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M&A Integration Drama? Don’t Start With Culture!

By gothamCulture
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M&A integration culture

We’ve heard it dozens of times: Not focusing on culture in M&A integration will lead to immanent deal failure. That can’t be good, especially considering the amount of M&A activity happening these days. According to Deloitte’s M&A Activity Index, there were $1.8 Trillion USD worth of deals in the first half of 2015. Yet, most studies say that only about half of mergers and acquisitions exceed shareholder expectations.

We’ve all heard the stats on M&A, and they only serve to reinforce the idea that deals are destined for failure. So, forcibly combining two corporate cultures into one feels a lot like a mad social science experiment.

Why Not Start With Culture?

mergers-integrationThe truth is, it’s far too simplistic to say that culture is the only driver of M&A performance during integration.

Culture is defined by the organization’s values and how employees behave. But strategy defines the future direction, which in turn defines how the organization expects employees to behave. By focusing on strategy first, your organization is able to guide the new way employees are expected to behave in the post-acquisition culture.

In my doctoral dissertation, I investigated whether a similarity between strategy, technology and culture was better or worse for M&A earnings, stock price, and P/E-ratio post acquisition. What I found was surprising. Companies had higher stock prices when they acquired companies with a different strategy, and a different culture.

With this in mind, here are some ideas for companies that are looking to tie “the corporate knot”:

  1. Different business-level strategies between the parent and target = better results. Yes, it turns out that birds of a feather do not flock together. It’s critical to start with strategy because that defines what direction you want to go in. Second, the evidence suggests that if you, the parent company, gets value by always building new products, your best bet is to acquire a company that is the complete opposite of you; one who creates value by keeping costs down, scaling, and building efficiency.
  2. Solving the culture conundrum starts when opposites attract. It is critical to align the organization around one single dominant culture. Remember, my research showed that companies had higher stock prices when they had acquired companies with different cultures.

Why Different Is So Much Better

Different is better because it’s easier to force the acquired company to let go of their culture through restructuring and organization redesign. When a clear choice has to be made, the parent organization can easily dominate the target company. A clear path forward is then set.

Additionally, different organizations showed improved financial performance when aligning strategy and culture starting one-year post acquisition. Strategy first, culture second.

Final Thoughts

Strategy sets the direction of where the newly acquired company needs to go. The structure defines what the organization looks like. And culture defines expected employee behaviors. Culture is critical, there’s no doubt about that. However, until you define where you want to go, and how you’ll operate, you can’t define how you expect your employees to behave.

Why Values (Not Perks) Define Your Startup Culture

By gothamCulture
Published at In Category Blog Tags: , ,
values perks define startup culture

Entrepreneurship has exploded in the U.S. market in recent years. According a recent Global Entrepreneurship Monitor (GEM) report, there are now over twenty four million entrepreneurs in the U.S., making up 14% of the total population.

There may be a number of contributing factors to this trend. Entrepreneurs are often cited as modern day adventurers and explorers. They are willing to takes risks and push innovation. And for many, they exemplify the American Dream. That is, everyone has the opportunity to be successful, no matter how you started or where you might be from.

Unfortunately, glamorizing entrepreneurs—while flattering—doesn’t tell the whole story of what founding and growing a sustainable company entails.

Despite the number of entrepreneurs in the U.S., the country now ranks 12th among developed nations in terms of business startup activity. American business deaths now outnumber business births, according to Gallup and the U.S. Census Bureau.

source: Gallup
source: Gallup

As a leader of a growing startup, there are some brutal realities to face. These can include challenges obtaining capital to drive growth, an inability to attract the right talent, or the constant struggle of trying to manage an organization that looks fundamentally different every six months.

In order to grow a successful organization, knowing where to spend your limited resources is critical to success. Startups—especially in Silicon Valley—are often lauded for their culture. And unfortunately, “culture” in this case is many times defined by a set of borderline unbelievable perks.

You Are Not Your Perks.

