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June - 2011 - issue > In My Opinion
Building a Winning Culture in a High Growth Environment
Satbir Khanuja
Monday, June 6, 2011
Jeffrey Katzenberg, co-founder of DreamWorks, sums up the value of good company culture in a nice quote: “Our philosophy is that if you love your work, and you love coming to work, then the work will be exceptional.” According to a Bain & Company survey of senior executives at global companies, 91 percent of 1,200 executives agreed that “culture is as important as strategy for business success.”

Building an entrepreneurial and productive culture is essential to building a successful and a great company. I have been part of two high growth companies – first at Amazon and now at DataSphere Technologies, where our culture has been instrumental in driving 250 percent year over year revenue growth and an increase in staff over the same period from 35 to more than 400 people. In both instances, I have seen culture play a big role in driving the success of the companies throughout the growth cycle. It is also critically important in weathering the inevitable dark days and maximizing opportunities presented when things are going well. Many other highly successful companies such as Netflix and Zappos have similarly stressed the importance of their company culture in driving business growth.

In this article, I will share the principles you can utilize to build an amazing productive culture for your company.
* Set up company philosophy so that everyone is aligned

We have built a culture where every employee is asked to act as a CEO of their role and leverage others as resources to best service their customers. We have also established key company philosophies that guide everyone’s actions-
a) Pursue “game changing” opportunities
b) Obsess about delivering value to customers
c) Create compelling value for all team members
d) Provide a culture where the “best ideas” win
e) Work hard, have fun, make a huge impact

It is very important to choose values that everyone in the company can believe in, embrace, apply, and evangelize. Communicate core philosophies of your company to potential candidates during the recruitment process so that they can self assess if they want to be part of your company’s journey. Do a company orientation for all new employees in their first week of employment led by executives. Go over the company’s values, with lots of examples, so that everyone is crystal clear about the company’s guiding principles. It is also helpful to pick successful role model companies that you would like to emulate and share the rationale with your team. Our current role models are Amazon.com, Netflix, and Google. Drawing specific parallels between well known “great” companies and our company helps employees share the vision of where the company can go with their help. We explain that these role model companies aren’t just household names because they are lucky, they are great because they created an amazing culture of continuous innovation to deliver value to customers and employees.

* Everyone needs to play a role in building the company culture

Culture is not built by giving employees a handbook with nice phrases no on can repeat. Everyone in the company, from the CEO on down , needs to constantly apply the values in their day to day activities and explicitly highlight when these values are being used as a guiding light in decision making. To ensure the company-wide adoption of your core values, think of all the tactics you use to drive product adoption and apply similar approaches for this exercise. Tactics should include: leaders constantly reinforcing core values in contextual meetings; highlighting good and bad application of core values across the team; explicitly recognizing and rewarding good behavior; and, most importantly, ensuring that their own decision making actually and obviously lives up to these principles. For example at Amazon and now at DataSphere everything we do is guided by the impact it will create for our customers- it is part of our core principles and our company DNA. We constantly reference this principle as part of how we make we make tradeoffs and prioritization decisions. In a rapid growth environment with many new employees, you must repeat, repeat and repeat until the concept becomes ingrained. To maximize the impact, everyone in the company needs to believe in and contribute toward building the culture as opposed to relegating it to human resources.

* Enable everyone to create impact
Encourage and challenge everyone in the company to think about the ideas that can significantly benefit your customers, partners and employees. Make sure that they can talk directly to the potential implementers or have the ability to easily connect with the right decision makers and get a quick follow-up. Any friction in the process will kill the idea generation and submission process. In our company, employees can submit ideas directly to the CEO or other execs and we make sure to follow-up on the same day. Entrepreneurs like to build and you have to make sure you give them an environment that not only taps into all their creative ideas but also helps them drive impact faster. Implementation speed matters- it accelerates the overall innovation engine.

* Reinforce the core values with action
Regularly showcase examples of good ideas that came from the employees, were implemented, and created impact for customers and employees. Ideas could range from simple process improvement to major new product ideas. The key is to celebrate and share all the successes and especially those where the employees generated ideas in areas not core to their day to day responsibilities. You can use e-mail, intranet and company-wide meetings to share these successes.

Make sure that that you are proactively working on all core values and demonstrating progress. One of our core values is to work hard, have fun and create a huge impact. We schedule regular strategy sessions to figure out tactics we can deploy to create a fun environment and we constantly refine those tactics. For example, we have created budgets so that teams can develop their own regular fun activities. In addition, the HR team, with help from cross-functional teams, develops company-wide quarterly events. We take employee feedback and iterate team building activities with similar rigor that we deploy to drive new product development.
Another core value at our company is that the best ideas win and anyone can create ideas about any part of the business which will create a positive impact for our customers and employees. To enable that part of the culture we encourage people to use data, hypothesis, and logic to drive idea discussions. We also encourage employees to come up with innovative ideas and apply learning from experiments to continuously improve. Cross-functional teams can also be helpful in creating more holistic changes and are often the best way to deliver more rapid results.

Finally, invest heavily in training and mentorship and create opportunities for all employees to learn, to grow in responsibilities, to contribute and to be recognized. As a result of our collective efforts, we have created a culture that our employees love and over 40 percent of new hires come from employee referrals.

*Culture building is not one time activity but needs constant attention and iteration.
Think of building a culture as building a product that will require continuous innovation. You will have to keep refining your tactics as your business scales and you add employees in new locations. Open and regular communications regarding company principles, vision, and goals of the company and progress updates is important to keep everyone aligned and to maximize impact.

* Set key metrics to measure progress and improve continuously
It is very important to set key metrics to track progress on company culture. We use new employee referral and existing employee retention as two key metrics to measure employee satisfaction. We also conduct regular employee surveys to measure employees’ assessment of our culture, how closely we adhere to our stated principles, things that are most effective in promoting our culture, and areas for improvement. We then iterate and follow up with action to earn the right to solicit feedback in the future.

Building a winning culture requires regular and sincere effort by the entire leadership team, but it is essential to create a great company.
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