We've fallen so far as a business community that we now need to remind everyone that simple, common sense fundamentals of business are a focus of how we operate.

Introduction: We talk to thousands of companies and many of them have come up with some interesting values to describe their culture.  Some values, however, aren't worth spending the $199.99 to get the die-cast cutout to hang on the lobby wall. 

Customer Focused

This one is a head scratcher.  It seems so obvious, doesn't it?  After all, a business is only in business because their customers continue to purchase.  

The only companies who get by without giving a rip about the customer are those who have established, at a minimum, regional monopolies (we're looking at you cable companies, but RoundPegg can help you solve those problems sometime between the hours of 8am and noon).  

What happened along the way that caused your company to point out that they should do what's right by the customer?  Sure, there may be times when you are forced to make short-term decisions between shareholders and customers and this value can provide the deciding vote (though I'd bet it's still a coin flip). 

The fact that 19 of the Fortune50 have felt the need to highlight their need to be customer-centric is a condemnation of business practices over the past two decades.  We've fallen so far as a business community that we now need to remind everyone that simple, common sense fundamentals of business are a focus of how we operate.

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To craft appropriate culture values they must be descriptive of how:

• decisions are made 
  
• work gets accomplished
• employees interact with one another

Intelligent minds coming out of college will have the option to make 10% more to work for an established company with horrible glass door reviews, or take the negligible pay cut to work for a company that values their employees and sets them up for success. 10% in extra in pay will never be worth happiness to these recent grads.

As a counterpoint to Elise's blog from the Millennial perspective earlier this week, RoundPegg's Blake Redson offers his view of the importance of company's changing the way they do business in response.

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Your company might be losing a silent battle and you’re the only hope.

The world is changing.  People have been saying that, or something like it, for centuries.  In reality, society is ever evolving and this evolution can be applied to all aspects of life- education, technology and business to name a few.

The change in business is going to be an interesting one and education and technology are playing a major role. 

When I went through the teacher education program at New Mexico State University, we were told to segment our lesson plans because if you lectured for more than 7-10 minutes, you were going to lose your audience.  This begs the question, has TV and technology changed the hard wiring and essentially squashed patience? 

I remember sitting through hour-long history lessons as a middle schooler that seemed to go on for days.  Back then, patience was a virtue but more importantly, it was expected.  But I’ve evolved over the years too.  Due to my always connected and always plugged in mindset, leaving the house without my cell phone causes a minor panic attack.

Because of the visual stimulation provided by media, iPhones, iPads and soon to be iWatches (possibly?), younger generations are different.  These millennial’s, and soon the Gen Z (some have suggested the moniker Generation@) are well connected.  They are social, they have high aspirations and many fear that these expectations in the workplace are even too high. *

Why put in your dues when you can demand to be VP in a year?

Companies need to adapt.  Many forward thinking companies are already doing so and preparing for this new crop of employees.  However, inevitably, many companies are going to be left out in two ways. 

First, many companies will fail to adapt.  The hierarchical levels with minimal transparency and collaboration that have served the organization well for 50 years will fail to leverage Millennial talent and the way they prefer to work.  Their out-going, can-do-anything drive will be stifled, morale will suffer, and the organization will spiral.

Second, companies that don’t adapt will lose top talent plain and simple.  Companies with an understanding of their culture and how to leverage it to get the best out of their employees will thrive.  Intelligent minds coming out of college will have the option to make 10% more to work for an established company with horrible glass door reviews, or take the negligible pay cut to work for a company that values their employees and sets them up for success.  10% in extra in pay will never be worth happiness to these recent grads.

This is all happening now.  I’m not the first to write something like this.  Talent is changing and culture is becoming more important than ever.  If your company is “set in it’s ways,” “dyed in the wool,” or an “old dog that doesn’t learn new tricks,” (or any other old timey saying that young talent has never heard) then it’s more important than ever to understand your culture… not only that, but understand your sub cultures, understand what motivates your employees, and understand that you can get more from people by allowing them to work in a way that best suits them.

“The times, they are a changing,” some old guy once said. 

Do something now and adapt.  Or don’t and deal with the aftermath as stock prices plummet and competitors that weren’t even on the radar somehow dominate your market.  It’s up to you.  You’re the only hope.

*Alsop, Ron (2008-10-21). "The Trophy Kids Go to Work". The Wall Street Journal. Retrieved 2008-10-24.

