I’ve been thinking a lot about whether company culture inspires great work or whether companies that do great work have a nice side effect of great culture. Company culture focuses people on helping to create those things. It's fast becoming one of the best recruiting tools, even over legacy companies who can offer highly competitive salary packages. Tech start-ups have now taken the place of consultancies like Goldman Sachs and McKinsey as the top choices for Ivy League grads. In the end, a culture of purpose enables people - the right people - to drive the creation of great products.
In Good to Great, Jim Collins calls this 'a culture of discipline.' "All companies have a culture, some companies have discipline, but few companies have a culture of discipline. When you have disciplined people, you don't need hierarchy. When you have disciplined thought, you don't need bureaucracy. When you have disciplined action, you don't need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance."
In the end, the key to success is - and always has been - understanding people. Here's five qualities of companies that create a culture that enables people to invent better solutions.
1. Missionary, not mercenary: hire people who believe in your mission
There's a clear difference between groups that rally around a common purpose & those that exist to turn a profit. And, as it turns out, often the companies with a purpose actually turn out to be quite profitable. It’s difficult to retain staff - and costly to lose talent. Especially when Gen Y – who account for more than half of the workforce - are looking for more than just a job. Millenials, Forbes’ Rob Asghar writes, are venture consumers. “Not looking to fill a slot in a faceless company, any more than a good venture capitalist is looking to toss money at a faceless start up. They’re looking strategically at opportunities to invest in a place where they can make a difference, preferably in a place that itself makes a difference.”
2. Linked, not landlocked: enable people to work where they work best
Some of the world’s most innovative companies aren’t locked to one address. Two thirds of GitHub’s workforce, for example is remote. Wordpress’s 225+ workforce work remotely. Despite Marisa Mayer’s rather ruckus inducing memo last year to Yahoo workers banning work-from-home days, many tech companies allow & even encourage flexible working hours, including Google, Airbnb, IBM, Cisco, Twitter, & Microsoft. There are, arguably, considerable benefits to sharing an office with co-workers. It's human nature - we bond over coffee and rainy days and heated debates about the plot twist in last night's Game of Thrones episode. But, personally, I loved what Neflix told All things D “We don’t measure people by how many hours they work or how much they are in the office. We do care about accomplishing great work.”
3. Show your work, not 'just show up’: measure performance by work, not hours worked
On that same note - great culture doesn't mean working 70 hour weeks. In fact, that probably spells burn out. In the 1900s, Ford Motors ran tests to uncover what the optimum work hours were for productivity – & found that the sweet spot is around 40 hours a week. Increasing that by another 20 hours increases productivity minimally for about 3 to 4 weeks – then turns negative. It also leads to burnout. With companies like Github, Wordpress, & other tech companies embracing remote working options, showing your work instead of just showing up is a natural progression.
4. Trust, not Tracking: empower people to make good decisions
Trust, and loyalty, for that matter, in my experience, is a two way street: you have to give some to get some. A little bit of trust has gone a long way, whether it's sick days, the option to work remotely, expenses, or responsibility for projects. Netflix made waves when they offered employees unlimited vacation. Netflix' rationale was simple: employees often worked early, late, and on weekends. They don’t track hours worked per day or per week, so why were they tracking days of vacation per year? Put another way…there’s also no clothing policy, but no one comes to work naked: policies aren't necessarily the answer to every problem. Their policy on expenses, entertainment, gifts & travel is similarly minimal: act in Netflix’s best interest. (Netflix released this deck on their HR strategy - it's worth the read).
5. Hire slow, fire fast: you don't decide to marry someone on a first date. The same applies to work.
The very best benefit a company can give people is the chance to work with incredible colleagues. I've on both sides of the interview table, and the difference in the quality of work between the companies that hired slow vs hiring after 1 or two conversations becomes apparent very quickly. Reed Hastings, CEO of Netflix, calls it "talent density" - and the danger of growing quickly is that without careful vetting, it can shrink talent density. It's worth protecting - at the end of the day, your product is in the hands of your people - it's worth taking the time to make sure they're the right people.
So does culture happen as a result of great work or do companies with great products create great culture? I think it's a bit of both - selling a great product is attractive, but at the end of the day, your people are your best investment: create a culture that attracts the right ones, and your product will take care of itself.