With so much on the line for your growing business, you cannot put your perks above what you value. Perks seem great at the start, but they tend to lose their luster over time, leaving you with little of substance to sustain engagement, excitement and purpose.

With competitors grappling to offer some wild new perk in an attempt to attract talent, companies are getting sucked into a doom loop. Everyone will end up losing as they try to keep up with the Jones. The perks that were once on the cutting edge become the standard expectation, which only serves to put startups in an even worse position to compete for talent and sustain growth.

Additionally, many startups lack the capital to offer these types of perks, let alone sustain them over time. This puts them at a disadvantage compared to their larger, more established competitors.

Finally, perks and incentives are, by their nature, a manifestation of the core values of an organization. By offering endless perks, startups can send messages about what is valued that may have unintended consequences in the long-term. This can be a real problem if those messages are in conflict with your core beliefs or if those perks are being used as a replacement for core values.

By defining your values and culture based on the perks you offer, you’re sending the message that your company values following the latest trends rather than a being intentional about the deeper beliefs of your company culture. Employees may be left without any clear direction for how business should be done, how customers should be served and what it means to be a member of the team.

This is not to say that all perks are bad. Quite the contrary. Perks can help reinforce meaningful values and help drive the behaviors that are required to yield success in the next chapter of your startup’s journey. When used thoughtfully, in conjunction and in direct reinforcement of your organization’s core values, these perks can prove to be both sustainable and truly meaningful.

Rallying your team around a meaningful purpose and supporting that with appropriate perks is not only a more sustainable way to drive growth. It ensures that the people you attract are people who are joining you for the right reasons.

Values can have deep and lasting meaning for people, giving them a higher purpose. This is something that perks alone can never do.

This article originally appeared on Forbes.

 

What Every Founder Needs To Know About Scaling Startup Culture

By gothamCulture
Published at In Category Blog Tags: , , ,
scaling startup culture

For startups that want to stick around, growth and sustainability are the goals. But growing like Facebook or Twitter is far more difficult in reality. According to the Small Business Administration, only about half of all new businesses even survive to reach their fifth birthday. Only one-third of those make it to the 10-year mark.

Scaling a startup is no small feat. It takes clarity of vision, a feasible business model and a team who’s up to the challenge of operating in an extremely fast paced environment where dynamics change continuously. It also takes guts on the part of the founders and initial team members. These types of people risk a lot by taking a chance on a new startup. The nebulous nature of these situations can be too much for many people to bear.

Read More…

What Are The Benefits Of Flexible Work Arrangements?

By gothamCulture
Published at In Category Blog Tags: ,
flexible work arrangements

The landscape at work has changed drastically over the last several decades. According to the United States Department of Labor, women constituted 47% of the workforce in 2012, up from 38% in 1980. Employees over 55 years old have grown from 12% of the workforce in 1992 to 21% in 2012, and are projected to make up 26% of the workforce by 2022.

Additionally, a telephone survey commissioned by Flex+Strategy Group / Work+Life Fit, Inc. in December 2013 found that 31% of respondents reported they do most of their work away from their employer’s location, including home, coffee shops, and business centers.

With this changing workforce has come the need for changing workplace policies. At a time when many organizations are looking for non-monetary benefits and perks to attract and retain employees, flexible work arrangements should be part of the solution, benefitting employees as well as their employing organizations.

Defining Flexible Work Arrangements

This may leave you wondering, “What are flexible work arrangements?” While telecommuting may be first thing that comes to mind, there are several categories of flexible work arrangement that have emerged over time:

1. Flexible location. This describes where work is done. Rather than working from a standard office, this can include work from home, a satellite office, a coworking space, a client site, a coffee shop, or while traveling. A flexible location arrangement is a great tool for retaining workers who do not live near the employer’s office or cannot make it into the office on a regular basis.

This benefits remote workers who don’t live near the office, must move away from the office, or can only commute to the office a few days a week. For instance, an employee might live in rural Minnesota but work for an organization based in Chicago, or an employee may need to move away from the DC-based office to be near family in Houston.