Tracking the expectations, behaviors, attitudes, and motivations (Culture!) of each of the four clearly defined generations is a pretty simple task, but coming up with a strategy to “bridge the gap” in order to work with (or even for) each generation? That's the tricky part.

Company culture is a relatively young concept. This is not to say that it hasn’t always existed, because in one way or another, it has. 

A company’s collection of core values, personal motivations, and central beliefs have long acted as a kind of substratum from which daily interactions and issues arise, driving (or damning) performance and overall success in the workplace. 

In spite of this, it is true that until recently, corporate culture hasn’t been given a name, a shape, or a well-defined purpose. This is especially clear when we observe the effects of culture through a generational lens.

There are certain hallmarks of each generation that have been used to define the ways in which its members function in the workplace. 

The Traditionalist Generation is known to respect authority and respond best to a commanding leadership style. Baby Boomers are largely workaholics, thrive on competition, and are prone to question the authority of those above them. Gen X’ers are more cautious about their career paths, tend to be independent and really value their freedom in the workplace. Gen Y’ers are known for their technological proficiency, enthusiasm and high expectations for their employers. 

Bear in mind that these are broad generalizations of how each generation is viewed. Tracking the expectations, behaviors, attitudes, and motivations (Culture!) of each of the four clearly defined generations is a pretty simple task, but coming up with a strategy to “bridge the gap” in order to work with (or even for) each generation? 

That’s the tricky part. 

One of the things that sets RoundPegg apart is that we recognize that all people are different, and each generation has all types of people. So, what makes managing generational differences easier is by finding people, regardless of generation, that have the same culture values. 

Lately, there has been quite a bit of discourse about Gen Y’ers in particular, who (similar to the concept of company culture) are the youngest of their cohorts and the most recent generation to enter the professional arena. 

In fact, according to a 2010 report by Knoll Workplace Research, by the end of the decade, the workforce demographic in the U.S. will flip from roughly 50% baby boomers and 25% Generation Y workers to 25% baby boomers and 50% Generation Y workers. 

As these bright and recently post-baby fat faces begin to occupy desks and boardrooms around the globe, a lot of employers are grasping at ways to harness the unique energy and perspective that Gen Y’ers bring to the table. 

Now, I have a confession to make. I myself am a Gen Y’er. I graduated from the University of Colorado at Boulder with a degree in Psychology and Philosophy this past December, and I have officially made my grand entrance into the workforce at 22 years old. According to the stereotype, I am self-involved, overly praised, optimistic, thrive on volunteerism, will work hard as long as I believe in or understand the task, and suffer from a sense of entitlement, narcissism and rejection of social conventions. 

Am I the only one thinking “ouch?” 

Some of these generational characteristics may be true to some degree, but just like any employee from any age bracket, there are simply certain things I expect out of my workplace experience. Stemming from my own personal thoughts and what I have heard from my fellow Gen Y’ers who are beginning their ascent onto the corporate ladder, I see a pattern in the hallmarks that dictate how we’re wired in the office.

Stay tuned for the continuation of this Culture Through the Ages series.

No matter what your turnover cost is, no one wants to hire a Zombie or deal with high turnover rates. So pay more attention to culture fit and make sure the right types of people are joining your team.

(Mark Lucier is RoundPegg's Director of Culture Analytics & Customer Engagement)

I recently came across an entertaining infographic that one of our beloved customers, Vitamin T, published last year. Aside from digging the analogy of the Zombie associated animations, it reminded me of a previous experience I had in working for one of these creatures. 

Now as a member of the RoundPegg team, my mission is to help companies avoid making that mistake in hiring their own version of the Vitamin T Zombie by providing recruiters and hiring managers with the necessary toolset to start gauging how an individual will fit with a company, team and manager’s preferred culture environments.

We are learning more about the importance of hiring good fits at RoundPegg as we work with our clients to create case studies highlighting their human capital findings and successes. For example, our most recent case study demonstrated that employees who are good fits with their managers are 2X less likely to turnover. 

And as the Vitamin T article pointed out, turnover has serious implications to your company’s bottom line - Vitamin T quoted some conservative estimates in their article. At RoundPegg we believe the cost of turnover and all associated expenses to be more around 150% of an employees annual salary – this number is a relatively common industry standard, as reported in William G. Bliss’ article, The Cost of Employee Turnover. Bliss actually outlines the expenses in an easy to follow worksheet if you want to get an exact turnover cost to use in your own calculations.

