The No Asshole Rule at SuccessFactors

I wrote a post a few months back on The No Asshole Rule Reaches New Heights, which described how CE0 Lars Dalgaard enforced the rule at SuccessFactors, a global softwate companies with headquarters in San Mateo, California.  You may recall that he has employees sign contracts in which they commit to not acting like assholes.  I've got an update:  The rule seems to be working and is part of the company's current success. Check out Succcesfactors list of five founding principles that Dalgaard spelled out when he started the company in 2001 -- "No Assholes" is number 5.  Now that is my kind of CEO!  This story has lovely implications for entrepreneurship. I've had at least half-a-dozen entrepreneurs tell me that they used the no asshole rule as one of their founding principles, but all told me that -- although they used the word "asshole" when talking about who they wanted to hire, fire, and so on -- they used more polite language to describe it in written materials or just talked about it rather than writing it down. I applaud Mr. Dalgaard for his courage and plain talk. 

I also love how Dalgaard measures the company's current success. I quote:

As of September 2006 we have made a dent into this goal by achieving:

Real usage by 2 million employees worldwide

Real usage by employees in 139 countries and 18 languages

Growth 3 times that of our nearest competitor

Near 100% customer referenceability

Dramatically low employee turnover

Employing no assholes

Now that is a balanced scorecard!  And one that is short enough that it doesn't suffer from the Otis Redding Problem

UPDATE ON OCTOBER 2nd: I pasted the above text in blue on Sunday October, 1 from the SuccessFactor site. So it said "Employing no assholes" just yesterday.  But it seems that someone at SuccessFactors has decided that the word "asshole" is a bit too much. As Stan points out in his comment below, it now says "jerks."  I bet Lars still calls them assholes, but someone with less courage has talked him into a bit of censoring.  My hunch -- and this is a hunch based on no other information-- is this is the kind of thing that people do when they start "prettying-up" a company to sell it or go public. I could be wrong, but let's see what happens in the next few months -- or days.   In any event, I still have to give them credit for straight talk for the first five years, even if they are losing a bit of courage now.

Comments

[BC]

Ha ha. This is hilarious. I'm a manager there. Personally, I'm probably the biggest ass in the silicon valley... and I don't care.

[Bob Sutton]

Stan,

I put this up yesterday afternoon and it said "no assholes." It looks like someone had changed it since then!

[Stan Taylor]

I clicked on your 'five founding principles' link, and #5 was listed as 'No jerks'. Also, the success criteria alsoc cited jerks, not assholes. Hm.

[Jan Barkhed]

Setting goals on employees and making performance reviews have become established practices within large as well as small companies. But how effective is it? Is there any empirical evidence that it produces competitive, innovative and effective organisations? Or will employees only learn how to reach the goals without relay achieving lasting and measurable results. Is there any other way to produce these results without setting goals and making reviews? Does goals really describe what is important within a company?

[Roman Rytov]

Looks like that's gonna be an interesting book. I've preordered already:-)
Interesting what to do with assholes if they accidently happened to be in the company, for instance, when a NAA (no asshole agreement) hasn't been a part of the deal.
I tried to drop a few ideas on a similar topic (How to manage a Squidward): http://roman-rytov.typepad.com/miles/2005/12/how_to_manage_s.html