By Iqbal Thokan
“If you want to go fast, go alone. If you want to go far, go together” (African Proverb).
Our people can be our most valuable asset to help us stay relevant, survive and thrive. Working with many businesses over the years I have come to realise that we can have the best strategy, or the best product or service with the right marketing message and the perfect sales pitch, but without the right people, our business can only go as far as we have the time and energy to take it.
While many of us know this and mentally tell ourselves that our employees are our most valuable asset, we often find that that is not how it is on the ground leaving many people within an organisation uninspired or demotivated to do what needs to be done to help us grow our business and take it to the next level. Research has shown that valued people go beyond what is expected of them and can be the force that strengthens the foundation to be built for a long sustainable future. “Customers will never love a company until the employees love it first” (Simon Sinek).
Legends are made by the tales others tell; so are legendary businesses. Every business has a story to tell, a story that can either inspire or discourage and these stories most often come from within; from the people of the business. The growth of any business is determined by some of these stories. When these stories are told it has to encourage others to want to be part of it and want to come and see what all the fuss is about, and this is can be a public relations dream come true for any business.
In his autobiography, Finding My Virginity: The New Autobiography, Richard Branson attests one reason for him attaining success and as he puts it, “it would be my knack of bringing together wonderful people”. Finding the right people with the right skill and competencies is always a challenge for any business owner. Sometimes we hire for personal reasons, a friend or family member who needs a job and sometimes we hire out of desperation and urgency because we need to fill a position quickly and most often we find that we are deeply disappointed that we made the wrong choice; but rather than find a system of hiring the right people we fall into the same trap again.
Hire people who believe in what we believe and they will work for us and help us no matter the circumstances. Hire someone just for the job and all they care about is the pay check. The very first step to having people as assets within our business is to have a culture that breeds positivity and empowerment amongst our people. Peter Drucker once said, “Culture eats strategy for breakfast” and what he was alluding to was that for any business to be successful, with the right strategy and tools, it needs to have a culture where the people within the organisation are able to execute the strategy effectively and efficiently.
For most businesses the culture within is very much driven by the values of the owner or founder and as the business grows, challenges start to arise especially if the culture is a toxic one rather than a motivating one. Some of the ways we can improve and create an environment of positivity is by having open communication with our people; I am in no way suggesting that we communicate everything, as some things we need to strategically hold back, but we need to communicate important things happening within the business like new products or product information and sometimes even the health of the business especially now during a crisis.
The culture of the business needs to be clearly defined and needs to be aligned to the values we expect our target market to gain from us. Integrity, passion and an attitude of ‘nothings impossible’ can be great values to empower and encourage our people. As the business moves along and grows, we sometimes tend to forget our core values and as part of our cultural strategy we need to find ways to continuously reinforce them.
There was once a teacher who became one of the wealthiest men of his time. Thomas J.Watson, gave up his job as a teacher after just one day and decided to take a course in business and accounting which lead him on a career path of sales and when he died in 1956 he was regarded as the world’s greatest salesman. After many successful sales jobs, Watson joined International Business Machines, or IBM as its better known as, in 1914 and helped shape the future of the company into the giant we all know today. But what made him so great? Watson knew that in order for any business to grow and thrive it needed people and more than just focus on the product he concentrated on developing an extremely motivated and well compensated sales team that could develop unique and creative solutions for clients who were unaware and unfamiliar with the latest technology. Interestingly IBM developed and grew from Watsons leadership over a period where the world saw two world wars, which goes to show what the power of people can do for a business.
People are power and having the right people within our business can help us to stay relevant, survive and thrive.
Iqbal Thokan is an experienced business management consultant and the founder and co-owner of breedingpositivity.com
Let’s say you have a business: you build bridges across chasms. What would happen if you focused only on the architecture of the bridges – put all your energy into making sure that they were well-designed and balanced – and paid little attention to the quality and maintenance of the materials used to build the bridges? You might then have a bridge that’s a thing of beauty, structurally, but is made out of rotting timbers and rusted metal.
That would be dumb, right? Not only dumb, but dangerous. And the odds are, your business would be very short-lived.
