jessie reiss of the gorgon lab

I want to share something I read last week. It was written by a young software engineer who works in a startup in San Francisco.

The post resonated with me because Jesse said exactly what I’ve been saying for years and that meant a lot; not because he agreed with me, but because he is an aMillennial who recognizes the importance of culture and how to create and retain it.

You’ve heard it before, not just from me, but from coaches, academics, even investors. Now hear it from someone who typifies the kind of employee every boss wants to hire.

on startup culture

The startup culture has become a thing of legend. Decades ago, startups began filling their offices with scooters, zip-lines, and ping-pong tables. Today, perks like free massages, catered lunches and “beer fridges” are common place, even expected. 1pm – 4am has become an acceptable workday. Men wearing kilts or employees with crazy piercings or neon colored hair are frequently seen in the halls of technology companies of all sizes. Even larger companies like Google, Netflix, Apple, and Zappos are renowned for their unique “startup culture”.

I’ve now worked for three different startups in as many years. I have also interviewed, have friends who work at, or met with leaders of many other startups. As such, I’ve gotten a pretty good sense for a variety of very different startup cultures. My company, Spot, with only five employees, is a tiny team. As we discuss scaling, however, I’ve started to spend a lot of time thinking about the kinds of things that differentiate a startup’s culture, how to cultivate the good and how to avoid the bad.

A startup’s culture is, to me, as important as anything a startup strives to create. Startups must be nimble and innovative in order to be successful. They have no hope of outspending or outlasting an established company and so they must outpace and outthink their larger competitors. In essence, the startups primary advantage is their culture, an environment where creative, passionate, hard working employees can thrive.

In the earliest stages, this is relatively easy. The first employees are friends of the founder or hand picked candidates. In the beginning, the founder can make it a priority to focus on culture. As the team scales, however, and the demands on the founder increase, he or she becomes further removed from the process of building and maintaining culture. At this point, the startup must be like a crystal, so imbued with the culture that as it grows it maintains the same core structures and values. The culture must become, as our advisor James Currier once explained to me, “part of the company’s DNA”.

So, what culture should a startup strive to create? What structure best establishes the culture “into the DNA”?

I believe there are four high level ideals a startup should strive for. Some of what follows might be obvious, other parts unfounded. These are my beliefs based on my anecdotal experiences, so pull out your salt.

1. A Rigorous Hiring Process

Your team is your culture, and for most startups, your team is your product, so this is by far the most important point. I firmly believe that a good employee is worth at least 15 decent employees and an infinite number of bad employees. Don’t throw bodies at a problem, get your best and brightest to work on it. Consider a three month trial period for new employees. It might be scary for some applicants, but committing to a job is a lot like a marriage: shouldn’t you try living together first? Develop a rigorous interview process and cultivate interviewing skills in your employees. When hiring, look for potential and eagerness over experience. Invest in getting your team together outside the office. Bonding experiences are invaluable. Try to build a team of people who genuinely like each other. It’s not easy, but when it works, it’s an amazing thing to be a part of.

2. Transparency

In my experience, transparency is empowering, while opacity is frustrating, confusing, and frightening. Share your information. Share your problems and you might be surprised where the best solutions come from. Share your successes to improve morale, but share your failures to make sure you learn from them. Don’t be afraid to share bad news. When you’re in charge of sharing information, you control the tone it’s shared in. If you try to bottle it up, it will leak without the proper context. Employees are apt to return the favor, sharing information up the chain if they feel it’s reciprocated. Information leaking outside the company is a serious threat, but if you can’t trust your employees, you have a bigger problem.

3. Employee Ownership

It is standard practice in startups to share equity with your employees, but there is more to ownership than just stock options. There is pride in ownership, a drive to show off, to accomplish something real. The closer your employees are to their work, the more of themselves they can see in it and the harder they will work to accomplish their goals. Listen to your employees ideas, if they’re good, put them in charge of implementing them. If they’re not good, try to convince them. Give employees high level goals and let them determine the details, they’ll be more apt to put all their heart and soul into working on their own solution. Don’t be stingy with equity. You can’t do it alone and you’re already sharing the risk. Share the reward too.

4. Flexibility

One of the benefits of working for a startup is the flexibility to work when and how you want. Startup work is mentally and physically demanding and it is easy to burn out. If you force your employees to work on your terms, you risk getting substandard work from exhausted and discouraged employees. Trust your employees to get their work done on their own terms. Also, be flexible about how your employees solve their problems and what problems your employees are solving. There are always higher level goals a company needs to accomplish, but a good employee left to play may well stumble upon something amazing. Twitter and Gmail are likely the two most famous examples but it happens all the time in varying degrees.

