Scaling and culture fit

A newsletter by me, Kiko Homem de Mello, CEO of Qulture.Rocks

Hello :)

A tough few weeks have gone by. I thought I might write a bit about all that.

Scaling and culture

A very common worry amongst founders is how rapid scaling might - negatively - affect a startup's culture.

By culture, I mean a system of rituals, incentives, values, stories and other “cogs” that produce a given set of behaviors in the members of an organization.

The idea is that as a company scales quickly, it may have trouble keeping its culture right. Keeping it “right” means having most people in it behaving in alignment with what's needed for the success of the company.

Let's call this cohesiveness the organization's “Culture Density” [1]. Culture Density, to make it simple, might be calculated as a) the # of company employees who behave consistently according to culture, divided by b) the total # of employees at the company.

But why is default to have Culture Density fall as the company scales?

First, small startups that start to scale don't always know what their culture really is, or even what it should be. There's little clarity around the fact that culture needs to serve strategy, and not the founders’ wills.

Second, startups don't really know how to hire for culture fit. I might risk saying that very few organizations in the whole world really know how to hire for culture fit. It's hard and takes a lot of discipline. And it's also very easy for a company to trick itself into thinking it's properly hiring for culture fit. People tend to mistake “feeling right” about a candidate with finding culture fit.

I've felt the effect of falling Culture Density myself in the past few months.

As we started scaling, we hired more and more people without properly scanning for culture (we thought we were - at least some of us did - but we really weren't). There wasn't a proper process in place that allowed us to assess culture. And in the heat of the need to fill open positions, we overlooked telling signs, did less referral checks with candidates, and on and on.

And the effect of some of these culture misfits in the company was really significant. Our culture isn't for everyone - no great culture should be - so it isn't their fault or anything like that. But the fact that these people had other values and behaved differently than how we needed to behave to succeed really put a strain in the organization. And that's the root cause of some of the stress we felt in the past few weeks.

Anyway, most of these false positives have already left the company, and we're putting measures in place to make sure this doesn't happen anymore.

How to keep Culture Density

Let me tell you a bit about what we're doing to get hiring for culture fit right.

First, we're training our interviewers to properly interview for culture. I learned from Stripe a couple of months ago that interviewers at the company are specialized in a couple of values, and only interview for them. That allows them to be much more precise and focused, which leads to more precision. We're also going to train people on interviewing for these pairs of values [2].

Second, we're instituting “bar raisers”, something borrowed from Google and Amazon: people who are not emotionally attached to the position being filled (i.e., people who can say “no” to candidates without feeling the direct pain of the position being left open), and that have to vet all hiring decisions. For example, we can have an engineer vet all marketing recruiting, or have someone in marketing vet recruiting decisions in finance.

Third, we're going to be more open about our culture, especially with prospective candidates. Startups don't have very strong employer brands, and it's frightening to take any action that might spook part of an already small candidate pool. But it's the right thing to do, at least at our stage [3]. So we'll do more work to give candidates a full picture of what we expect them culture-wise, so they can self-select or withdraw from the process before the emotional attachment gets too big.

With these, I hope we get less false culture-fit positives in the company, and get to scale it in a smoother way.

Tweet about product management in the enterprise

Here's a tweet I sent out last week about how hard it is to build product for enterprises.


That’s it for today. I hope this helps you unlock your potential 🙂

What is one thing I could do to dramatically improve this newsletter?

Cheers and have a good week,

Kiko

[1] Of course, here we are worried about the density of people that have the “right” culture. It's no good to have a very cohesive company filled with people that act alike but out of alignment with the culture that’s needed for its success.

[2] We actually don't call them “values” or “core values” at Qulture.Rocks. We call them “principles.”

[3] I think it's pretty hard to ask a very small startup to be that rigorous in its hiring. Even tough I can tell how important culture fit is in the early days, I just don't think being =strict about it is practical or realistic, aside for some very few hot Silicon Valley startups. The candidate pool is just too small.