It seems to me that many companies deal with employees in this way. They focus on the “architecture” of their products or services – putting huge amounts of energy into making sure they have something that will wow the marketplace. But they don’t focus much at all on the “materials” behind those products and services – the people. And when you don’t pay attention to employees, you’ll tend to hire badly or indifferently – giving you “poor materials quality.” And then once they’re in place, they’ll tend to be disengaged and unproductive – they’ll “rot and rust.”
And research, more and more, supports this idea, that companies ignore the quality and engagement levels of their employees at their peril. The Gallup organization, which has created the hugely useful Q12 employee engagement filter, has reams of high quality data to demonstrate this fact. The “Q12 Meta-Analysis” white paper is pretty fascinating reading (even though a lot of the statistical analytics are way beyond me). The bottom line: there’s an almost point-to-point correlation between the level of employee engagement in a particular business unit, relative to its overall organization, and that unit’s composite performance (customer loyalty, profitability, productivity, turnover, safety, absenteeism, shrinkage, quality) relative to the company median. Higher employee engagement: better performance. Lower employee engagement: worse performance. (It’s on page 26, for those of you who download the white paper.)
They also offered an equation that I love: they say it’s the core equation underlying their “Q12” approach, and arises from their data:
Per-person productivity = Talent x (Relationship +Right Expectation + Recognition/Reward)
Let’s take this equation apart – so you can see whether your company is building its “bridge” out of great materials, well-maintained…or using shoddy materials and letting them degrade:
Talent: Companies and leaders that do well in this part of the equation focus a lot of attention on hiring people who have the needed skills and experience and are a great fit for their culture. This pre-supposes a couple of important things: that the hiring organization (and managers) know the skills and experience needed for a particular job, and that they’re clear on what their culture is. If companies hire purely for “resume,” for instance, and don’t think about culture, they’re likely to get folks who may be talented, but can’t integrate into the organization well enough to have that talent benefit the enterprise. To continue my analogy, it’s like buying great quality structural elements for your bridge – that don’t fit. And doing the analogous thing with employees has equally bad outcomes – data shows that when new hires fail in their first year, 87% of the time the problem is “a poor cultural fit.” Not hiring people with the necessary skills is less common, but also problematic – I’ve fairly often seen people hired because the interviewer liked them, or somebody in the company vouched for them, or they had impressive resumes…only to demonstrate, once they’re in the job, that they don’t have the necessary competencies. A few structurally unsound bridge timbers can take down the whole thing.
Relationship: I’m thrilled that this element of the employee equation now has data to support it. A generation ago, talking to executives about whether or not their employees felt personally connected to and supported by the enterprise and those around them resulted in either rolled eyes or blank looks, for the most part. I think executives (at least those I deal with) are understanding now more than ever before that if employees feel trusted, respected, listened to, and supported, they’re much more likely to respond with great work, good ideas, and ongoing loyalty. The good news: creating good relationships with employees is almost entirely up to a company’s leaders. The bad news: creating good relationships with employees is almost entirely up to a company’s leaders. By which I mean, creating good relationships with employees is, for the most part, not dependent on factors outside of your control, like the economy, business cycles, technology, competition, etc. It really is about how each person is treated by his or her manager, and whether the senior executives in the organization model and hold everyone accountable for treating each other well. So it is completely controllable – but managers and company leadership can’t phone in this part of the job: it has to be an ongoing area of real focus, as important as any other result. It’s checking the bridge elements regularly to protect them from rot or rust.
Right Expectation: On a daily basis, the lack of “right expectation” may be the most frustrating and productivity-eroding problem in organizations. When people aren’t given the tools they need to do their jobs, or when they’re not given clarity about what success looks like in their part of the business, or when they’re required to complete tasks over which they don’t have the necessary control…so demoralizing. Most people want to do their jobs well, and when any of these expectation mismatches make that hard, they quickly lose heart. It’s virtually impossible to be fully committed to accomplishing something that doesn’t seem achievable. Doing this part of the talent equation right requires leaders of a company to be truly objective about whether these problems exist in their companies, and then – if so – to take steps to correct them. It’s all too easy to assume, from the leader chair, that everyone’s clear about their job and has the tools and authority to do it. But it’s a dangerous assumption – it’s like the guys in charge of the bridge just assuming that it was put together correctly, and that everything’s attached and functional…you really need to make sure.
