Are you building a culture by design, or one by default? Over the past eight years, our leadership team has worked hard to design, implement and scale a culture that creates sustainable advantage. Here are three things we do to to give ourselves the best possible chance of success:
1. Create a Culture Blueprint.
Exceptional workplace culture doesn't happen by accident. It starts with a clearly defined vision that includes the company's core values, a detailed description of what each of those values means on a day-to-day basis, and a system for measuring whether or not the people in the organization are living those values.
I refer to this plan as a culture blueprint, and it's critical to the creation and scaling of your company's culture, just as an architect's plans are to the building of a skyscraper. Done correctly, it serves as a North Star to the senior management team as you hire and manage the company's workforce. Without it, you'll end up building something that's likely to collapse under its own weight.
To build your company's Culture Blueprint, answer the following questions:
- What are our company's core values?
- Can you articulate at least one real-life example for each core value?
- How will we ensure we're hiring and promoting people who meet these core values?
- What's our company's compensation philosophy? How do we pay and reward people, and why do we do it what way?
- Does everyone in the company have at least one number or KPI against which they're measured?
- What do we do when we know someone isn't a fit for the job they're in?
2. Run HR like a sales organization.
Traditional notions of HR as an administrative function are antiquated and don't meet the needs of a high-growth company. If you're not running your recruiting operation like a sales and marketing machine, you're losing access to the best candidates on the market.
Do you want to hire the best, or be relegated to hiring the people your competitors decided weren't their top choice? A sobering question, right?
Your jobs are products that need to be marketed just like any product. Your labor pool is your target market. Do you understand what product your market wants to buy? Are you selling a below-market wage and 50-hour work weeks into a market that's looking for jobs with higher base pay and 40-hour weeks? You don't have a recruiting problem, you have a sales and marketing problem.
For your current team members - existing customers - are you delivering an exceptional customer experience, or a merely mediocre one? Are you tracking and measuring engagement, checking customer sentiment and constantly seeking input from your top customers? Have you build the internal equivalent of a Customer Advisory Board to make sure you can tap into customer sentiment whenever required? Are you keeping your best customers?
When you re-imagine your HR team as a sales organization, it forces you to rethink everything you're doing. The best workplace cultures are born and raised from this mindset.
3. Govern by meritocracy.
Dan Price, the founder and CEO of Gravity Payments, is famous for his "$70,00 Minimum Wage" policy, where everyone in the company makes a minimum of $70,000 a year. I applaud the concept and the noble intentions, but it's a terrible strategy if he's trying to build a high-performance culture.
The top-performers in any given job function have limitless employment options in just about any labor market. With rate exception, these individuals work for company's that compensate them accordingly--as top-performers. When you flatten the pay curve--or, in the extreme example of Dan Price, completely level it--you end up under-paying your biggest contributors and over-paying your under-performers.
In this "flattened wage scale" environment, you're communicating to top-performers that their work is worth approximately the same as someone who's delivering less value. Your noble intentions result in the retention of lower-impact team members, and the loss of your highest-impact players to competitors who will pay them commensurate for the value they deliver.
If you're building your company for outsize growth, you simply must create a meritocracy where an outsized portion of the compensation pool is awarded to those individuals who deliver the majority of the value. When people want to make more money, instead of lamenting about the pay scale they should have a structure by which an increase in their performance leads to an increase in their take-home pay, be it through commissions, bonuses or merit raises.
Paying everyone a flat wage scale is akin to a teacher who decides that everyone in their class deserves to be a B-student, and makes it so by taking away from the A-students and giving to the C-students. It's a recipe for long-term mediocrity.
Armed with a blueprint for success, an HR organization built like a sales machine and a system for rewarding your top-performers, you can build an exception company culture that creates a truly sustainable competitive advantage.