2. Flexible schedule. This describes when work is done. It can include compressed workweeks (i.e., four ten-hours work days, instead of five eight-hour workdays), alternative schedules (e.g., 10am to 7pm or 7am to 3pm during the workweek), or the ability to shift work with arrangements made to fit the employee’s needs.

Flexible schedules work well for those who have other commitments that prevent them from working a standard workday. For example, a parent may work while his/her child is at school and finish the workday after their child goes to sleep. Another employee might live on the west coast and work for a company on the east coast, and start his/her workday at 7am so he has more overlap with his coworkers on the east coast. Another employee may start his workday at 11am so he can use the morning to train for his upcoming Iron Man Competition.

3. Flexible hours. This describes the amount of hours worked, and can include part time work, job shares, and other alternatives to the 40-hour workweek. This type of flexibility accommodates individuals who need to work less than full time, or at times other than the “standard” 9 to 5.

For example, an employee may be of retirement age, but still want or need to work, so they may choose to work in a part time capacity. An employee may wish to work on weekends, or take night shifts, so they can be available to take care of his or her family during the week, while another may work part time during the day to make ends meet while they pursue their own passions.

An individual employee may take advantage of one or more of the types of flexibility, either simultaneously (e.g., working part time from home) or at different times of the week (e.g., work part time with one work from home day a week,).

The Benefits of Flexible Work Arrangements

flexible work arrangementsWhile millennial’s workplace expectations have been discussed as a driving force behind increasing flexibility in the workplace, all generations of employees can benefit from increasing availability of flexible work arrangements.

Such arrangements can afford employees the time and ability to meet the needs of their lives outside of the office, something that may be more valuable to them than monetary benefits or office perks. Working caregivers, such as parents or those responsible for aging parents, can benefit greatly from flexible work arrangements. From picking children up from school to taking a parent or spouse to an appointment, flexible work arrangements enable individuals to balance the demands of their personal lives while still fulfilling their duties as an employee.

Organizations stand to benefit from flexible work arrangements, too. And many of these benefits are discussed by SHRM at length.

Organization may be able to retain employees that they would otherwise have to let go. For example, an employee who becomes a primary care giver can utilize an alternative work schedule or reduced hours, and an employee who must move for his or her spouse’s job can work remotely.

Research also demonstrates that work arrangement flexibility can lead employees to have higher levels of job satisfaction, engagement, and performance through increased control over when and where work gets done. It allows employees to make decisions to better fit their work and work styles.

Flexible work arrangements can also result in less absenteeism and fewer accidents because employees have more flexibility to take care of responsibilities outside of work, work from home when sick (which has the added benefit of not getting others sick), and choosing to work when they are most able to do so safely and productively.

Flexible work arrangements can be an important part of creating a dynamic and diverse workplace. They can help your organization and your employees manage the competing demands of daily life. How have you integrated flexible work arrangements into your benefits package?

Preserving What Make You Great In Times Of Rapid Growth

By gothamCulture
Published at In Category Blog Tags: , ,
what makes you great in rapid growth

We’ve all heard stories of meteoric growth from companies like Shake Shack, Uber and Slack. And while many of these stories serve as inspiration for entrepreneurs and leaders at all levels, the reality of navigating a company through rapid growth never plays out as smoothly as these stories would have you believe.

Anyone who’s ever been a part of a rapidly growing organization can tell you that it presents many unique challenges not found in other organizational contexts. These challenges can test the mettle of team members and put mounting pressures on a system that is evolving quickly to try to keep pace with the ever-changing situation.

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Employee Engagement Is Not The Problem

By gothamCulture
Published at In Category Blog Tags:
employee engagement problem

Virtually every article about employee engagement I’ve read recently includes the same or similar stats. 87% of today’s business leaders cite culture and engagement as one of their top concerns (Deloitte). Only 13% of the global workforce is engaged (Gallup). And while these should still be alarming for any business leader, these stats alone don’t tell the whole story.