No matter what your turnover cost is, no one wants to hire a Zombie or deal with high turnover rates. So pay more attention to culture fit and make sure the right types of people are joining your team. Who knows, you might even save your company millions of dollars along the way.

The prevalence of this value throughout corporate America is disappointing. 27 of the Fortune50 claim integrity as a core value.

Introduction: We talk to thousands of companies and many of them have come up with some interesting values to describe their culture.  Some values, however, aren't worth spending the $199.99 to get the die-cast cutout to hang on the lobby wall.  Most of the values in this series are desired outcomes rather than explanatory values of how those outcomes are achieved...a far more useful descriptor.  

Integrity

It's so easy to get everyone to agree that integrity needs to be a cultural value.  At the end of the second day of the executive offsite everyone is tired and ready to get home to their family.  Integrity is the lowest common denominator in the values chain. 

The prevalence of this value throughout corporate America is disappointing.  27 of the Fortune50 claim integrity as a core value.  

Yet it is a critical part of being in a repeated business.  If you don't have it you won't be in business for long.  

So why the need to call it out?  Do executives not trust their employees enough to act with it?  Have they hired so many folks without it that they need to dictate it?

There is nothing wrong with aspirational values, but they need to be meaningful and describe how works get done inside of your four walls...not at 52% of all the other corporations as well.

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Keys to crafting appropriate culture values.  They must be descriptive of how:

• decisions are made 
• work gets accomplished
• employees interact with one another

NPS in the form of employment is typically done in the form of, 'would you recommend a friend to work here?' Simple, but very misguided.

Net Promoter Scores (NPS) work great for customers where there is no guarantee for repeated encounters.  Customers can walk away and have a plethora of alternatives literally at their fingertips.  

NPS in the form of employment is typically done in the form of, 'would you recommend a friend to work here?'  Simple, but very misguided.  This is not a measure of employee satisfaction, employee happiness and is a far cry from determining whether your culture is palatable.  

1. Follow the money. 

Companies often offer bonuses if a new hire was recommended by an employee.  Would you recommend a friend work at a company for $5,000?  The bias this induces is astounding.

2. It's a personal indictment.

What does admitting that you wouldn't subject your friends to the company say about you?  You're still there.  You get up every morning and make the decision to go back to the office.  Admitting you wouldn't want a friend to work there means you're not strong enough to make the decision to leave yourself.  It's tough for even the most confident among us to admit that.  

3. Misery loves company.

Wouldn't having a friend in a company you hate make your life more tolerable?  You could commiserate about the ineptitudes and incompetencies.  Your daily life would be marginally improved and that's what you were hoping for in the first place.  

NPS is an easy out, but one not worth taking.  Garbage in, garbage out.

Instead, focus on aligning your culture.  When culture is aligned people are far more engaged, far more successful and far more likely to recommend a friend work with you.

Our own Dr. Natalie Baumgartner shares her insight on company culture from her unique perspective as a psychologist on Tech Cocktail

In this video, Natalie shares:

• What the critical goals of a company’s culture are
• When the best time is to focus on culture
• What really determines the true culture of an organization

The change management industry has long defined culture alignment as aligning your culture with your mission, strategy and goals (MSGs).

The change management industry has long defined culture alignment as aligning your culture with your mission, strategy and goals (MSGs).

That is immensely important. But we’re doing corporate America (and the rest of the world) a destructive and costly disservice because that laser focus on business processes as the root of change has led to a shameful 70% failure rate.

The reason is because the viewpoint is incomplete and, while well-meaning, relies on an out-dated model of human behavior that assumes people will do what we tell them to do because ‘we are the leaders of this company’ and if we just properly align sticks and carrots we can lead them to water.

Focusing on the MSGs attempts to change behaviors by changing people via the environment rather than actually changing the culture.

No matter where you sit in the nature/nurture debate most, as well as mountains of psychological research, would agree that after your third, fourth of fifth decade on the planet you are pretty well set in who you are.

There is (almost) nothing I can tell you that will change your behavior for the long-term.

No workshop, no team building exercise and no turbo-charged, uber-dynamic silver bullet will change your culture. Culture change is a process that isn’t accomplished at an executive off-site or over a six-month consulting engagement.