Recognition/Reward: This isn’t just about money. Yes, people need to be paid a fair wage, and if your company’s compensation is out of whack with common practice and industry standards, you won’t be able to attract and keep good people. But beyond that, people have a deep need to be valued and appreciated for the work they do. And while nearly everyone appreciates additional money, other forms of reward and recognition can be as motivating and meaningful – or more. For instance, my colleagues at Proteus and I conduct a yearly program for some of our clients called Leading With Impact – a five-day leadership and management course that they offer to high-potential “rising stars” in their mid-management ranks. Without exception, the attendees in these programs are pleased and proud to be chosen to participate, and they tend to go on to be the leaders of their companies. Supporting good people through added developmental or on-the job opportunities can pay huge dividends. And on an everyday basis, simply thanking people for their work, and acknowledging their contributions more broadly in the organization, is enormously motivating and resonant for most people. It’s nourishment for people’s hearts and minds. In the bridge analogy, it’s Rustoleum and WD40: substances that protect and enhance the strength and function of the bridge’s material.
When companies see their employees as “what the company is made of,” they treat them with the same care they’d treat the critical underlying machinery of any high-performance machine. Are you attending to the “human building blocks” of your enterprise…and, if not, what can you do differently?
Credit: forbes.com
Credit: neilpatel.com
Right now, candidates have more options for employment than at any point in recent history. In other words, it’s a candidate’s world and we’re just living in it. And for small businesses, that means that if you want to fill your open roles, you need to set yourself apart – and you need to have a great company culture to do that.
Now, we’ve heard a lot of praise for the company cultures of tech giants like Google and Netflix or retail monoliths like Zappos (just to name a few). But, let’s get real: small businesses can’t do anything with these examples. You don’t have huge HR teams with expansive budgets, built-in (and beloved) brand recognition, or all the perks like doggy day care centers, onsite barber shops or any other over the top benefits those companies are offering lately.
Without all the bells and whistles, most small businesses have had to be, for lack of a better term, more “scrappy” in how they build winning company cultures. In my opinion, what they are doing are the real examples most of the business world can learn from. Not to say that the large companies aren’t doing amazing things, but in the name of “stuff my company can actually do” vs. “what I would love to do If I had a huge budget” it’s time we started offering up some examples of small businesses that are doing things right – and that are actually relevant to the majority of the folks reading this stuff.
So, I recently spoke with two different small companies from two very different industries about how they go about building, defining and measuring a successful company culture. Based on our conversation, here are some steps that every small business can take to build a geat company culture:
Step 1: Define what you want your company culture and values to look like
Michael Monteiro, CEO of Buildium (a growing property management software company out of Boston) believes that to build a successful company culture, you have to answer three core questions:
- Why does our company do what it does (i.e. Why do we exist)?
- What do we believe (i.e. what are our values)?
- Where do we want to go with the company (i.e. what is our vision for the company)?
Michael admits that in the early years of Buildium, without answering these questions it was much harder to build a clearly defined company culture. “In the absence of answers to these most basic questions, we didn’t know whether we were really aligned. That was fine in the early years when we were in survival mode, but as time went on, our employees increasingly wanted to know where we were going as a company.”
Michael offers this advice to fellow small businesses: Don’t defer what’s important.
“Focus on your culture as early as you can. The perks — free beer, free snacks, ping pong tables — will carry you by for a while, but ultimately, people want to know where you’re going, and why they’re doing the work they’re doing. Without a defined culture, employees get disenchanted; they move on. And without those guardrails, it makes it hard to make decisions as an owner.”
It’s also really important to ensure that these values are part of the everyday fabric of your employee experience. “Make sure you aren’t just hanging values on a wall. Come up with something genuine to you and your company. Then think about what it looks like to live what you’ve described, what it will take to stay true to that company vision and those values.” Michael adds.
Step 2: Look at what your culture is like now – and if you need to make changes
Sarah Larson, Partner and CHRO at Third Rock Ventures, has a ton of experience building company cultures in her career. Third Rock Ventures is a venture capital company that launches and builds Life Sciences and Biotech companies. Long story short, building cultures in startups is something Sarah has done countless times over.
