Successful entrepreneurs understand the importance of company culture
Be true to who you are. Don’t define your company’s culture by the catchphrase of the day.
So says Michael Krasman, CEO and cofounder of UrbanBound, a web-based relocation platform for companies to use for their newly hired and transferring employees.
“As a serial entrepreneur of nearly 20 years,” Michael says, “I’ve become increasingly convinced that the single greatest asset any company has is their people. In a lot of ways, companies are formed for the sole purpose of solving issues. They could be internal issues or issues for your customers but, if you have the right team on board with thoughtful, creative, intelligent and driven individuals, you will embrace each challenge and come up with brilliant, out of the box solutions over and over again. That is what really makes a great company and creates a sustainable competitive advantage.”
Authenticity wins out
“If you create a grandiose vision and mission and claim that people come first – but don’t operate that way – it is immediately obvious,” Michael tells us. “This hurts you. It’s far better to be authentic, to be honest about your culture and then align yourself from there. Otherwise, when you hire, you create a mismatch from the start.”
He cites Zappos as an example of a company that promises to WOW the customer – and then actually follows through. “If you have a problem and need to talk with someone on the line,” he says, “they are trained and managed to help you feel incredible about Zappo and then tell your friends about your experience. Had Zappo promised an outstanding experience and then trained its employees to be ultra-efficient and get you off the phone as soon as possible, it ultimately wouldn’t work.”
Michael agrees that identifying opposites – determining what you do NOT want in your company culture – can help you determine what you do value. “Then you have to determine the grounds for firing an employee or a customer. If someone doesn’t honor a core value, how do you react? If you don’t honor that value and follow through, is it really a value? The hardest thing is being okay with something that doesn’t necessarily sound right. If, for example, you’re more flexible about what level of honesty is acceptable, then live it out that way.”
Hiring for company culture
Once you’ve determined your company’s true culture, how do you hire?
“Establish consistent hiring processes,” Michael says, “that you follow every single time. Identify people’s alignment with your core values to set the standard for whom to bring in. Be deliberate. Do NOT ‘wing it.’ Ask behavioral questions to determine if someone would be accountable for your values, and differentiate between authentic answers and lip service.”
He also shares one of the biggest hiring challenges. “You have a candidate,” he says, “who can clearly do the job with a track record of success. His skill set, background and behavioral characteristics show he can hit the ball out of the park. But. He is not a good fit, culturally, and will clash with other personalities. It’s hard to make the decision to pass on this candidate but, if you really are the guardian of your culture, be slow to hire, quick to fire, and learn to say no. An individual can be a rock star but, if he subtracts from the efficacy of the team, it becomes a negative gain.”
As your company grows, he adds, you will start to notice subtle differences between departments. So, what works for sales might not work for engineering, and it’s hard to scale with absolute standards. “Then,” he says, “you need to determine what values MUST remain core and which ones can be adjusted by department.”
Here is one more hiring tip: “Attract talent who love the culture and feel comfortable with the others within a week. It’s healthy when you see people working harder because they feel safe in the environment and appreciate the positive team and family spirit. And, the owner must personally embody the culture and have an open door. No questions are wrong, no job is too big for the owner, and no job is too small.”
Once you find the right employee, you want to keep him or her happy. “However,” Michael says, “you can’t address every single accommodation request because they will be so different. You need to be very clear, therefore, during the interview process to share how you operate. If it’s a mismatch, identify it early. Don’t create a bad situation out of the gate.”
If telecommuting appeals to some employees, he says, be intentional about keeping remote staff engaged. “Have them participate in the weekly company huddle, watching the screen. Use tools to keep them easily accessible. And, constantly listen to team needs as the company evolves. What works with five employees may not work once you reach fifty – and that’s okay because modifying processes is normal when building a business. Also put in place mechanisms for everyone to provide thoughtful feedback, both publicly and anonymously. If you decide to take action on an idea, create a mini-task-force to implement and, if you can’t, honestly share why not.”
“The number one cause of employee dissatisfaction,” Michael says, “comes from barriers in communication flow, of not being heard, when people who can effect change aren’t really listening. This is even more important than compensation. People leave a company, most often, because of their managers. If the manager makes it difficult for you to do your job, you will seek another environment.”
If you notice a lower performing person, Michael suggests the direct approach, asking him or her what’s going on and how it can be fixed. “After an employee has worked for us for 90 days,” he says, “I go to lunch with that person to ask how the acclimation process is going, and how tools and resources are working. Any obstacles? I let that person know we’re always here to help solve problems. Listen to responses and constantly adjust.”
Sometimes, Michael acknowledges, employees would approach a challenge in a different way than he would. “So I facilitate open dialogue and let the team get to the right answer. Each person usually thinks his or her idea is best, which is only natural, so you need to allow for good healthy debate as people with diverse sets of skills and a variety of viewpoints and solutions try to solve a challenge. The truth often lies in the middle so you need to be willing to articulate thoughts but not be married to the answer. You need to build a culture where you can try and fail, fail quickly and learn. If you don’t learn, then you’re doing it wrong. Then you attack the issue again with new information, trusting the others on your team and knowing that the total is greater than the sum of the parts.”
Every company faces challenges, he points out, and needs to solve problems all day long, whether they are problems with the market, with a product or service – or simply internal growing pains. “With the right people in the room,” he adds, “you’ll arrive at better solutions, faster, with greater consistency. With people considered number one in your culture, the rest will get sorted out.”
More about Michael
Michael is a serial entrepreneur who has co-founded five high growth businesses over his fifteen-year career. Michael sits on the board of four of these companies: UrbanBound, Hireology, Homescout Realty and Humatal. Michael’s first business, Versity.com, grew rapidly over a 3-year period and was successfully sold in 2000. During his time with Versity, Michael held several roles which included CFO, VP of product development and board member. Prior to these ventures, Michael was a financial analyst at the investment bank Donaldson, Lufkin and Jenrette in New York. He graduated with high honors from the University of Michigan’s Ross School of Business with a BA of Business Administration. Michael also served as president of the Entrepreneur’s Organization, Chicago Chapter, a global organization with more than 10,000 members worldwide.
Thanks, Michael, for your expertise! Find out what other entrepreneurs are saying about how to be successful. Looking for the company that helps you to boost cash flow management through invoice factoring – with no hidden fees? Apply online now.