It’s hard and takes dedication.

That’s the bad news.

The good news is that making some tweaks to the existing process by incorporating other disciplines, such as psychology and organizational design, ahead of the work around MSGs can significantly increase your odds of success.

It is an on-going process that isn’t ‘solved’ in time for your next quarterly business review. But, rather, it should be a component of every one.

Culture change occurs when a company undertakes the long process of understanding who they are and making systemic efforts to bring in people who fit the desired culture, manage out those who do not and consistently reward the desired values.

The process must start by understanding what drives your incumbent employees today. This upfront research allows you to understand the reasons change may stall, how quickly you can push certain changes in the culture and where the sub-cultures are that already embody the desired change.

1. Understand the values of your incumbent employees
2. If that’s not what you want, tweak a couple but DO NOT throw out everything (any change is hard, wholesale substitutions are almost impossible)
3. Create processes around hiring, developing and rewarding those values
4. Align the MSGs to ensure business process fits with how you desire work to get accomplished, what you want rewarded and how you want teams to interact
5. Internally ‘brand’ your culture

Focusing on the MSGs is vital. But you can’t start on #4 just as you can’t stop after #2.

There is an art and a science to culture change. But no matter who you are or how great your ‘new’ MSGs, you are not going to be able to turn that block of clay into an impressionist oil painting. Employ some science to understand the medium with which you’re working.

A lot of money, effort and nice wine have gone into the values on your lobby wall.

If your company is like most, they are the output of an executive off-site that focused around answering the thorny corporate existential questions like, Who are we? What’s our mission? Our BHAG?

But this methodology is flawed on many levels.

First, we’re asking a select group of people to determine what the rest of the company should believe.

This is the reason so many culture initiatives fail. The audacity to think that coming down from that mountain-top off-site with a couple of stone tablets and decreeing a new set of values is, at best, ignorant. If I walk into your office and tell you that you now believe you prefer to work autonomously rather than collaboratively you’d agree. After all, you don’t want to be fired. But the odds you actually modify your behavior or perform up to your prior level can be measured somewhere to the right of a decimal point.

Second, everyone is susceptible to their own bias. 

They’re human, after all. Everyone wants the culture to be molded in the vision of their own value systems. One person feels it’s necessary to act as teams. Another believes acting like individuals fosters healthy competition.

We all see the world differently and will argue for our own values.

Not only is this exhausting, but it breaks down the will of the executives who are then forced to find the most vanilla values possible.

Third, the values executives select are so vague they are meaningless. 

Let me guess, you value integrity. Would you really be in business if you didn’t?

Everyone goes into the off-site with the best of intentions. But after a few hours everyone is exhausted and just wants to get home to their families. What words can everyone agree upon? The lowest common denominators.

Who can disagree with integrity? Agreement isn’t a sign that that value dictates the interaction between your employees; just that you at least have the social graces to likely avoid being behind bars (Enron execs excluded).

The purpose of this post isn’t to berate your values, but to get you to recognize that the work you did together is a sunk cost. Let it go because it’s not going to drive your success.

Instead, listen. Understand from everyone what their values are. Understand how work gets done, how decisions are made and what the communication norms are within and between teams. That is your culture.

And while it may not be what you want, you at least know what you have. You know how far you have to go.

It’s okay not to want what you have, but know that a new set of values aren’t going to change anything unless there is an on-going, methodical process to pull all those levers that change culture – hiring, firing, development and rewarding.

Also know your odds of succeeding skyrocket when you’re tweaking what you already have rather than throwing out the entire thing.

Cover letters are usually terrible. They’re focused on what the applicant wants to get out of a job and restate the same skills and abilities that are prevalent in the resume. Don’t focus on yourself and your needs. Focus on the hiring company’s needs and what you can contribute from a work style perspective. Show you know yourself and the soft skills you bring.

Please indulge this quick and obviously biased post. Moments like these only happen for the first time once.

When I was in graduate school I had the chance to hear Pete Slosberg, the founder of Pete’s Wicked Ale, speak. He said he knew he’d created something that made an impact (as much as beer can) when he was walking down the street and stepped on one of his own bottle caps.

We just stepped on our first bottle cap.

The cover letter above is a great example of how you can highlight what you can bring to the job aside from your previous accomplishments.

Best of all, the applicant got the job.

304,606.

