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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Dilbert on Cultural Fit

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I’ve written before about hiring for cultural fit, and about the importance of prioritizing cultural fit over competence when hiring at startups. I started thinking about it again when I saw this Dilbert comic, because it pokes fun at the culture of startups and their propensity only to hire people who fit into them. But what are we talking about when we talk about cultural fit, anyway?

You’re probably familiar with some of the stereotypes around startup culture (free massages and dry cleaning, craft beer, cool art on the walls and dogs at the office, pulling all-nighters to ship on time) and the kinds of people who work at startups (according to Dilbert, “self-conscious hipster” types with “an earring and headphones.”) Stereotypes like these give you a picture of what startup culture might look like to an outsider, but they don’t reflect the intrinsic values that define startup cultures.

Gnip CEO Chris Moody explains this distinction really well when he talks about values vs. vibe. He defines values as “the guiding principles or code-of-conduct” that inform a company’s daily operations, whereas vibe is “the emotional side of the company … highly influenced by outside factors.” To figure out whether an aspect of your startup culture is a value, he says, try asking yourself these questions:

-      Is this aspect of the company important to our long-term success?

-      Does this aspect need to be maintained forever and is it sustainable?

-      Does this aspect apply to all areas of the company and to all employees?

-      Will establishing this aspect help us make important decisions in the future?

So, for example: riding your fixi to the office or playing foosball between coding sessions are vibes. Treating people with respect or being passionate about your work? Those are values.

Your company values should be clear, accessible, and pervasive – take, for example, Zappos’ 10 core values. Having clearly defined values is important because they drive your company culture, not the other way around. It’s also important when you’re hiring for cultural fit, because without clear company values you run the risk of making poor hiring decisions: hiring people because they look or act or talk like you, and not hiring people because they don’t.

Here’s an example: Businessweek says hiring managers are now asking candidates questions like, What’s your favorite movie? Or, What’s the last book you read for fun? If you’re asking interview questions like these at your startup, you need to make sure you’re screening for values and not for vibe. Just sharing your love of The Big Lebowski doesn’t make someone a good cultural fit for your company: in fact, it’s often the people who give unexpected answers who end up being your company’s most creative problem-solvers.

I chair the board of directors for the National Center for Women & IT (NCWIT), whose Entrepreneurial Alliance works with startups to help them recruit and retain more women in tech roles. There’s strong ROI for including more women on technical teams: women improve collective intelligence, make startups more capital-efficient, and bring the perspectives of half the population. But if you’re a “dude brew” startup, you may not even know why you don’t hire more technical women, and you might need help from NCWIT removing gender bias from its portfolio companies’ job ads.

Gnip recently told NCWIT that they added three women to its engineering team. They credited this in part because the VP of Engineering, Greg Greenstreet, attended every local women-in-tech networking event, recruited on campus, and talked to as many female candidates as possible. But fundamentally they succeeded in hiring more women because, like Etsy, they made diversity a value. Gnip assigned strategy, money, and resources to their recruiting efforts, and factored diversity into evaluations of cultural fit.

Every startup is going to have a company culture, by design or by default, so you might as well design yours with values that attract and keep the best possible talent. Once you’ve distinguished between your values and your vibe, hiring for cultural fit won’t just be easier; it will give you better – and likely more diverse – employees.

If you’re interested in more information about joining NCWIT’s group of startups, let me know.

Startup Culture: Values vs. Vibe

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My friend Chris Moody, the COO of Gnip, has another guest post up today titled Startup Culture: Values vs. Vibe. He’s written about this in the past on his blog, but we both thought it was worth reposting. Enjoy – and comment freely, especially if you disagree or have constructive feedback.

I hear some form of the following question frequently from founders that are starting to have early success:

“How do we hire a bunch of new people and grow the company quickly without losing the culture we’ve worked so hard to establish?”