Engagement is often looked at as a stand-alone problem. It’s assumed that by ‘solving’ employee engagement in your company, you will suddenly have a more productive, higher performing, workforce.

But real employee engagement is woven into many other aspects of the organization, including leadership, culture, communication, and development. When you begin to change one of these, it creates a ripple that affects many others.

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Customer Experience And The Hidden Dangers Of The Comfort Trap

By gothamCulture
Published at In Category Blog Tags: , ,
customer experience and the comfort trap

The comfort trap. It happens all the time and, to a great extent, it goes unnoticed—to everyone but our customers. We don’t do it intentionally and we don’t do it because it’s the right thing to do. We do it because we are continuously trying to find ways to make our own work lives easier.

In fact, it happened to me just recently at my local fitness club. Upon checking in, the host issued me a locker room key and I proceeded to change into my workout clothes.

Now, I’ve been around long enough to know that there’s not much in life that one can count on, but men can be reasonably confident that they’ll be assigned a locker directly next to the one other guy who happens to be changing at the same time, even when the entire rest of the facility is empty. Nine out of ten times this mysterious coincidence results in a joke between the two people who are stumbling over each other to cram their gear into their lockers while the other fifty feet of locker room sit empty. In fact, this has happened to me and everyone else I know so many times at multiple fitness centers over the years that I began to really try to understand what was behind it.

It makes perfect sense when you think about it, actually. In an effort to stay organized, the person at the front desk issues locker keys in numerical order. It keeps things orderly and efficient for them. What they fail to understand is the impact this has on the customer.

customer experience and the comfort trapHere’s another example: Many years ago I was working with the members of the student counseling center of a large university. During our assessment we came to the realization that staff members were decorating their offices to suit their own style and comfort in an effort to make themselves feel more at home. Unfortunately, the effect on their student customers was anything but. Students felt uncomfortable entering these spaces because they felt as if they were trespassing into someone else’s personal space. The counselors obviously were not intentionally trying to cause distress for their clients. In fact, this ran exactly counter to their goals.

For everything you do, ask yourself; is it for your comfort or theirs? These are two minor examples of how our drive toward efficiency and order in our work may have unintended consequences on the customers that we are trying to serve.

How to Avoid the Comfort Trap

Here are a few things you may want to consider before patting yourself on the back for your perfect, and fully optimized process.

  1. Analyze it from multiple stakeholder perspectives. Just as the examples above highlight processes that work for employees but not for customers, there are just as many examples of this working in reverse. Processes that work very well for customers may leave employees having to leap tall buildings in a single bound to deliver day-to-day. A great way to help ensure that you take into account diverse perspectives is to ask these stakeholders to help you develop the processes from the start. It may take a little longer initially but it can help you avoid costly unintended consequences down the road.
  2. Create continuous feedback loops. Organizations that are able to obtain in-the-moment feedback from their stakeholders and adapt their ways of working quickly are at a distinct advantage in the market. These organizations are able to correct deficiencies and move to a vantage point where they can anticipate future challenges and preemptively address them before they have a chance to sour the experience of a key stakeholder group.
  3. Create a safe space for soliciting feedback. While some organizations have established enough trust with their stakeholders that this isn’t an issue, others may not be able to get the feedback they need if they take this on themselves. In the case of the student counseling center, it took an unbiased third party investigator to create a safe enough space for the students to feel comfortable voicing their discomfort with the décor of the offices.
  4. Immortalize your processes but don’t die by them. These key processes for delivering on your brand promise to all of your stakeholders are not something you should leave to chance. By capturing these processes and expectations, training your team to deliver in a consistent way and holding people accountable to it, you will help ensure that everyone clearly understands their role and responsibilities in the bigger picture. Job aids can also be a great way to help people remember the standards and to be sure that nothing slips through the cracks.

