I – like most entrepreneurs – was not handed a recipe for a great and lasting culture when I co-founded Bonobos. However, I have been lucky to piece together the wisdom of many who have come before me. So, I came up with my own framework by distilling personal cultural successes and failures while building Bonobos into the brand it is today.
Let's dive in.
Is culture revealed or created?
When you need something, you make it. When you want to sell a product, you create it. When you need a head of marketing, you hire one. But, if you want to create a great company culture, what do you do? I believe most companies fail in creating a great culture because there is neither a formula nor an all-encompassing set of standards.
Unfortunately, without a standardized process, many companies say culture matters, but few understand how to bring an ideal culture to life. The great companies are those that commit sufficient time and resources to building and sustaining culture as a core part of the brand at an early stage.
The most important people to the culture are those who leave
In many cases, the people you fire are more important to your culture than those you hire. It’s a half-truth (because you have to hire outstanding people), but it’s an important half-truth because the best way to protect the company's environment is to recognize where you have 'erred' and course-correct. Culture is a by-product of those who stay and those who go – an “experiment” in defining your culture by learning who fits and who does not. This process requires courage and confrontation, and is paramount in making the company “safe” for your best people, who should – by the way – be the only people you want working for your company.
You will find that firing people isn't so scary if you yourself develop a habit of treating people respectfully during transition. This means being direct, offering generous severance and proactively helping them search for another opportunity. This is important because, as Jeff Weiner observed, it is rare that someone will personally remove themselves from the game.
You may even come to view firing somebody as your own atonement for getting the hiring decision wrong. Or, maybe the hire was appropriate three years ago, but no longer provides value as your company grows and evolves. You cannot keep someone out of loyalty; your loyalty is to the company's mission, not to any particular person pursuing that mission. It doesn’t matter how vital a person has been historically, but rather how important they are moving forward that counts. Your company is a sports team, not a family.
A company that cannot fire people – when necessary – is like a forest without a fire: it becomes overgrown, full of weeds and eventually dies. Often, a company that fails to fire people for legacy reasons is simply a company that will never have a great culture. Without an adaptive mindset, the company will become stagnant and employees will become less valuable.
Don’t hire people based on their experience
It is tempting to hire someone who has 'done it' before. You don’t want that person. You want someone who is about to do it. After all, if they’ve done it before, why would they do it again? They're either not ambitious, not growth-oriented or weren’t very good in their previous role.
This is not to say experience is not critical as experience improves judgment, endurance and growth. But, experience is typically the main hiring criteria, which is a problem. It is the obvious hiring criteria, and therefore by definition will get attention. It’s like reminding an adult to chew their food.
My belief is there are two main variables that must be extracted and valued: "fit" and passion.
Fit with the core virtues
During a scary moment of meaningful turnover during Bonobos’ early days, we articulated what we viewed to be the five core human values and traits across the best (and worst) people we had ever hired. I created the list by categorizing the 30 people we had hired up to that point:
- The 10 best
- The next 10
- The 10 who hadn’t worked out
I asked myself what separated the top 10 from the bottom 10 in terms of their humanity. I wrote down five traits that embodied each, and then rated individuals accordingly.
These traits became what we at Bonobos call "core virtues": self-awareness, positive energy, empathy, intellectual honesty and judgment. These are the centerpiece of what we look for in who we hire, promote and fire. For a few years we even rated folks on a scale of 1-to-5 as a way to assess their cultural fit. On the low-end, a "1" in positive energy is “a fun sponge: takes energy from the room when they walk-in.” A "5" in self-awareness is “a Jedi: admirably non-defensive in talking about why they suck.”
How can a leader get empirical about something as soft as culture? My belief is that the more subjective something is, the more it demands a framework – however imperfect – to make it something that your team can then discuss. Similar to Rotten Tomatoes and Zagat.
Passion for the mission
Culture largely results from a shared belief in a company's mission. You and your leadership team must clearly understand your own in order to accurately gauge the candidate's belief in your business. Most founders cannot articulate this (I was one of them), but when we finally were able to, it enabled us to hire the right technology leader for the first time in six years. We’re now building the best software engineering team in the history of branded apparel retail because we finally did the hard work of finding a technology leader who loves technology and who loves clothes.
The best way to test for one's passion of the mission is by watching who values title and cash over equity. People who really love your company will want more stock than salary, and they won’t care a whole lot about title.
A wise man once told me: "Watch intently what people negotiate for, for it reveals more about their intentions than their words." Someone I know calls it the “start-up hiring intelligence test”: you make two offers, $Y cash and X stock options, or 0.8$Y and 2X stock options. If they take the first offer, you pull it.
Spend enough time recruiting someone, and eventually the dynamics of the hiring process will foretell what it will be like to work with them. Be particularly careful of people whose actions and words are not congruent throughout the process. For example, be cautious of a person that wants to join your company because they are eager to work with a start-up, but are also interviewing at larger enterprises. Why? I have learned to watch and listen to what people do, rather than what they say.
At the end of the process, I try to talk someone out of joining the company. A leader must be certain that its their real passion over our salesmanship that convinces them of the opportunity. I tell them all the reasons not to join, and all the harsh realities of the marriage that awaits as soon as the romance ends.
For all my talk of culture, Bonobos Inc. is still a challenging place to work, like many other companies. If I can’t talk a candidate out of the job, then they’re in. If they don’t join, I don’t sweat it. If they had fire in their soul for what we are doing, and if this had been the right opportunity for them, then they would have come.
In part two of Andy's article, we'll explore culture in the context in which people operate, which is influenced by myriad things: goals, feedback, promotions, compensation, physical space, how people organize outside of work, social norms and more.
More from the executive spotlight series:
Hootsuite CEO: 5 Tips on When, Why and How Much to Raise – Ryan Holmes, CEO, Hootsuite
URX on Re-Aggregating the Web – John Milinovich, CEO, URX
From rags to riches: What one CEO learned from his biggest mistake – Ryan Smith, CEO, Qualtrics