Can You Help This HR Manager Build a Great Culture in Her Start-up?

I got an inspiring and fascinating email last week from an HR manager at start-up who is working like crazy to build a great culture. See below. She asked if I had any ideas about how to build and sustain a great culture, and I offered some bits of advice, emphasizing that having written values is one step (like SuccessFactors Rules of Engagement, similar to her Declaration of Commitment) but that having senior managers who live the desired values is what really counts.  I also pointed her to my "Honor Roll" of places that use The No Asshole Rule.  And I think she is perfect candidate for Guy Kawasaki's new book. But I think she could use deeper and wiser advice, so please jump in and help her, as I love both her energy and her goals!  Here is her note (with a few minor changes, to protect both the innocent and the guilty):

Dear Bob,

I have been a huge fan of the No Asshole movement since I first read about it over a year ago.  At the time, I was an HR Generalist at manufacturing company.  I passed around a few articles on the subject to our management team and everyone was impressed!  They all agreed, how nice it would be to have such a policy… they also agreed that there was no way it would work!  They said we would have to fire at least half of our employees, especially management!  Oddly, they didn’t see the problem with that... I did. Months later, I was given my performance review. My boss gave me a glowing review, he explained how I had exceeded his expectations, how he really appreciated me, how I had gained everyone’s trust… and how I wasn’t going to get the promotion to HR Manager because I was a woman in the industry.

I quickly updated my resume and had an interview the next week.During my interview with the new company, I shared with them my desire to have a no jerks policy and to promote trust within the organization.  I knew it was risky, but I was tired of working with jerks!  To my surprise, they didn’t think I was crazy!  I was hired as the HR Manager, the first 10 employees of the company.  I was given a laptop, a phone, a pen and a clean slate. Unfortunately, over the past 6 months and one 12+ hour day after another, I haven’t had much time to work on my No Jerks policy.  We did come up with an initial list of 10 statements “the Declaration of Commitment” to help drive our culture very early in the game and have been sharing it with all new hires.  I can’t tell you how excited everyone is about the D.O.C..

But, as probably typical with a startup (not that I want to be typical), a great deal of work must get done with limited staffing and tremendous growth going on... we're pulling away from our ideals.  I’m worried that our core values are getting lost in the chaos and I want to get us back on the right track.  I need to write out a strategy for supporting these values throughout the organization and I'm looking for a good place to start.

We hand-picked an incredible workforce and I don’t want to let them down.  Do you have any suggestions or advice for me?  I would appreciate any input you are willing to share!

Please help this HR manager. The early days of a start-up are a crazy time, but it is also the critical period when an organization's culture is born, and for better worse, expectations and traditions that are set at the outset are very difficult to change later.

Comments

[Patricia Rogers]

Rule #1: Don't think raises will be confidential. Employees compare notes, even if there's a policy against it.

Rule #2: Don't advertise to all what you will only deliver to some.

Rule #3: Make the raise or bonus system completely transparent, such that any employee will be able to calculate what to expect for a pay raise for their job performance, with or without it being tied to an evaluation.

The new CEO of our non-profit hospital sent out a letter to each and every employee stating that there would be raises of 1% to 7% for every employee. Guess who got 1.5%? Is it because three years ago, I made an issue about being paid 8% less for doing the same job as my one male counterpart (who happens to be my husband) in my department after nearly 20 years on the job? I won that 8% but now but I'm paying it back by not getting adequate raises to keep up with the cost of living. Additionally, my husband is being punished for my "transgression"of asking for equal pay for equal work, as he also received 1.5%. (We do the exact same job.) Our son works there, too. His raise was 1.5%. Everyone else in his department received 5%. All RNs and techs got 5% across the board throughout the hospital. Only 1 other person received 1.5%, and that other person is unfortunately in a position formerly occupied by someone who complained to HR about their pay rate. Does a raise of only 1.5% tell us that we should start looking for new jobs NOW before they decide to replace us? I have no idea why we both got 1.5% and neither did my boss or his boss. I am definitely not an underperformer. My boss said he complained to his boss on my behalf. He said that his boss doesn't know how THEIR OWN raises were determined. Less than the cost of living is bad, but 1.5%? The worst part is that no one knows WHO makes the calculations or HOW they are calculated. Don't advertise what you can't deliver. This was a "bait and switch" raise announcement. Avoid those at all costs.

[Richard]

My experience is that there is a real decision to be made between growth and quality, the latter represented in this case by people who will support and contribute to the culture you want.

I've learnt that whilst you can provide a measure of clarity and incentive as a manager the fundamental fabric of culture comes from the people you have on board. You can teach an arsehole to shut up most of the time, you can't teach them not to be an arsehole. So for me, this really does come down to who you have on board.