Speaking of Twitter, I recently had the opportunity to speak with Jack Dorsey about the culture he is trying to create at Square. He described managing a startup as an editorial role (fitting since they share offices with the San Francisco Chronicle). Much like a reporter, individual contributors should be able to pitch ideas for projects, and managers, like editors, should direct their contributors with high level suggestions. I think this is a perfect model to try to emulate. Rather than worrying about the details of the business, managers should work to maintain a consistent tone and vision in their product. Contributors should be given the flexibility to set their goals and should be given access to all the tools available to successfully accomplish their goals. In the end, it is the contributors who are on the ground, who experience the battle day to day, and who write the stories that define your product.

Building and maintaining a culture is an ongoing process. A startup is an evolving, ever changing entity and your culture will be too. Don’t expect your culture to evolve overnight or to arise from a single change. If you consider the culture, however, as you make decisions, and if you strive to create a great team with transparency, flexibility, and ownership I think you will quickly begin to reap the rewards. It’s not easy work, but nothing in a startup is, and your culture is well worth the challenge.

Image credit: the gorgon lab

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Last fall I wrote that the prevalence of bullying, especially in the workplace, was giving rise to an anti bullying industry and I’ve seen nothing to change my mind about that.

I recently learned that my post was taken by at lease one person to mean that I didn’t believe workplace bullying was real and I want to state categorically that it is very real and way too prevalent.

I’ve seen abusive managers and cultures in action up close all my working life, especially since I returned to headhunting in the late Seventies.

Whether you call it abuse or bullying, it’s out of the closet and getting more and more media attention, which is good.

I learned about the misinterpretation last week when I received a call from a senior manager I’ll call “Lisa.”

Lisa was looking for expert witnesses because an employee has gone to HR with claims that he is being bullied.

I immediately told her that I don’t believe I would qualify as an expert, but offered to listen to the story. (I was very curious.)

Long story short, Lisa explained that her job was very difficult because the department she had recently taken over had a number of very stupid people who insisted on doing things differently from the way she knew they should be done.

She had found the only way to make them listen was to scream and constantly point out what they were doing wrong.

However, one of them was so wimpy he had filed a complaint with HR and the investigation was impeding her work, hence her desire to find experts on her side.

I asked what made her think I would side with her and she mentioned the article.

I then explained in words of on syllable that she had completely misunderstood what I wrote, that her she was bullying her people and that actions such as screaming and public belittling were not only abusive, but created a toxic culture for everybody.

As you might guess, her reaction to what I said was less than positive.

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John Greathouse is a VC at Rincon Venture Partners and he offers up some great advice about celebrating successes, both large and small.

I pretty much agree with all his ideas.

What I don’t agree with is that they are primarily for use in what he calls AdVentures (internet startups) and not in Big Dumb Companies (BDCs), which, he says, use newsletters.

While BDCs may indeed use newsletters, although due to expense I’m pretty sure they are mostly digital now, you don’t have to be a net startup to implement tweaked versions of Greathouse’s ideas in your organization—you just need people.

First, let’s restate the acronym and make it SSMLDC for Startup, Small, Medium, Large Dumb Company (yes, there are startup DCs), the key word is dumb, so we’ll call them DCs for short.

Some DCs don’t value their people (which make them happy hunting grounds for recruiters), while others just don’t show it.

But the real problem is one of individual managers, since they have the option of appreciating and caring whether those above them do or not.

No one says you have to manage like your boss or her boss or the company’s big boss.

I have seen many managers who are anything from a few degrees to 180 off from their company’s stated and/or de facto approach.

The good ones leave DCs for good companies and the bad ones leave for DCs.

If your goal is to be a great manager in any environment take the ideas that Greatehouse describes and tweak them to fit your group—whether you’re a VP or a team leader

After all, just because you work for a dumb jerk (DJ) doesn’t mean you have to be one.

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Today is my birthday and I’m not working (I wrote this on Sunday).

From the time I was old enough to understand that my birthday was the day of MY birth, my special holiday, I refused to go to school on April 26.

No matter where I worked I’ve always taken my birthday off.

I never lied about it and even mentioned it during my interviews. I said I was happy to work weekends, Christmas, other holidays, but not on my birthday.

Surprisingly, they all agreed.

So it’s not surprising that when I started RampUp Solutions part of the culture was no one worked on their birthday; nor did they have to ‘make up’ the time off.

Over the years many executives have explained to me why giving people their birthdays off was a bad idea; here are their arguments and why they are wrong.

