Building culture in an organization.

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What is the most important thing in a company? What is the hardest thing to build in an organization? Culture.

Why is it so hard? Because unlike cash flow statements or product metrics that are measured, defined and monitored by numbers, culture is measured by people. When there’s a lot of people, it gets messy.

It’s easy to not care about it and hope the task of building culture is blurred by dangling high compensation salary and benefits to new joinees. What a lot of CEO’s don’t get or they get and don’t actively spend time on is people don’t join just for the money. There are a lot that do and once your work is done with them you should part ways but for those that you want to be troopers to the end and the true pillars of your movement, you need to spend time on grooming the culture and attracting them.

A famous talk about what makes great companies great by Simon Sinek illustrates this point. People don’t buy what you do or how you do it, they buy the why you do it. I recommend that you put aside 18 minutes to view the talk. It is quite profound.

What you do is make great products. How you do it is by hiring great people. Why do you do it is where the culture is embedded. Why should people join you? Why should people notice you ? Why should people stay at your company? All of this is answered by that one word, Culture.

Culture eats strategy for breakfast – Peter Drucker

A lot of Indian organizations struggle with culture. The Indian media talks a ton about achievements, role models (and some terrible ones) and profits. Very few talk about culture. Because building culture is a long hard road and the results are seen many years later. In a world of listicles and quick wins, culture doesn’t stand out as sexy.

I have worked with many startups in India and almost all of them struggle with building great culture. Given the unnecessary media attention on quarter results, it is easy to believe the let’s just work far more, keep hustling and results will speak for themselves. There are 2 problems with this. The people that get burnt away and aren’t cared for are sometimes your best people and focusing on results alone is akin to placing all your eggs in one basket. You focus on the eggs laid, not the hen itself.

I listened to this talk by Laszlo Bock, head of VP operations at Google. I recommend the listen. He talks about how Google, widely considered one of the best organizations in terms of culture, goes about this whole process.

Here are my notes

  • Google drew inspiration from Bell Labs, the US military and others on how they spent time thinking about how people interacted and how spaces were built. There is a direct line in how Google runs at it’s cafes so that people can bump into each other and strangers become friends. This is the idea of engineering moments of serendipity.
  • How do you take someone on paper that has a high school education and then turn them into raw leaders? Take raw material and turn them as exceptional?
  • People are fundamentally good and they’ll do better stuff if they feel like it’s theirs
    • Everyone gets stock irrespective of where you join in the world
    • Being transparent in the company and why. Weekly meet up with the founders and CEO. Tremendous
    • Everyone’s goals are visible to everyone. If it’s your thing you should know how it’s being affected
    • Give a lot of channels to give their voice. Where you sit on the hierarchy doesn’t matter since it’s all our thing
  • Managers are usually made redundant and everyone is given the freedom away from titles
    • The upside is that you do better work and don’t feel pressurized into being afraid of making mistakes. They are looking for guidance not control and this makes people stay longer and enjoy it more
    • The downside is that if you want to make a big change, it can take a while. It can be really slow
  • Google follows a power law distribution on bonuses, stocks and salaries where there is a wide variation on the pay
    • Usually people think that the 80/20 rule works where 80 percent of the revenue is generated by 20 percent of the people. That is human performance is “normally” distributed
    • In a lot of fields, very best people contribute way way more than that. They generate far more value. The very best people 95/98% type of value. So it means that you are underpaying the best people if you pay them equal to those that aren’t performing
    • This means you need a system that is just and fair and this system rewards the top performers so that they don’t leave
  • Google spends an enormous amount of time in finding the best people
    • The biggest constraint when you are growing rapidly is how can you find great people fast? Google started off with the brute force method where you hire many recruiters and look at the smartest schools and just pick them up in droves
      • But this didn’t turn out to be too productive, the interviews weren’t that great, the hiring wasn’t fast enough and the people weren’t great
    • So they dived into data and started looking at numbers.
      • How many interviews do you need before you can decide the candidate is a fit?
      • Undergraduate experience and test scores doesn’t matter that much
      • They followed their gut and the gut can usually be wrong
    • Rather than doing brain teasers and stuff they looked at for pure IQ so instead looked at people they liked at Google and were the top performers and started quantifying requirements of great people
    • They found 4 basic attributes in the end
      • General cognitive ability – smarts, learning ability and general problem solving ability (not just your SAT scores)
      • Emergent leadership – not where you were promoted or were captain. If you see a problem do you step in and help and do you relinquish power
      • Googly-ness – conscientiousness will people think like owners when they are here, and intellectual humility which is the type that if you get new facts will you revise your opinion based on the facts?
      • Can you do the job? Because if you have the other 3 covered this usually takes care of it
    • Women tend to be more self aware and exhibit higher EQ than most men do.
    • A great question asked was Michaelangelo never wanted to paint but was pushed into it, Martin Luther King didnt want to be the leader of the civil rights movement? How do you find talent that isn’t looking to be found?
      • This touches on the topic of emergent leadership. People who want to step up and improve the surroundings.
      • Project Aristotle was inspired by an article talking about Shane Battier written by Michael Lewis where it observed that Shane wasn’t an all star candidate on the field but whenever he was around everyone just played better.
        • The project was what makes teams better? And where does innovation come from? The underlying one is pyschological safety where members of the teams that have the safety tend to step up and innovate more

What companies have you found to exhibit great culture?

 

 



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