That'€™s the number of job postings today on Simply Hired that are seeking people with a "passion"€™ for (your business here).

Stop it.  This is insane.

The only people making money on passion are the book publishers behind this quaint notion that all you have to do as a hiring manager or job seeker is to ‘find your passion’ and the money will follow.

You are hiring people to do a job.  Rarely does someone's passion for something translate into the workplace once they are dog-piled by all the bureaucracy, interpersonal dynamics and job minutia.

People have passion for things at a macro level but are typically required to work in the weeds doing a job that could very easily be in any another industry.

One of the top posts linked above is seeking a web developer who is passionate about music.  The job is programming, not creating music or identifying the next great act.  How often is that particular job going to really touch actual music?  She may find a new band this weekend, but will that make her any better at her job?  Will she be any more excited to solve the bugs following the last release?

Asking for people who are passionate about an industry is sheer laziness.

What you really desire is someone who is going to be engaged.  You want someone who is enjoys their role and seeks to make a difference every day.

But instead of creating the work environment for them to do so you place the onus on the job seeker and give yourself an excuse if they don'€™t succeed.  "€Oh, Bob was fired because he just wasn'€™t as passionate as we are about waste management."

Ugh.

While this isn'€™t a complete answer, one of the biggest drivers of engagement is the people around us.  It's imperative you know what makes the team tick so you can find someone with similar values.  Values are vital because it creates a strong foundation upon which we all implicitly understand one another.  Disagreements don'€™t become personal attacks and off-handed comments aren't politically motivated.

When we enjoy the people around us we are more likely to be suddenly passionate about our work.

"Passion"€™ is a miraculous by-product of being a great fit with our work environment.  That includes the job requirements, the team, the manager and the culture.  Work on aligning your people around those things and the level of employee engagement will increase.

And most of the time that’s a good thing, especially in our personal lives.

But we spend a majority of our waking hours at work where we are constantly being evaluated, where we rarely know where we stand and we have a constant pressure to perform. This perfect storm means we use the Golden Rule as a shortcut for behavior and it can play out in some rather negative ways.

A Real-Life Example

Quantifying your company culture will reveal differences between all sorts of groups. One slice of a RoundPegg culture analysis is below and compares the executive team and the rest of the organization.

What you’re looking at are the most important values of the Executive team in blue on the far left and the least important values to them on the far right. The rest of the organization (roughly 1,500 people) is overlaid on top in yellow.

The problem with the Golden Rule is that we’re all different.

It’s only human nature that we default to our own value system and universally apply them to others, especially when under the gun.

In this case the executives prefer to make quick decisions, take risk and are far more comfortable with uncertainty.

Given that that is not how their reports are wired (broadly speaking), there is a lot of room for frustration for both parties. The reports will feel like they are being held to unreasonable standards because they are expected to perform (see difference in ‘high performance expectations’) with little information (see ‘being quick to take advantages of opportunities,’ ‘decisiveness,’ ‘risk taking,’ etc.)

When people feel the expectations placed upon them are unreasonable they either decide to leave or start bad-mouthing the leadership and environment. The first is costly and the second is poisonous.

And therein lies the reason we, as business leaders, need to work to not just understand our company culture and the various sub-cultures but quantify it and ensure we’re constantly working toward the goal of cultural alignment. When everyone shares the same value foundation we can all default to how we are wired and the opportunity for interpersonal conflict is minimal.

Aligning company culture means we all spend more time focusing on taking down our competitors externally rather than our ‘adversaries’ internally.

A lot has been written in the last few days about culture, strategy and which eats which for lunch. The frustrating answer everyone comes back to is that having both is ideal. Of course it is. But the latest riffs miss the point entirely.

The quote by Dick Clark, the former CEO of Merck, “culture eats strategy for lunch,” (a paraphrase of Peter Drucker, who was apparently more of a breakfast man) wasn’t meant to take sides so much as it was to highlight that the amount of time business executives pay to each is way out of proportion based on the contribution of each to an organizations success.

This is still the case.

And thus these recent articles do more harm than good. Particularly the Fast Company post. Posing weak strawmen to ‘prove’ that it’s possible to be great without having a good culture while completely misunderstanding the causal effects between the two sets the importance of culture back several steps.