You get to make this decision with every hire. Often in a growing company the decision is made in the face of pressure to fill a role in order to get a critical assignment started or to relieve a colleague who is burning themselves out. There are all sorts of very good reasons to compromise.

I can tell you that the very large majority of companies in my experience choose growth over quality, and assume that it can be sorted out later or will be someone else's problem.

A small number of companies have the courage to hold firm, and stick to their quality threshold, whether when hiring or afterwards. This is almost always purchased at the cost of short term pain and lower growth.

I suppose the real question is what is truly important to the organisation? If you have a "handpicked" group of employees I hope the answer is quality but the management team's priorities will always manifest themselves accurately over time in how the small decisions get made.

My advice (for what it is worth, and caveat emptor) would be to back what you believe in and that will mean only hiring people who, in this case, aren't arseholes and won't tolerate other arseholes in the workplace. If you can't get support for that in the face of other corporate pressures, it was never real.

[Bill Burnett]

As an innovation talent coach, I find the single most important aspect of culture in a company defined in how people interact. There are two crucial factors. First, in many hierarchical companies interactions often have an undercurrent of position and privilege. The notion of superior/subordinate translates into a adult-to-child relationship where the ‘child’ looks to respond to the ‘adult’ to avoid displeasure. We hire people for their brains. This relationship undercuts that key asset. If you think about it, when an adult is present in a room full of children, the children look to the adult to solve problems. This sort of relationship is evident in many of the stories Bob tells related to his No Asshole Rule. It is an unpleasant environment for everyone except perhaps the CEO.

Many companies are adept at avoiding this trap. Gore is a company that does this well. I consulted for an Australian company where the new turn-around CEO established a single internal job title: ‘Colleague’. He inverted the organization chart putting the customer on top and the people who interacted with customers just below them, and all the management team (he called ‘team leaders’) underneath them. The chart underscored the role management plays in supporting the work done by the people who actually produce the goods and services for customers. He did some other clever organizational shifts as well. The results were phenomenal: – a 16-fold increase in sales; ROE reached 35% after tax, and increased market share from 4% to 16%.

In the famous example of the NUMMI plant in Freemont California just across the bay from Stanford, the old hierarchy was thrown out and replaced with three levels for the entire plant – Team Leader (a union worker), Group Leader, and Plant Management. The plant was managed by (drum roll please) HR! At NUMMI everyone actually working was ‘Team Member’ with a single pay grade.

Second, is a two step engagement process: 1) Link the sense of personal worth to the job. This is the 5 why-is-that-importants. You ask why a function is important, and then why that (the answer to the first why) is important, until you reach something like ‘because it help people’ or ‘because it makes life better’. You’re a tax collector, why is that important? … ‘Because good roads and excellent schools make the world a better place.’
2) Organize the work such that it is team work. Now you have a team that is working together ‘to make the world better’. Nothing is more fun than working on a team with a great purpose, and nothing drives the desire for excellence more strongly than working together to make the world better. It is the most powerful workplace motivator.

I have posted this at my blog (superinnovator.blogspot.com) where it includes hyperlinks to Gore and the 5 whys.

[Chris]

I think your comment that you need leaders in the company who live the values is the key to it all. The debate continues on whether company culture is tangible (I think not, as you can't issue a memo to establish a trusting environment).

To create a culture, she and the company's leadership need to deliberately plan on what values they want to stress and live on a daily basis. Those values need to be visible and actionable, and absolutely can't become "shelfware". If no one ever references the values, then they are useless.

If you don't hear someone in the first month say "Oh, that's a great idea, it fits perfectly with our values" or "I'm going to disagree with you Mary, I don't think that fits within our company's values" then the culture is disconnected from the values.

How to find the time though? If you don't make the time to discuss and establish the values, then they obviously weren't a big enough priority. If you don't schedule the time to chart out the future of the company, it either won't have one, or the future will be haphazard.

Treat this as a "skunk works" project if need be. Set aside 4 hours a week to make incremental progress.

[Chris]

I think your comment that you need leaders in the company who live the values is the key to it all. The debate continues on whether company culture is tangible (I think not, as you can't issue a memo to establish a trusting environment).

To create a culture, she and the company's leadership need to deliberately plan on what values they want to stress and live on a daily basis. Those values need to be visible and actionable, and absolutely can't become "shelfware". If no one ever references the values, then they are useless.

If you don't hear someone in the first month say "Oh, that's a great idea, it fits perfectly with our values" or "I'm going to disagree with you Mary, I don't think that fits within our company's values" then the culture is disconnected from the values.

How to find the time though? If you don't make the time to discuss and establish the values, then they obviously weren't a big enough priority. If you don't schedule the time to chart out the future of the company, it either won't have one, or the future will be haphazard.

Treat this as a "skunk works" project if need be. Set aside 4 hours a week to make incremental progress.