• Too expensive – not when viewed as a recruiting, productivity and retention tool. It was surprising how many people viewed having their birthday off as a deal-breaker when interviewing.
• Disrupts work flow – 95% of work can be scheduled to avoid a birthday and employees are the first to recognize the other 5%.
• Other employees would be jealous – these execs and mangers just didn’t get it. They saw this as a perk for “stars” or “professional staff,” as opposed to everybody, totally missing the point.

Think about it, it’s one of those little things with enormous ROI.

And while you’re thinking, please have a piece of cake and drink a birthday toast to me.

Happy Birthday to ME

(No, there are not enough candles, in case you are wondering:)

Fickr image credits: http://www.flickr.com/photos/zedbee/103147140/ and http://www.flickr.com/photos/moonlightbulb/4871952762/

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Are you already a devotee of insanely smart hiring, in the process of changing after reading insanely stupid hiring or somewhere in-between?

Wherever your MAP is on the subject there is one thing about hiring that you need to wrap your head around if you want your career to flourish.

You can not hire stars, but you can create and maintain them.

This is as true of executives and management as it is of workers at all levels.

Think of hiring in terms of planting a garden—only these plants have feet.

You’re at the nursery and find a magnificent rose. It’s large, because it’s several years old, has dozens of blooms and buds and is exactly what you wanted for a particular space in your yard.

The directions say that the rose needs full sun to thrive, while the space in your yard only gets four to five hours of morning sun. But the rose is so gorgeous you can’t resist, convincing yourself that those hours from sunrise to 11 will be enough, so you take it home and plant it.

It seems to do OK at first, but as time goes by it gets more straggly and has fewer and fewer blooms.

Finally, you give it to your friend who plants it in a place that gets sun from early morning to sunset.

By the end of the next summer the rose is enormous, covered in blooms and has sprouted three new canes.

One of the things that insanely smart hiring does is ensure that people are planted where they will flourish, whether they are already thriving or are leaving an inhospitable environment.

I said earlier that people are like plants with feet. Abuse a plant, whether intentionally or through neglect, and it will wither and eventually die; abuse your people and sooner or later they will walk.

Insanely smart hiring also gives you a giant edge whether the people market is hot or cold.

By knowing exactly what you need, your culture, management style and the environment you have to offer you are in a position to find hidden and unpolished jewels, as well as those that have lost their luster by being in the wrong place. (Pardon the mixed metaphors. Ed)

These are often candidates that other managers pass on, but who will become your stars—stars with no interest in seeking out something else.

They recognize insanely smart opportunities when they see them.

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Yesterday we looked at insanely stupid hiring and I said we would explore the alternatives today.

Every time a manager tells me that staffing gets in the way of their “real work” it makes me crazy. For decades I’ve heard this same stupid statement from various managers, from CEO to team leaders, and none of them was stupid.

Insanely smart (or stupid) hiring starts with individual MAP (mindset, attitude, philosophy™).

Here is the basic attitude of insanely smart managers, voiced decades ago by Terry Dial, who eventually became vice chairman of Business Banking at Wells Fargo.

“People are 90% of our costs as well as the key to customer service and satisfaction. The only thing that should take priority over hiring a new employee is keeping a current one.”

Overview of insanely smart hiring

1. Hire people to be part of the team. In other words, people who share your values, will support your culture, are fascinated with your product and believe in your company.
2. Take time to define what you really need. In other words, the right person for the right job at the right time and for the right reasons.
3. What you see may not be what you get. In other words, commit the time needed to interview thoroughly.
4. Performance isn’t always portable. In other words, be sure you can supply the management and environment in which the candidate can flourish.

How to practice insanely smart hiring

• Insanely smart mangers know that no matter what else they have to do it is people, acquiring them, motivating them and retaining them, that is their “real work.”
• Insanely smart managers never lose sight of this basic law of managing—there is nothing a manager can do personally (to save their review) that will off-set the effect of their under or non-performing group.
• It is easier to be an insanely smart manager if you work for an insanely smart company, or at least manager, that understands there is no hiring gene and good staffing skills are learned, not born—but don’t count on it.
• Insanely smart hiring is real work that requires time, energy and commitment.
• Insanely smart mangers focus on ending up being the dumbest person in the group.
• Insanely smart managers never hire jerks, no matter how much pressure they are under.

Join me Monday when we consider how insanely smart hiring creates stars and boosts retention.

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In an NYT interview Michael Lebowitz, founder and C.E.O. of design firm Big Spaceship, passes on some excellent information on hiring, building a team and culture.

Here are two of the points with the greatest impact,

One of my longest-standing clients, a very smart guy, says: “There’s two ways to manage. You can hire to be the smartest person in the room or you can hire to be the dumbest person in the room.”

He says he works at being the dumbest.