The trappings these types of articles fall into are:

• Not understanding where ‘good strategy’ comes from. Good strategy isn’t the result of an executive team going on a retreat and having a flash of collective brilliance. It’s an iterative process that involves highly engaged employees thinking about how to win the future while still trying to get all the shit that’s piled up on their desk accomplished today. Being engaged is having ‘good morale’ which matters because…
• Misunderstanding the causal relationship between culture and strategy. Those engaged employees are largely engaged because they are well-aligned with the culture. Simply, the things they value are the things that motivate them which also happens to be the things the company rewards.  That creates that virtuous feedback cycle that begets more time and effort from each of your employees. It’s during those extra hours where the clear-headed thinking often arises. If the culture is bad (defined as misaligned) what is the likelihood a great strategy is created when the employees don’t care and loath coming into work?
• Assuming there is a ‘right’ culture. Books by ‘colorful’ CEOs are enjoyable to read and they all tout the quirky things they do to treat employees with kid gloves. Because of this there is a tendency to lump culture into one of some squishy, feel-good buckets. This only serves to reinforce its lack of importance in the eyes of ‘hard-nosed business executives’ who aren’t naturally inclined to focus on aligning their culture. But a good culture isn’t one that provides quirky benefits, but one that is well-aligned and everyone knows what is expected, what is rewarded and fits how they are wired.
• Failing to differentiate between business models. The strawman created by viewing the cultures of WalMart, McDonald’s and FoxConn (let’s just call this manufacturing company X and acknowledge that human rights abuses aren’t a respectable part of any culture) as bad fails to account for how well aligned their cultures are to the demands of the business. These are companies that require precision and a vast majority of the workforce performs routinized tasks.  For the line employee at each they provide value by consistently and reliably performing the same tasks. Having ‘good morale’ is less important (corporate employees notwithstanding) because they are being rewarded for performing quickly and not making mistakes. These workers are not rewarded for creating great strategy.

These authors do a giant disservice to the corporate world by writing pithy blog posts simply to attract attention to sell their misguided books.

It doesn’t matter what kind of culture you have, but you want everyone swimming in the same direction so your company can eat those competitive fish.

So rather than focusing on culture vs. strategy lets focus on how we can put solid metrics around your culture so your employees engage more frequently in order to think up and deliver upon that great strategy that is floating around out there somewhere. It’s not either/or, but culture deserves more attention than it receives.

Culture fit is on fire. If asked, most of us who'€™ve ever held a job would agree that fitting in with a company's culture goes a long way toward predicting whether we stay - and thrive -€“ within that organization.

And yet the business world has historically paid very little attention to culture intelligence and culture fit.

Until now.

After decades of quiet on the culture front, people are talking about culture fit, writing about it, speaking about it, studying it, and measuring it. In just the past few days alone, ERE – a leading international talent management organization – has published articles on both measuring and hiring for culture fit, a Forbes article considered the ramifications of not “fitting in” at the office, the Financial Post weighed in on the impact of office culture clash, and the Enviable Work Place examined Zappos’ commitment to a culture focused on happiness.

And the list goes on.

As individual knowledge workers, most of us have felt the impact of culture fit, for better or worse – and companies measure that same impact at the bottom line every single day.

Culture fit matters – and it is on fire.

Last week P&G’s culture cost them $16.5 BILLION over the next four years if the price target of the UBS analyst is to be believed. According to the analyst, “Procter & Gamble’s culture has limited the company’s ability to meaningfully change how it does business…”

What’s interesting here isn’t whether P&G has the ‘right’ culture to succeed. Their existing culture has created the 10th to 16th (depending on the day) most valuable company in the world based on market cap, meaning they are doing a lot of things right. This is merely a small bump in their century-long road.

The interesting part is that Wall Street, the epicenter of emotionless objectivity is now extolling that company culture, that pesky, human-driven intangible, makes a significant difference to the bottom line (by approximately 10.4782%).

In 1984, brand valuations started calculating how much a company is worth in the hearts of consumers. And today we’re all starting to wake up to the importance of calculating the value of a brand in the hearts of the employees. Wall Street needs to find ways to identify value before other investors and what is more logical than understanding how aligned the people who actually do the work are to the organization’s goals?

Next up? We will start seeing more and more efforts to crack the value of a culture in pricing and performance beyond the simple feel-good platitudes after a significant merger.

So if you’re running a company or responsible for carrying out the culture values etched on your lobby wall it’s time to start quantifying your company culture as a means to stay ahead of (or catch) your competitors. Wall Street is watching.