When asked about how she goes about literally starting a company culture from scratch, Sarah said: “Culture starts with the very first person. Whatever the circumstances are that they came to be in the company, it’s their set of beliefs and values that will dictate the initial build. It does not take long (maybe 5-10 employees) to be able to see what kind of culture exists,” she says. “This is when you can start to proactively make changes if you want to.”
For example, Sarah says that if you are worried about the energy level in a team (perhaps they are too laid back) make a deliberate decision to hire people with more energy. Or if you feel like there is too much “group think” – perhaps employees are from only startup companies’ backgrounds or from all big pharma companies – change it. “Building a company from scratch is actually the easiest cultural build. It’s changing culture once it’s ingrained that’s hard,” she says.
Third Rock Venture’s core values.
Lastly, in these early stage company cultures, do not underestimate the importance of the Board and their impact on culture as well. “Invest in board culture as much as you do company culture: In small companies the role of the board is often more intimate and connected to the organization and has the ability to have a heavy influence on culture.”
Step 3: Identify (or hire) someone who will be your people person
Clearly, hiring the right kind of personalities and backgrounds has a huge effect on how a company operates culturally. Sarah said there is one key hire though that can really help make a difference in the early stages of culture building – your people person.
“I believe that one of the most critical hires as early as possible in a company is your people person. You need that expert who is trained in culture to help drive what you are creating and help identify if it’s going well or not.” she says.
And, that doesn’t mean hiring an HR person. “Many people make the mistake of thinking that just because someone is an HR professional, they “get” culture. That could not be farther from the truth. Ask yourself, has this person ever been in and witnessed exceptional cultures? Because if they haven’t, why would you expect that they can create it for you?”
While the people person in your company is a big part of helping in your cultural endeavors, don’t make the mistake of putting the role of culture all on one person. “Culture is not ‘HR’s Job.’ It’s everyone’s priority and it should be a top strategic imperative,” Sarah says.
Also, while we hear constantly about all of the fun events and activities some of the world’s most admired company cultures do and have, we need to remember that these activities and events in small businesses are a two sided coin. “Culture is not all about social events: Don’t create a bunch of “fun crap” just because you think it will mean you have a fun and socially engaged culture. Small companies are very busy. Social events take away from people’s time to do their work. So make them meaningful,” Sarah points out.
Step 4: Invest time in building your talent brand
Your talent brand is what your employees think, feel, and share about your company as a place to work.
“I am a big believer in the power of a talent brand and the ability to articulate your culture through different channels,” says Michael. “In today’s war for talent, candidates are almost always passive. Giving them an opportunity to connect with you in advance of meeting with you, allowing them to form an opinion and then gauge their expectations once they are on site creates another level of engagement,” he adds.
Sarah says she is fascinated by how few (biotech) companies are building their talent brands. “When I was at Foundation Medicine, we were one of the pioneers in Biotech with our adoption of talent branding. Biotech is notoriously a “play it safe” industry with its branding. We saw immediate and exponential results.”
An example of Foundation Medicine’s talent brand was this highly successful video, showing individual employee stories under the broader company vision of “Transforming Cancer Care.”
Michael added that Buildium also understands the real importance of effective talent branding. “Use your culture and values to hire,” he says. “You want your employees to know what they are signing up for, and you want them to want to be a part of it. If they see the vision and understand what’s important to you, everyone can more easily row in the same direction.”
Step 5: Optimize your hiring process to ensure you are bringing in the right people
When it comes to recruiting and hiring, “taking the time up front will pay off because in a small company, getting it wrong is palpable,” says Sarah. I agree with this statement with the power of 10,000 suns. The early hires you make can not only impact your business, but also directly impact your culture too. Often, I see a lot of small businesses hire for skill early on (because of need) but they don’t place enough importance on the culture aspect in assessing new hires.
Here are some ways to make sure your hiring process is set up to bring in the right talent:
- Make sure candidates appreciate your culture and values:If your new hires align with your culture and values, it’s easier for everyone to be moving in the same direction, according to Michael. Here are some interview questions that can help you assess if a candidate shares your companies values,
- Divide and conquer in the interview process: Optimize your interviews and use your interview team to cover as much ground as possible. No one, no matter how good an interviewer he or she may be, can get a full picture in 45 minutes. Assign your team different areas to cover in the interviews (skills, cultural fit, experience, etc). If you assign different areas of the interview (and interviewers) to different subjects, it will result in deeper conversations, different conversations and a broader understanding of each candidate.
