Company culture. It’s hard to quantify, but it might be the single most important factor in determining your company’s success. “If you don’t get the right people, your business is going to suffer,” said Josh Patrick, founder and principal at Stage 2 Planning Partners, where he advises business owners on how to create value.
That’s why entrepreneurs like Santiago Merea, the founder of The Orange Chef Co., which sells Prep Pad, a high tech kitchen scale on eBay, put so much effort into hiring. “You have to surround yourself with smart people…people who are great and aspire to do more,” says Merea.
Sam Altman, president of Y Combinator, a Silicon Valley accelerator program, says the first 10 employees can make or break a company. “If you don't get that right, the company basically never recovers,” he warns in his online How To Start A Startup class.
So how exactly do you find great people that will create a positive work environment? There is no easy answer. Creating a positive company culture requires hard work, introspection and follow-through. And this is one area where entrepreneurs cannot delegate.
“Culture always starts with the owner,” said Patrick. “You have to look in the mirror and be honest with yourself.”
Business owners must ask themselves what kind of company they want to build, and what values are important to them. They also must make a clear-eyed assessment of what it takes to fit into their workplace. Patrick suggests making a list of four or five essential traits, and using them as a guide when hiring. “Screen for technical skills and interview for fit,” he advises.
Susan Heathfield, a management consultant, business owner and human resources expert, agrees, saying cultural fit trumps technical qualifications — especially in a small company.
“It’s a small room, there are only a few bodies in it,” she said. “If you want to go to work and love your job every single day, they’d better be people you like and get along with well.”
Business owners should look for people who share their values and will click with coworkers, she says. To determine cultural fit, she suggests asking behavioral interview questions that elicit candid, rather than canned, responses.
For example, consider questions like the following:
Tell me about a time that you worked for a boss that you really liked. What about working for him was so special?
What are the positive aspects of your current job and work environment, or the last position you held before coming to this interview?
“You’ll find that the person’s response is going to tell you exactly who they’re comfortable reporting to,” said Heathfield.
Getting along with the boss is important, of course, but candidates must also get along with coworkers. Heathfield suggests that in small companies, every employee spend some time with the candidate. “They’re the people they’re going to have to work with every single day, and they’re either going to click or they’re not,” she said.
And what if you make a hiring mistake? Business owners should act swiftly — and take responsibility, Patrick said. “Tell the employee that you’ve made a hiring mistake, offer appropriate severance, and move on."
Walking the Talk
Culture-building doesn’t stop once your team is hired. It’s an ongoing and evolutionary process. In fact, culture becomes even more important as you grow and lose the intimacy of a small startup.
Successful retailers like The Orange Chef Co. and Warby Parker rely on a deeply ingrained culture to keep their organizations focused even amid fast-paced growth and change.
At jewelry designer and eBay seller Alex and Ani, the emphasis is on building what founder Carolyn Rafaelian calls “a mindful culture.” To further that goal, the company, an eBay seller, offers workshops and courses designed to spark human development among its employees.
Zappos, for example, has 10 core values, ranging from “Deliver WOW Through Service” (#1), to “Embrace and Drive Change (#2) to “Be Humble” (# 10). In a document expanding upon these values, the company says: “Ideally, we want all 10 core values to be reflected in everything we do, including how we interact with each other, how we interact with our customers, and how we interact with our vendors and business partners.”
Warby Parker, meanwhile, creates a brand persona, telling employees to write like Warby Parker is “the person you’d want to be next to you at a dinner party" when communicating with customers.
In the end, a company’s culture flows from the top, and it’s the responsibility of top management to nurture it. Says Heathfield: “The leadership — and that is often the business owner — has to tell people what kind of culture they want, and tell them every day. Whether it’s how he or she behaves in meetings or what they conveys verbally, it’s critically important that the owner walks the talk.”
Above all, said Patrick, “Be consistent.” At high-performing companies, he said, you’ll find that “there’s a lot of people that buy into whatever the senior management is selling. They are very clear about what they want.”