And

“Don’t hire jerks, no matter how talented.”

Lebowitz says that there is no place for rock stars and I agree totally, unless you are naïve enough to believe they can function alone, without the cooperation, support and backing of the team.

Hiring rock stars means turnover—not productivity.

I’ve seen many team members leave because their manager’s focus was so completely on taking care of his few stars that he had nothing left over for the rest.

One of the finest managers I know has had a team packed with stars everywhere he’s worked. Partly because his reputation is well known and talent flocks to work for him, but mainly because he passionately believes that most people have the ability to become stars, some brighter than others, and he manages them accordingly.

True, he works harder at managing than many and has been kidded by his peers about the lengths to which he goes, but he tells me he wouldn’t have it any other way.

I once asked him how he got to be that way and he said that he’d never done anything that he didn’t want from his own manager, so it wasn’t a big deal.

I couldn’t resist asking if he was managed the way he did manage.

His response was a smile and laugh and that just because he didn’t get it didn’t mean that he didn’t want it.

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Last week Craig, a senior manager I know, referred one of his direct reports to me.

During the annual review Craig had warned “Jim” his department’s turnover was unacceptably high and that he was tying 15% of Jim’s annual bonus to his hitting the retention numbers they discussed and agreed upon during the meeting.

Jim asked Craig if the company would be willing to pay for a coach, because he was unsure exactly how to improve retention and hadn’t found books on the subject of much use.

Craig said the company wouldn’t, but he knew someone affordable and called me.

I agreed to have an exploratory conversation to be sure that we could work together and that I could help.

When I talked with Jim he said he believed that in order to do what Craig wants he needed to “get rid of more dead wood and bring on people who will jump on his ideas, aren’t afraid of hard work and understand loyalty.”

However, doing so would preclude any chance of his meeting the retention numbers, especially since, based on past experience, he would be forced to turn several of the new hires, too.

After hearing a good deal more about what he had tried that didn’t work, I explained how I work, costs, etc.,

I warned him that I’m pretty blunt and suggested he check out this blog for a window on how I think and my approaches and that we both think about it to decide whether we could create a productive relationship that would achieve what he wanted.

Jim called yesterday and the upshot is we will be working together to solve his retention problems and I have his permission to share parts of that with you over the next few months.

It should be interesting.

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Carol Bartz was hailed as a savior both inside and out when she took the reins as CEO at Yahoo.

But that was then and this is now.

Martin Berko, who writes a pithy syndicated financial advice column, describes her this way,

Big Mamma is a brutish CEO who is not liked by Wall Street. She has no experience in running an Internet information provider or generating advertising revenues and is about as subtle as a train wreck. She’s confrontational with analysts, the media and key employees.

Make that most (all?) employees.

December 14 Yahoo announced a 4% layoff and started sending pink slips to 600 people.

Yahoo management chose to do this the week before Christmas.

I say ‘chose’ because when I called the half dozen Yahoo managers I know and asked when the layoff was decided they all said they had known in October.

The folks I talked with aren’t executives, but mid-level line managers.

Granted, there is no good time or easy way to lay people off, but there are better and worse ways to handle it if one becomes necessary and ten days before Christmas doesn’t qualify.

Layoffs, like deaths, are a shock even if you know it’s coming, not to mention the intrinsic “but me” factor.

If the layoffs had been done in October people would have had some time to get over the shock, prepare and batten down the spending hatches before the holiday season started.

Then there is the long-term damage to Yahoo.

Yahoo says it is still hiring in other areas, but it’s desirability as a place to work just sank even lower.

Even if Berko is correct and Yahoo is acquired and/or Bartz is replaced the memory of “the week before Christmas layoff” will remain.

Sure, people will accept offers because of the economy, but they are unlikely so see the company as a long-term career path.

The term “taxi job” refers to stopgap employment while looking for a permanent opportunity.

The timing of this layoff will certainly raise Yahoo’s positioning in the taxi lineup.

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Too many managers (of all ages and at all levels) tell me they are using texting, Twitter and email to manage their people. They’re even using them for performance reviews, layoffs and terminations.

When I ask why they use them I’m told some variation of ‘saves time’, ‘more immediate’, ‘modern way to manage’, ‘cool’ or the worst one, ‘lets me focus on what’s important.’

I may be a digital dinosaur, but I’m here to tell them (and you if you are on the receiving end) that that isn’t managing; it’s avoidance pure and simple.

It’s having the title while avoiding every single action required to lead a high-performing organization. It trashes careers and shows enormous disrespect for people.

In short, it’s a total copout; unfair to the team, the company and the investors.

What’s important are the people, because without the people there is no company and if there is no company you have no job.

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