I’ve been fascinated by different company cultures for as long as I can remember and I love asking entrepreneurs to describe the culture of their companies.  Over time I’ve come to realize that when you break down culture descriptions you’ll often find a mix of two components:  values and vibe.  Although each component can have a significant impact on the overall feel of a company, the way you establish and manage the two should be different.

Values

I think of values as the guiding principles or a code-of-conduct upon which a company was founded and which it operates on a daily basis.  If you establish the right set of values early, these principles won’t change with time.  Values establish your company’s view of the world and determine how you treat others including employees, customers, partners, and investors.  Most importantly, values serve as the foundation on which tough company decisions are made.  Values are 100% controlled by the company and should be unaffected by competitors, market conditions, and industry trends.

The people you hire will come with their own set of values. Every person you hire should have personal values that completely align with the values of your company.  95% isn’t good enough.  In fact, if a team member violates a company value, the violation should result in removal of the individual from the company.   Here are some other things to consider around establishing and maintaining company values:

  • Document and talk about your company values with your team all the time. Consider publishing your values, and talking about them with customers, partners, etc. to add an extra level of scrutiny to your commitment.
  • I believe a set of five or less documented values is ideal because you want all your employees to have them top-of-mind when making decisions.  If you have too many values, people simply won’t remember them.
  • Determine a set of tough “trade-off” questions that you can ask during the interview process that will help you determine if a candidate’s values align.
  • Good values require tough decisions to be made in order for the values to be upheld.  If you establish values that are never challenged, these values aren’t serving any real purpose.

This last point is particularly important.  Watered down or generic values might be easy to uphold, but they also won’t establish a strong culture.  Companies with unique cultures tend to have values that are unconventional and sometimes controversial.   A famous example of a unique value is Google’s “Don’t Be Evil”  (I believe the actual company published version is “you can make money without doing evil”).  I’m guessing “don’t be evil” is discussed at Google hundreds of times of day when decisions are being made, and I bet it is surprisingly hard to stay true to this value even though the premise seems fairly simple.  The fact that Google allowed this value to become public knowledge has resulted in a huge audience of observers that are constantly scrutinizing Google’s actions to see if they are staying true to their values.

Vibe

Vibe represents the emotional side of the company. Like all emotions, vibe can be fairly volatile and is highly influenced by outside factors.  For example, think about the vibe of a company on the night that the first product is launched vs. the vibe of the same company when Apple announces they are launching a competing product or service.  When it comes to vibe, management can certainly set a tone and lead by example, but the reality is the vibe of a company will naturally change with time as the company grows and the products/employees mature.    The biggest influence on vibe is typically success.  Most companies that are doing well tend to have an overall positive vibe.

In the last few months, I’ve talked to two different startups that described one of their values as “Work hard. Play hard.”  Is this really a value? Perhaps this statement actually describes the vibe at a certain moment in the life of the company. If an employee is no longer willing or able to play hard but is still producing at a high level, is this person no longer valued by the company?   Working and playing hard together might be an important part of the company in the early days, but will it be a necessary component for all 300+ employees when the company has been around for 10 years?

As a leader, there are aspects of vibe that you will naturally want to try to control.  However, you have to ask yourself a few questions:

  • Is this aspect of the company important to our long-term success?
  • Does this aspect need to be maintained forever and is it sustainable?
  • Does this aspect apply to all areas of the company and to all employees?
  • Will establishing this aspect help us make important decisions in the future?

If you answered, “yes” to all of the above, congratulations: you’ve just identified a new potential value.  However, it can be fairly liberating to realize that the foosball table in the middle of the office is nice, but it isn’t crucial to the long-term success of the company.

I know this won’t be a popular statement, but I don’t think maintaining culture (as defined by many entrepreneurs I’ve encountered) is important.  Instead, I think it critical to focus on establishing strong values early and hiring people that have aligning values.    Maybe it is all just semantics on how you define culture, but I believe you shouldn’t sweat the vibe part.  You’ll have an overall positive feel if you are successful and that is the only type of vibe that really matters.

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