Nobody said business is easy. In our best efforts to drive efficiency and to help reduce the burden on ourselves, we may be inadvertently altering the experience of our customers in ways that we’ve never even considered. Without bringing together the diverse stakeholders that impact or are impacted by your processes, there is no way to ensure that you’re not falling into your own comfort trap.

This article originally appeared on Forbes.

How To Make Training More Impactful During Rapid Growth

By gothamCulture
Published at In Category Blog Tags: , , ,
training more impactful

Rapidly growing companies, startups or otherwise, are faced with a daunting challenge while they scale. Having the right growth strategy, hiring the right people in the right positions, and having a culture to support them are all crucial elements to sustainable growth.

You may already know that the balance between all of these elements is critical. But there is one component of strategy that is often overlooked in the scale-up discussion for small, growing businesses: Training.

Training as the Linchpin for Growth

Training is often considered a component of strategy, and is often discussed as part of the balance needed for growth. As your organization grows, you want and need a dynamic, well-trained workforce, and professional development becomes a strategic objective in the company’s overall planning. But there is a place for further–and dare I say more impactful–integration of strategy and training. That is, bringing a strategy component into training.

Integrating your company’s strategy into training ideally produces two key outcomes:

1. Alignment. Your workforce, managers and senior leaders are trained and get better understanding of how strategy works for the company.  This has a positive effect as change (vision, new objectives, etc) is managed across your rapidly growing organization.

Misalignment between culture and strategy can happen in many different ways. For example, if the culture and strategies don’t align, the organizational culture is one of creativity, new possibilities and collaboration, where the strategies are rigid, prescriptive and highly structured. Here, workforce has an opportunity to inform the strategies, helping leadership more effectively tailor the strategies around collaboration and not structure.

Another example exists in the case of an organizational culture that is non-existent or splintered.  There is no hope of aligning with said strategies, because the workforce can’t work effectively together. This provides the organization an opportunity to affect culture change through training, be it related to strategy, process, safety, and/or performance.

2. Input. Your workforce and leadership are provided an opportunity to actually INPUT into the strategic process. For instance, as they learn about vision setting or goal setting, they are brought through an exercise of coming up with goals they can support within the company. This ultimately creates greater buy-in for the entire strategic process. Which, in turn, leads to bottom line results.

Training can potentially act as a bridge to help prepare or refine the culture to understand and buy into the strategy more readily. Furthermore, by integrating strategy into training, real work gets accomplished, and it gives managers the opportunity to talk to their teams after the training, to keep it alive.

At gothamCulture, we talk about culture eating strategy for breakfast. Meaning, you can have all the right strategies in place, but if you don’t have the culture to support them, your best-laid plans go nowhere or mean nothing. Leadership, strategy and culture are inextricably linked, and training may be your untapped conduit for integrating these fundamental business components and help successfully scale your growing company.

What Does A Leadership Coach Really Do?

By gothamCulture
Published at In Category Blog Tags:
executive leadership coach

Guest Article Written By Kelly Meerbott

When your board of directors suggests you bring in a leadership coach to improve on some facet of the organization, How do you react?

If you’re like most CEOs, it might be, “Coach? Why do I need a coach? What’s wrong with me?”

Well, I’m here to tell you two things:

  1. There’s nothing wrong with you. We all need feedback because that’s how we progress.
  2. Coaches, especially leadership coaches, are brought in to help launch you to the next level; to develop high potential into high performance, and high performers into superior leaders. They are there to hold you accountable to the best version of yourself; not to fix what’s broken.

Here’s what you need to know about coaching.

Coaching: A Mindset Shift

Coaching has often been portrayed as a punitive or corrective tool to be used when circumstances have turned negative. However, in progressive companies coaching is considered to be a positive, proven method for helping executives explore their current goals and ambitions and achieve new or higher objectives.

