New Trend: Cashing in On Company Culture

In every board room I have ever been in; revenue, competitor movements and key user metrics were the core focus of discussions.

Not once have I heard an executive talk explicitly about culture.

Time are changing.

Today Craig Rosenburg from TOPO published an article examining how culture is rapidly rising to be a key determinant of success for tech companies.  I took the most interest in the below graphic which shows a leaked list of Salesforce Potential Acquisition Targets – inclusive of a metric which I haven’t commonly seen in M&A analysis – “Glassdoor Likelihood to Recommend.”

Culture is no longer just important; it is now of strategic importance.

Additionally, this data is not listed on the stock exchange or provided by a 3rd party research firm; but aggregated publicly from the opinions of their employees via the Glassdoor Review site.

In this day and age – job seekers are going online and conducting research throughout the hiring process just like we utilize the internet to look up prices or explore product reviews before buying something online or even in-store. Similarly – those who leave or work at companies feel a sense of social responsibility to share their experience for those considering a change.

In the past – opinion surrounding a company was limited to word of mouth and the press. Nowadays, if public opinion online of a firm is negative it’s not just a PR or recruitment issue – the above evidence shows that the effects can run to a place that hurts the most – the company share price.

Across the companies I have consulted to in recent times – I now have first hand experience with HR leaders and CEOs “gaming Glassdoor” by actively incentivizeing/inviting employees to give favorable reviews. Why you ask? Because as I have established; this is now so critical that personal & executive KPIs are often tied to metrics around public opinion.

If we discount the firms which game the system and accept the condition that employers can’t control what their employees say on sites like this anonymously; how do companies create a culture that is going to foster positive sentiment?

I have heard several answers to this question. The most common is that candidates should all adhere to a corporate value set – which more often than not is so broad that it is irrelevant. I have also heard that rigorous psychological testing is important… which starts to scare me as I doubt I’d pass.....

I believe there are three key tenants.

The first question – “Is my culture internally or externally driven?”

By this – I refer to the fact that if an organization is having to work hard to create its own culture by mandating actions and behaviors then there is something inherently missing.

Instead the organization should be working to enable the culture which extends from the beliefs, views & desires of the employees within it. This could include providing budgets for teams to spend as they see fit on activities, to take votes on improvements to the office space e.t.c.

The second question – “Is there enough diversity within our organization?”

In this statement – I’m not referring to specific quotas in relation to race, age, gender or creed – but more in relation to a variety of character.

As a sales leader a few years ago – I made the mistake of hiring people too similar to myself. Although results were good, I really struggled to create a team dynamic when everyone was a competitive as I was; numbers were high but morale was always low. Instead of a value set – I now try to encourage people in the hiring process to focus on the diverse range of experiences, interests or hobbies a prospective employee has.

My theory is simple; it’s a law of averages.

A weighted mean across a group of strange, conservative, loud and quiet people is going to give you a balanced, well-rounded employee. I always encouraged inter departmental lunches & internships so my staff were encouraged to learn and grow from the diversity within the organization.

The final question is the simplest yet potentially the hardest to ascertain – “Am I hiring kind people?”

I’ve always thought work was like family – you spend most of your life inside an office building with a bunch of people who you should know inside out. If I was to argue for a common trait inside my workforce; despite making my point about diversity above – it would be that a person had a history of caring for others.

If we are to create a familial, community environment – this kindness is essential to our success. As companies have scaled and budget improves I feel the easiest way to find this out is to follow my golden rule – “always have a meal together before you work together.”

If this cash or time isn’t an option look at their history of service to their family and community. I believe I inherited this belief from my Jesuit education at St Aloysius College, an all-boys school were we were encouraged to be Nam Ceteri Homines or Men for Others.

To conclude – company culture cannot be controlled and is this day and age; more than ever, the truth will always prevail.

With this in mind, employers should look to prioritize culture as both a strategic initiative to maximize their current public valuation but should also should look to the more immediate benefits.

According to the University of Warwick study – workforce productivity increased between 12-20% when employees were shown to be happy.

Additionally – firms are more likely to attract and hold onto the best talent when they are seen to be a great place to work; this is a vital ingredient for growth.  

Finally – if the hottest companies in tech have the ping pong tables & sleeping pods – why don’t you?

Cash in on your Culture – the winners are always grinners.

Disagree or agree with me? Let me know in the comments below 

Originally posted on WolfofYorkStreet.com