- Prioritize attitude over skills and experience:As a growing small business, the easy thing to do is hire that person who can do the job “right now” with as little training as possible. Heck – most small businesses are hiring people who are doing the same exact job they need – just at a different company. While these hires have immediate impact (usually), you need to question if they will be growing with you for years after the immediate task/need you hired them for is gone. I have seen a lot of clients have longer term success in hiring people who might not have all 10 of the 10 skills or experience they need, but maybe have 6 – 7 and are great fits culturally and genuinely excited about the opportunity. These types of hires tend to stay longer and have the ability to grow into different roles as the company grows.
- Don’t hire “mini-me”s: “Culture fit” does not mean that a new hire looks like, thinks like or acts like you and your team. Think of it as a “culture add”– is the person someone who brings diversity of opinion, thought, experience and background? Understanding this as you hire will help bring a balanced and truly diverse type of culture to your organization.
Step 6: Find ways to constantly reinforce your core values
Having programs and initiatives in place that regularly reinforce the core values that make up the central tenants of your culture is key to keeping your culture thriving. At Buildium, they do just this, starting with culture awards.
“All of our awards are peer nominated. We think it’s a great way to celebrate those who consistently live our values and go above and beyond,” says Michael.
Some of these awards include:
- The Founders Award — an annual award given to an employee who best exemplifies the core values, and represents the best of what it means to be a “Buildian.”
- Core Value “Animal” Award— a monthly award given to an employee who best demonstrates the core values. It’s actually “Animal” from the Muppets (!).
Other Buildium core value programs include “Volunteer Weeks” four times a year and company wide monthly meetings with lots of open communication. Michael believes that “living” these values also leads to a culture that can have tangible effects for your customers too.
“Some of my favorites aren’t programs at all but are the small examples of going above and beyond: Sending a customer flowers when we learned about their 30th wedding anniversary; ordering an Uber for one of our customer’ tenants who was in a bind; sending co-workers prepared meals when they and their families are going through a tough time. You won’t find any of these things in any company handbook or manual. These are just examples of our employees exemplifying what it means to be a Buildian. That’s a culture we’re proud of,” says Michael.
Step 7: Measure if your culture is effectively attracting and engaging talent
In the absence of countless tools and the resources to manage them, how do you actually measure whether you culture is one that people buy into and like being a part of?
To do just that, Michael likes to measure something he calls “Employee Pride.”
“We measure effectiveness in several ways, including employee engagement surveys, employee referral rates, voluntary turnover rates, and employee ratings and review sites. These measures help us tell whether we’re on the right track with respect to creating the kind of employee experience we want to create.”
However, Michael cautions that there is only so much you can measure via metrics. “We find that the things that can’t be measured are just as important. It’s what you can see and feel happening around you. For us, we always ask; ‘Will this help the employee see this as the best place they’ve ever worked?’ and ‘Are we setting the highest standard for the way business should be done?’ That results in an environment where employees lift each other up, and we see them doing everything they can to go above and beyond for our customers.”
Sarah thinks the recruiting side can also be an indicator of measuring cultural effectiveness. “Are you winning the fight for talent without jacking up the compensation to ridiculous levels?” she asks. Sarah also says that one measure is to simply look at the bottom line. “Most people don’t think to consider productivity and sometimes revenue [to measure engagement]. Happy people produce more. It’s a fact.”
Final thoughts
There’s one thing Sarah said that I think really nails it:
“Work life balance is not a “thing” in small companies. Own up to it and embrace it. Be honest about it. And then create an environment where you trust the robustness of your hiring process to deliver new employees who understand the commitment they are making, what will make them successful, what the expectations are of them and what they can expect of you.”
Culture is a big difference maker in attracting and retaining great people – as well as in being a high performing business too. Signing up for a startup or 1000 person company culture can be very different than joining one that has 100,000 employees. Yes, the huge multinational “sexy” companies are doing some amazing things, but what they do can be incredibly hard to learn from when your entire company is 5 – 200 people.