When partnered with open and willing participants, the power of executive coaching is to:

  • accentuate your skills and abilities already in existence
  • boost performance with a more positive outlook and mindset
  • help identify and deal with issues, concerns, and challenges before they become unmanageable problems – on a personal and organizational level

The coaching and mentoring process is about shifting mindsets to see the possibilities, creating a plan, and taking consistent action to realize success once objectives are identified. The best practice approach is to observe and analyze the organization from a holistic point of view. Together, we look for positive, feasible, practical, and attainable improvements.

Even Coaches Need Coaches

After an unexpected layoff in 2009 I made the best decision of my life and professional career in hiring a business coach. The experience taught me firsthand about the transformative power of coaching and professional mentoring. With a great coach I was able to spin the negative events I was projecting onto myself as something happening for me, not to me. This mindset shift in myself–from victim to owner–was most powerful distinction I learned from my coach.

Steve Chandler, success coach & best-selling author of more than 29 books, noted, “Owners have an awareness of their own freedom of choice and they love to make and keep agreements. They own their spirit and energy and have a sense of personal responsibility and self-control. Victims are victims of circumstance who navigate their days based on their shifting feelings.”

The distinction between “owner” and “victim” shifted my primal level instinct from blaming others and things around me, to taking responsibility for my choices, helping to launch me to my next level in business and life.

Good coaches will do that. They change perceptions you have of yourself. In turn, those new perceptions change how you view the world around you. Simply put: “Change your thoughts; change your life (Wayne Dyer).”

You, Loud and Clear

One of my favorite examples from my work is when I was engaged to work with a COO in a medical organization. She had 49 direct staff reports responsible for operations, medical personnel supporting doctors during procedures. The COO’s department was responsible for 80% of the company’s $20M annual revenue. The business unit had become a revolving door (attrition at 59%). Morale was terrible. The culture of the department had evolved into a morass of negativity.

During our first coaching session, the COO sat across from me with her arms crossed in a closed off stance. I asked her, “What would you like to achieve during our work together?”

COO: I’d like to get to the bottom of why so many people are quitting. I’m doing everything I can. I don’t understand it. I reach out to them often, yet I get the sense that they’re afraid of me.

Kelly: Well you do appear to be quite angry.

COO: Really? I try not to be. (begins to cry) I’m going through a very tough divorce. My spouse is a violent alcoholic.

Kelly: Did you know, the more we try to hide our emotions, the more they show?

COO: (Calming down) I can see that.

(At this point, I sit in silence allowing the COO’s emotions to flow and giving emotional space. When they are ready, I ask a question.)

Kelly: When was the last time you had one-on-one conversations with your staff?

COO: It has been so busy that it’s been about 18 months.

Kelly: And aren’t your employees bonuses and salary increases based on quarterly evaluations?

COO: Yes.

Kelly: So what could you do to achieve the outcome you want?

COO: Start scheduling evaluations?

Kelly: That’s one option. Are you open to some coaching around this?

COO: Yes.

Kelly: How do you think it would affect your team if you had one-on-one conversations with them without an agenda? Allow them to come in ask one question and then listen.

COO: No agenda?

Kelly: No agenda.

COO: I could try it. What’s the one question?

Kelly: How are you?

COO: I think my staff would be surprised and shocked.

Kelly: Good. That’s what I was hoping for.

Together, we implemented a first round of meetings. It took two weeks to complete them, but morale demonstrably improved. The COO and I co-created a plan of action to complete all the employee evaluations in 90 days, which were completed in six weeks. By the end of the second quarter, attrition dropped to 17%, and by the end of the year the team brought in $5M more in annual revenue than budgeted.

The point? Although they seem to use similar techniques, coaches are not therapists, psychiatrists, and/or consultants. Executive coaches are creative partners that hold the mentee and associates accountable to be the best versions of themselves. The result? An evolution; a mindset shift: from good to great!

kelly meerbott - leadership coachKelly A. Meerbott  is  a  respected  thought  leader,  speaker  and  Leadership  Coach  to  C-suite  executives. In her  work  with  the C-Suite & senior  leaders,  Kelly  creates  personal  strategies  and  action  plans  to  help  implement  long-term,  positive,  behavior  change  for  themselves,  their  people  &  their  organizations. Find her on LinkedIn, Twitter, and her website.

