"Culture" may be the most overused buzzword in the business world.
Everybody is talking about it, but barely anyone knows what it actually means. To most entrepreneurs, their company’s culture is a set of fluffy feel good words or values. To most people actually working in the business, these words mean absolutely nothing. It’s very easy to create a set of words to describe your organization. After all, Enron used the words "Honesty" and "Integrity" to describe their values and culture.
Great company culture doesn't come from buzzwords or an office full of toys. The true culture of any business emanates from who they hire, fire and promote. Actions speak louder than words, so it’s very important to ensure that you are getting these things right.
It’s relatively easy for an early stage startup or small business to have a good company culture. But scaling that to hundreds or even thousands of employees is notoriously difficult. Here’s how we do it.
Because every job we advertise gets hundreds of applicants, it’s important for us to be able to filter the applicants effectively in a way that ensures someone is the right fit for our organization. We filter for email addresses—if you have your own domain or a @gmail.com account then you make it through to the next stage. If you have a @hotmail.com account then you’re out. Someone with a gmail.com account or their own domain is likely more tech savvy. We immediately know that on one level, they’re a perfect fit for our business. We also look at what browser you were using when you submitted your application—using Internet Explorer won’t increase your chances of getting a job.
If someone makes it through to the interview stage, we tell them that there will never be any formal training at Kogan. Our organization has a culture of "Google everything and question everything". Google (not a training course) is our main tool for answering and solving any problem. In today's world, by the time you have put together a formal course for something, it’s old information. Their reaction to being told about this policy tells us a lot about whether we should hire them or not.
The wrong people (or the right people in the wrong jobs) can be a huge burden on your business. They hold up projects, set the wrong example, and like a disease can spread very quickly if not addressed and rectified.
It’s important to ensure that you have processes that can promptly identify any staff that are underperforming and try work with them to improve their performance.
If, after significant effort, you don’t see an improvement in their performance and attitude, it’s time for them to go. It is also important to talk to your team members to find out exactly what sort of roles they enjoy the most. Ultimately, people will be best at what they enjoy. We have resolved several HR issues at Kogan and improved our performance simply by moving staff between departments to roles that better suit their passion.
Promoting and rewarding your top performers is probably the most important part of your culture. It is leading by example. It is showing your entire organization what the real values are and advertises who the pillars that uphold them are.
At Kogan, we run a meritocracy. This means that everyone is rewarded purely on the value they add to the business. We don’t care how old you are, what university degree you have, how long you have been at the company, or any irrelevant factors like that. All we care about is the work that you are currently doing and the value that it’s adding.
Our staff can submit a "business case" for a pay raise as often as they want. This business case contains their achievements, the value it’s added, areas where they think they excel and areas where they need improvement. We also encourage them to attach other current active job ads that they think they have the skills to perform.
This causes individuals on our team to be intraprenuers, knowing they will be rewarded based purely on how much they contribute. We don’t believe in "once a year" raises on a certain date – this is not a good incentive structure because it means that staff have no incentive to perform at the top of their game immediately after a payrise or promotion.
The meritocracy at Kogan has had tremendous results. We have an incredible team that achieves incredible things. A few years ago, we had a 19-year-old who had received six pay raises in six months and moved from a customer service agent to senior management team.
Culture is crucial to every organization. It’s what defines who you are and what mission you set out to achieve as a team. It defines the values that you as a team possess and your rules for engagement in achieving your goals. It brings the team closer together.
But don’t let all the buzzwords associated with you "culture" make you lose sight of what it actually means. The real "culture" of any organization is who you hire, fire and promote.
[Image: Flickr user S. H.]