The building of an effective culture is ultimately unique to each organization, but the “nuts and bolts” of an effective culture for small businesses are what made these conversations with Saran and Michael so fascinating (and important) to me. Any company, regardless of industry or size, can learn from their advice.
As promised, no yoga room or office sommeliers – just some real-world examples and advice that doesn’t require a huge budget and lots of resources. Building your company culture is one of the most important endeavors for any small busines – and an effective one can be the key to hiring and retaining a highly engaged and productive team.
Credit: business.linkedin.com
Peter Drucker was famous for this alleged quote: “Culture eats strategy for breakfast.” In working with many entrepreneurs, I have found this to be very true, as the culture is the secret sauce that keeps employees motivated and clients happy. In fact, I recently read a great quote that said, “People do not just quit companies or leaders … they quit organizational cultures.”
I’d like to share with you two stories of clients for whom culture was the dominant factor in whether they were successful in taking the business to the next level or are still treading water.
Nathan founded a family-owned security services business over 30 years ago, and today, he has his brothers and some of their wives in the business. His success is in the very prestigious clientele that trust him for his services.
From the get-go, I was impressed by his entire company having this unbelievable can-do attitude. Every curveball thrown at them was an opportunity for growth. The leadership displayed a unique blend of humility and confidence. Integrity was a real goal in everything they did.
The best story I remember was when the head of security at one of their largest customers was moving to another large company that they weren’t doing business with. Quite frankly, they were somewhat happy that he was moving, as he was a real stickler for details, and keeping him happy was a huge effort.
A few days after he moved to the new company, he called Nathan and said, “I know I was tough on you guys, but you’re the best out there. Can you help me at my new company?”
Their culture statement was very impressive, and what I found was that they really meant every word. Here are some highlights:
- • Their core values were first and foremost based on the principles they lived by.
- • They believed in making a difference for their clients and their employees.
- • They really cared about each other, about their customers and about empowering everyone to do their best.
- • They believed in working together and strived for feedback, collaboration and diversity.
- • They reached for the stars and weren’t afraid to fail, as if you fail, at least you will land on the moon.
“At Security Systems, we innovate, we test — and we learn along the way.”
What is unique is that they took their culture very seriously, including everyone from the leadership down. It wasn’t empty talk or something nice on the wall. They knew that the company’s culture was the secret sauce behind their success, and they religiously followed it.
Contrast this with another client, Charles (not his real name), who from the onset insisted that processes are the answer to the challenge of their people not taking ownership and what I call “confusing efforts for results.”
His company had millions of dollars outstanding that nobody bothered to chase down. There was constant infighting, and few took responsibility. While they tried to change things, they made the typical mistake of throwing bodies and systems at the problem.
Truth be told, the ownership also tried hard to change the culture, but culture starts at the top, and as long as the leaders were finding excuses for nonperformance, everyone else did the same. Charles had a very hard time holding people accountable, and his people knew it.
He and his staff all came up through the ranks and had never run such a high-growth company. They were mostly homegrown executives with golden handcuffs. While they brought some outsiders into leadership roles, the culture that was prevalent was one of the old regime — not the new executives — and the jury is still out as to whether it will work or will frustrate them to the point where they leave.
So, what are some of the lessons learned that entrepreneurs, especially, need to be very careful about?
1. Culture is created by the behaviors you tolerate. If you will tolerate bad behavior, people will learn they can get away with it. That doesn’t mean you have to be mean about it, but create a culture of “open and honest” feedback, and make sure it goes both ways.
2. Change starts at the top. Often, the leader will not be open to change, and it can be in their body language or becoming defensive when someone disagrees with them, etc. You can’t expect your people to change if you’re not willing to change first.
3. The leader needs to recognizes that they are ‘a voice’ around the table, not ‘the voice.’ This is a huge challenge, as leaders often see themselves as the only person capable and authorized to make decisions. While it’s true that they need to make the decisions, they also need to listen honestly and without showing impatience for other people’s opinions. Some call it the obligation to dissent, but whatever you call it, make sure people feel validated for their opinions, and when you make a decision, take those opinions into account.
Culture is one of those intangibles that is very hard to define but needs to be designed and implemented — and never by default.
Credit: forbes.com