Unshackling Silicon Valley From Its Golden Handcuffs

By gothamCulture
Published at In Category Blog Tags: , ,
golden handcuffs

Silicon Valley is known for its buzzwords around corporate culture, having adopted (or been labeled with) such terms as “bro culture”, “work hard/play hard culture” and “culture of failure.” Startups that operate at breakneck speed, encouraging all-night hackathons and weekend work retreats, are often held up as shining examples for aspiring young entrepreneurs to follow on the road to success. But the reality is not quite so appealing for those who don’t fit into the strict tech mold, and who don’t buy into the assumption that the only way to succeed is to sell your soul.

Many startups unknowingly reinforce these types of behaviors as they work to keep up with the Joneses (or keep up with the Facebooks in this case). In Silicon Valley’s war for talent, benefits and perks in tech companies have reached a fever pitch, all in the spirit of encouraging employees to stay as close to the company campus for longer.

The “golden handcuffs” that tech companies use to lock down their talent—the beer in the break room, catered lunches and office yoga classes—are beginning to come under fire as tactics for these companies to attempt to squeeze extra hours (and hopefully, productivity) out of some of their most valuable resources; their people.

This is not the case for everyone, however. There are those in the industry who have been intentional about growing their companies in ways that seem to go against the crowd. One such company is npm, a venture-backed startup based in Oakland, CA with over 2.7 million developer users and several major enterprise customers including Wal-Mart, Blizzard, Docusign and Autodesk. The company eliminated catered lunches at the office in favor of company-sponsored outside lunches. Employees are encouraged to prioritize family, and discouraged from working extreme hours or weekends.

I recently had an opportunity to chat with npm’s CEO, Isaac Schlueter to learn about his personal challenges with the tech stereotypes and what he is doing to grow a successful tech startup by bucking the system. Here’s what he had to say:

CC- Tell readers a little bit about npm, what you do, and how you got started.

IS- Before npm, I worked for a handful of well-known software companies like Yahoo and saw a bunch of different approaches to managing a company’s culture over the years.

When I started npm in 2014, I wanted to make sure that we were very intentional about who we were and the way in which we would operate. Many of these values stemmed from my own personal values and, surprising to many, some of these ways of working are in direct misalignment with some of the typical tech startup stereotypes and assumptions about how to succeed.

CC- In your words, what are Silicon Valley’s “Golden Handcuffs”?

IS- Some see the typical benefits associated with tech companies as key in attracting and retaining talent. Others see them as ways to keep driving people toward productivity.

The term golden handcuffs bugs me because it holds several meanings. In one sense, it is defined purely in terms of financial compensation. At npm, we have a bonus-vesting program but we don’t want to provide that along with an expectation that people need to stay in the office for an unhealthy amount of time.

golden-handcuffsI once worked for a company (now out of business) that had catered lunches. But I rarely took part, as I prefer to get up and go outside to get lunch. It gives me a chance to take a mental break. It was against the norms of that culture, and people would often ask me if was okay (thinking that something obvious must be wrong with me to make me leave the office to take a break) whenever I left the office to get lunch. There, people would pile food on their plate and sit down to keep working. Catered lunches were supposed to help with productivity, but without taking a pause, these people tended to make worse decisions in the end.

This is a really hazardous situation with startups. There are always urgent things to deal with and you have to be able to make smart decisions about what urgent things you will prioritize and what you’ll have to live with letting slip by. The ability to think strategically is a matter of life and death and driving continuous, long hours increases the risk of making poor decisions, in my opinion.

CC- How, specifically, do you want the culture at npm to be different? And how are you and your team supporting these goals?

IS- One thing that we did to manage the pressure to work more was to establish an explicit no working on weekends or after-hours policy.

