Culture as a Competitive Advantage
by Laura Smith, Head of HR and Community at Trade Ledger™
Thousands of start-ups fail each year. Why? Because they don’t have right team and culture in place.
In fact, it’s the 3rd most commonly cited reason for failure after poor market fit and insufficient capital. Yet so few companies proactively manage their culture and people the way they would other sources of competitive advantage, like their IP or manufacturing process. But that’s changing. With a demonstrable and strong correlation between company culture and business performance, more effort is being invested into understanding how to build and retain high-performing teams. Here are some of my thoughts.
Great people aren’t looking for a new job
Think about the most talented people you know. Are they actively looking for a new job? Usually the answer is no — because the best talent are lavished with interesting work and perks, and companies are continuously fighting to retain them.
So why do those companies looking for the best talent post on job boards?
In my experience, if you want to attract the best people you need to do five things really well:
- Go to where the talent is — the talent isn’t necessarily on job boards, but perhaps social events like meetups where smart people come to meet other smart people and to learn more;
- Get in early — hire graduates and interns and give them the opportunity to shine;
- Find the switchers and give them a path to a new career — for example, we’ve hired some of our best people through coding bootcamps;
- Use your own people — great people attract great people. Use your existing team recruit your new people. Give them the means to do so, like great videos they can post on Instagram, but also the incentives;
- Create a company narrative that inspires — a narrative will convince people to join as well as help retain people. Modern HR is about pull not push.
HR isn’t responsible for your learning path
I’ve never really thought it was the job of HR to improve morale — winning and learning every day takes care of that. Similarly, I don’t believe it’s solely the role of HR to map out an employee’s learning needs and create formal learning courses. Our role, alongside leaders is to build an open and rewarding learning environment, to attract the smartest people who can share their knowledge with others and allow people to create their own learning path.
The fact is that in today’s fast-moving environment if you’re not learning every day on the job, then you’re probably working for a dinosaur. If we gave you a learning plan, it would be obsolete within a month.
In today’s world of shorter job tenure, everyone needs to be more mindful of their own development. A few ways that you can encourage internal knowledge sharing include: facilitating lunch & learn sessions, sharing “weekly blunders” so others can learn from it, and fostering a no blame culture/physiological safety, so people feel safe to step out of their comfort zone.
Ditch the SMART objectives
SMART goals can suffer from two fatal flaws — they can be too long-dated for a system of flux and they’re another form of micromanaging in a world where autonomy increasingly counts. In a fast moving, innovative company, it is near impossible to predict the exact steps you will need to take to achieve your overall objective. Rather than box people with SMART objectives and be too prescriptive on the path people need to take, we focus on the outcome we want people to reach and align to where our company is heading. We then empower and trust our people to figure out the”how they’re going to get there” themselves. After all, that’s why we hired them.
Drop the 1980s baggage
In the industrial age, the main goal for companies was to operate at the highest scale. Work was therefore organized into standard, repeatable tasks with strict processes and formal hierarchies. But we now live in the information age where we need to give employees — and teams — the freedom and autonomy to learn, problem solve and grow. We have ditched the heavy performance management tools, and annual misery. They slow us down, and become a tick box exercise. Let’s be honest, nobody likes an annual performance review.
So throw out the other baggage from the past — like SMART objectives, meetings for meetings’ sake, and job descriptions — and challenge the status quo.
No more HR police — let common sense prevail
I remember when I was first referred to ‘the employee handbook’. A ring binder of at least 100 pages that would be given out to new employees and set everything from expense policy to dress code. I couldn’t believe such a thing still — or ever — existed.
In the company I work for now, we make software that runs banks. How can we trust people to do that but not to expense a meal? The answer is that common sense must prevail. You can’t legislate for every possible rogue action, but instead you’ve got to assume that, on balance, most people will do the right thing.
Create leaders not managers
The command and control management style is thing of the past. A bottom-up leadership style empowers teams to operate independently and with the freedom to move quickly. This is a great benefit for fast moving companies, to help increase productivity and efficiency. We hire people who aim to solve tomorrow’s problems — before we may even know they exist — rather than waiting for managers to instruct their next steps.
Invest in your leadership capability and be clear on the leadership style you want to foster… it will have a huge impact on your culture. And once you find the right leadership style for your business, the rest in terms of the right structure will follow.
Many businesses are ditching the outdated pyramid hierarchical structures filled with bureaucracy, for smaller cross-functional, self-organized teams. Whether you organise your people into squads, tribes or scrum teams — productivity can thrive when you have the right leadership style and structure in place for your business.
Culture grows organically, but that doesn’t mean it can go untended
Culture gets to the heart of how a business functions. However, a great culture doesn’t just happen by itself. Like a garden, culture grows organically. But, in the same way as you need to mow the lawn and cut the hedges to get the garden you want, you need to cultivate the right culture. What use is posting values on the wall if the leaders don’t embody them or you don’t expect people to live up to them? Negative behaviour begets negative behaviour in the same way as positive behaviour begets positive behaviour. And since culture has been proven to make such a significant difference to performance — it can’t just be left to itself.
At Trade Ledger™, we created a Culture Hub, that consists of a group of employees who continuously focus on bringing our culture and values to life. This can range from running weekly round-up sessions (to keep everyone informed on business updates) all the way to organising our social events — because having fun is equally important to us!
Diversity and equality aren’t just buzzwords
Imagine if you kept a secret about who you really are and couldn’t tell anyone at work for fear of discrimination. Could you do your best work? Would you be able to reach your full potential? Diversity and equality aren’t important because there’s a section in your annual report devoted to them. Diversity and equality matter because you want everyone to bring their whole self to work and be valued for who they are — this is when people can reach their full potential.
At Trade Ledger™, the best thing we have done, was focusing on building an inclusive culture first, and it naturally brings diversity to the workplace. As noted, diversity advocate Vernā Myers puts it,
“Diversity is being invited to the party. Inclusion is being asked to dance”
Inclusive cultures require top-down commitment from the leadership team, a transparent culture and a review of every step of the employee life cycle. If want to attract the very best people, avoid asking them to choose between unpalatable trade-offs, like having to choose between motherhood and a career when both should be possible. Try to walk the talk, don’t just talk the talk: being more flexible with your team at work can go much further than a few extra $$.
Salary isn’t enough
Companies need to offer a competitive financial package for sure. There is so much more transparency than in the past that people know what they could get paid elsewhere. But paying a big premium is unlikely to get you much better people in my experience. Why? Because although people expect to be paid well for the work they do, that’s not enough. People want to be constantly learning. People want autonomy. People want to feel comfortable in their work environment, which to some people might mean a foosball table, but to most means a tolerance for risk-taking and forgiveness for mistakes. And, increasingly, people want to know the work they do makes a difference. Being bullish, I believe we can continue to make the world much better — because the best people will gravitate towards the places where they can have the most social impact.
At Trade Ledger™ we’re reinventing lending to boost economic growth and social mobility. If you’d like to speak about joining our smart and fast-growing team, please drop me an email at email@example.com.