (I think), I just takes multiple data points.
Firms like McKinsey, Accenture, KPMG make their revenues on the backs of their employees billable time…so while I think 10 interviews is excessive, it makes sense that they spend that much time to assess most importantly who might have good “client hands”, since that is where their bread is buttered. And culturally that is how those places run, as most of the interviewers were put through the same exercise.
Yes. Ignore it :-). That is what everyone is doing!!!
“DNA” has become such a cliché in business that it should be retired.
I must reread Rework. It’s looking at me on my desk.
love to do this — often get pple who are seriously thinking of leaving their FT jobs to do a freelance project with us to see if we all like working together. A great measure if it’s going to work afterwards.
People can be on best behavior for a few days.
Please do 🙂
i disagreein the past year we have invested in companies in des moines, pittsburgh, philadelphia, waterloo, and torontoi think you can build a business anywhere. it might be a bit harder in some ways, but easier in others
I really am a bit tired of this point of view… YES, there is more tech talent in SF, Boston, NYC. There’s also more companies competing for that talent. And if you look at the leadership attributes that Fred is saying are critical (culture, value, diversity) then those things are found in people (and companies) anywhere. There are pros and cons of setting up a business in any area. Without the right leadership, they will fail, even in a technology hotbed. We should promote passionate people to follow their dreams, however (and wherever) they best want to implement it.
25% is a good number to use. many times it is a lot less. but turnover can be very high.
I did not see that. And I am surprised to hear that.
Do you see a secret sauce in the companies with lower turnover? (25%, ouch!)
I cant say I do
Interesting. He said the opposite last November.
that is inconsistent with what he has said at other times. i wonder if he is just frustrated with finding tech talent. it is so hard everywhere.
Rework is great, it’s a quick read and full of easily digestable snippets
Yes. DNA and this word Hack 🙂
Did you watch the video? It was cut without context – for all I know the next thing he said was: “Psych! Shit, I don’t need the fuckin’ valley. I wouldn’t change a thing.”
That’s the truth. In SF and NYC you compete for top tech talent everywhere else you scrounge for it and try to think of ways to work with lesser skills.
Right – this is the most difficult thing about culture fit – would you hire someone who thinks really differently about the future of your industry even if overall they believe in your mission.
Great point.You want diversity so you can create situations that illuminate contrast.Contrast is the only way to discover the nuances of any situation.
Could not agree more. You could say that all of my fraternity brothers are the exact same age white guys. Could not be more diverse
+1. Great point and something that doesn’t seem to be well understood by the majority of media you see on this subject. People seem to take “diversity shortcuts” when speaking about what makes a strong diverse group.
I think we should have a post about making sentences with cliches 🙂
That’s a great question. I’d be tempted to say yes if only for the creative energy that would spark.(Also if I’m wrong, and they’re right, I’ve got a head start on any changes that need to be made 🙂 )
Sure. And I did once, but did it poorly – need to make sure you’re both pulling the train in the same direction.
I will ask ben next time I see him. He is a colorful guy
Seems so – I think I’d like him instantly.
Actually, I love your “stew” analogy. Conveys what you’re trying to say beautifully… and I agree with you. (Made me a little hungry too.^^)
That is so true. It’s been hard finding the right talent in Toronto.
You’re a pizza lover? Yeah! Next time, I’ve got a new pizza place for us in NYC.
Experienced entrepreneurs ensure that the cost of the pizza is in the term sheet, second page to be sure.I wonder how many startups should cut their local pizza shop in for a few options given the real magnitude of their contribution?.
Choice of pizza is key…both for the troops and the bosses!
Thanks, Scott. Like your last sentence.
It also depends on the project specifics. Certain big data projects need really advanced skill-sets. Other projects require less technical extremes and more market understanding and execution. I agree with you on this, Fred. It needs to be evaluated on a case by case basis.
I’ve given much thought to this over the years. For an aggressive person you have to be where the action is. More chance to make connections, meet the right people, keep a pulse on opportunities.I think part of your bias might be that you’ve spent so much time in NYC that you don’t have the seat of the pants feel of what it’s like in other places.There is a right place to be even in a particular city. When I graduated from college I opened up in Phila in “Old City”. I was told I needed to be in Center City where the tall office buildings were. (Couldn’t afford that). So, yes, I did make it work in the wrong part of town. But I can tell you I would have done much better in the center of town where good service that I gave would attract many more customers. (In fact I made it work by placing a yellow pages ad with a distinct phone number to attract center city businesses).I spent time in the early 90’s in Santa Clara etc. I was really excited to be there and wasn’t let down at all. I remember sitting in a Wendy’s and 60% of the tables were filled by people working in tech. There was “Weird Stuff Warehouse” (really cool place). The weather was beautiful for like 3 months in a row. When I spent time in NYC the energy was palpable and I loved going there (had a girlfriend and I would come up on the weekends for a few years.)