This is a clear set of guidelines about when people are expected to be working and not. Leaders have to live it and set the example for others to make it real for people. And when people do work late or over the weekend despite the policy, we give them feedback, acknowledge their efforts to go above and beyond and encourage them to take a day off the next week. How we as leaders react to behavior reinforces certain things in our company and we have to be ever mindful of that.

Second, our values play out in the day-to-day, which helps shape the culture. For example, we try not to talk over each other in meetings. We keep meetings small, and use a talking stick to help keep conversations inclusive. If more than five people are in attendance, we appoint a moderator to make sure everyone is heard.

This process of slowing down and getting all of the data helps with our decision-making quality and promotes a more grownup approach. It may take longer to make a decision up front, but I don’t want to work in a place where the person who beats their chest loudest is the only one who’s heard. It’s not good for quality decision-making.

Third, unlike many tech cultures, at npm we focus on processes and not people. What I mean by that is there’s not a lot of hero worship going on. We value our people but we focus our attention on refining our processes to help everyone shine, rather than rewarding individual efforts.

A final difference is that we don’t foster a culture where people need to drink with the boss in order to get ahead. I’m sure there are a few beers in the fridge in the break room but alcohol is not a centerpiece of our culture. We realize that there are highly experienced, professional tech workers out there who have families and active social lives outside of work and that many of these people are not interested in working in organizations where those types of behaviors are required to succeed.

We’ve been very intentional about saying that we are different in this way and, while it may prevent certain people from applying to work with us, we attract and retain those people who want what we have to offer.

CC- Why is it important to put your employees work-life balance at the forefront of your employee’s benefits?

IS- In almost any modern company, things have become so cheap that the biggest investment is usually in the people. As business owners, we often feel like we have to get the most out of them as possible. The fatal assumption most people make, however, is that working people harder and harder will yield better results. Unfortunately, more is not necessarily better. It’s counterintuitive, but in order to get the best out of your people you may want to stop driving so hard.

There are a huge variety of problems that stem from pushing these high intensity cultures. People make worse decisions, it drives a pressure to engage in less ethical behavior, etc. You’re now paying a premium for people who are giving you less than 100% in return.

CC- How has your culture at npm impacted your company’s performance?

It’s extremely difficult to measure software development performance. For example, measuring people’s performance based on the number of lines of code they produce just tells you who’s typing more; not who’s making good software.

When starting npm, I had an opportunity to be very methodical and deliberate about the culture and what we stand for. We looked at what we were and where we wanted to go, and realized that we didn’t need to rapidly spew out prototypes.

I stepped back and asked, “what kind of company do I want to work at?” I had observed in previous companies I’d worked at that better ideas were coming out of more introverted environments. Open bars and free lunches didn’t ever make me feel as good as doing great work and living a better and more fulfilling personal life outside of work.

But, the surprising thing is npm has moved faster than any other software team I’ve been a part of. It seems counterintuitive, but by having a strong foundation and clear expectations about how we will get our work done, it actually saves a ton of time in the end.

Hiring is easier here than any other job. npm has great brand recognition among developers. We have lives outside of work. There is a small, noisy minority who hates the idea, but the overwhelming majority of people in the industry are seeing the value and are very attracted to our culture. We see a high caliber of very diverse applicants applying all the time as a result. That breadth and depth of experience would be unattainable without actively supporting the work-life values that we have in our culture.

While there is certainly no shortage of deeply rooted beliefs and assumptions about how tech startups rise to glory, there also exists a subset of tech CEOs who are bucking the trends and stereotypes, intent on proving that there are still better ways to do things that yield the same or better results in terms of performance.  Time will tell as these new practices impact behavior and long-term results, but one thing is for sure: there is no silver bullet recipe that works in all situations.  My conversation with Isaac reinforced for me the critical importance of being intentional about what you stand for and how you align your ways of working with what’s most important to you as a leader.

 

This article originally appeared on Forbes