“We only hire ‘A’ players.”
“Past performance predicts future performance.”

We use all sorts of shortcuts when hiring people. They sound good and make us feel like we're being very discerning.

But are we really doing a great job?

Before launching into why we need to update our thinking on past performance, let'€™s start by acknowledging that if someone has been successful in the past that's a great indicator that they can be again.  By all means, a positive sign.

But we shouldn'€™t exclude people who haven'€™t been €˜"A"€™ players, "€˜rockstars"€˜ or "€™1-percenters".

Here are some fallacies behind the "past performance"€™ mindset:

1.  Situational performance

2.  Team effects

3.  Opportunity

Performance is situational.

Most of us have worked with people we couldn'€™t stand.  If they were our boss then it made coming in to work and doing great work incredibly difficult.  We had to shift how we thought, how we operated and how we spoke just to make sure that we sort of "fit in."

All that takes energy that could be better applied to completing our projects.  And it does little to motivate us to think about our job outside of the office.  We become less engaged and while we’ll still capable of doing a good job on our projects we'€™re not going to shine like the person who goes the extra mile and dedicates "off-hours"€™ thinking to solving problems out of their realm.

When we aren'€™t ideally suited for the environment, success will be far more difficult to attain.

Imagine asking Tom Brady (the not so swift-footed quarterback for the New England Patriots) to run a new style of offense that requires him to run the option (less throwing, more running).  He may do alright but he'€™s not going to be the top-caliber performer he is today.  How well someone fits "the system"€™ is a leading predictor of success.

Team effects.

Work today is highly interconnected. Everyone of us has to rely on colleagues in order to get things accomplished.  It takes a village.  Rare is the project that gets hammered out without the contributions, feedback and improvements from others.

Which brings us back to the question of how much success should we attribute to a single person?

Using the Tom Brady analogy again, how much of his success should be attributed to his offensive line? An extra second to throw the ball is an eternity and can turn an average quarterback into a star.  How much to his wide receivers who know how to read the defense to break off a route sooner? To the coach who designed the system?  You get the idea.

Opportunity.

On the macro level, most people change jobs every 3.5 years which means that unless one is 20 years into their career it'€™s very possible a candidate hasn't found the right situation where they can be most successful.

It's like saying someone who has had three or four relationships in their life will never get married because they haven'€™t been successful in a relationship before.

On the micro level, politics often play a large role in who gets the plum assignments.  Being successful in the professional world requires we have the opportunity to do something impactful that is in our ability wheelhouse.  Capable people are often passed over for people who are more adept at playing the political game.  Are those the ones you really want to hire?

So don't ignore past performance, but don’t put all your eggs in that basket either.  Ignoring whether someone is a strong fit to your culture is the first step to making a bad hire.  Even if all of your hires have been overwhelmingly successful in the past, if they don'€™t like how you operate and what your company rewards they aren'€™t going to want to put their best foot forward.

At RoundPegg, we quantify the impact of culture in a number of ways.

[Disclosure: Zynga is a RoundPegg customer.]

At RoundPegg, we quantify the impact of culture in a number of ways.

There is the hard cost of turnover (RoundPegg has saved companies well into the 7-figures by aligning culture and reducing turnover), the decrease in performance by having to conform to the values of others and the long-term benefits of having everyone pulling in the same direction (Jim Collins’ research showed companies with ‘strong, well-aligned cultures were 6x more successful’).

Opportunity cost is ever-present, but we never lean on it because it’s so squishy.

Yesterdays’s article in the NY Times about Zynga’s hard-diving culture however starts to put some real figures to the opportunity cost. At least two deals, totaling over $3Bn, were never consummated because, according to the article, the would-be acquiree had reservations about working within the Zynga culture. In fairness, there’s likely more to the story, but it is a telling that it was a big enough a factor for them to share with the New York Times.

The folks at Zynga are super sharp so they wouldn’t make an acquisition if they weren’t expecting to make money on the deal. Assuming they were expecting a 20% return, their cultural misalignment with the acquired companies cost them $640 million.

The article unfairly paints the Zynga culture as a less than desirable one. What they don’t account for is that there IS NO ONE ‘RIGHT’ CULTURE. People are not all the same. Some thrive on that sort of internal competition and others find it suffocating.

Would you love working in that type of environment? Maybe not, but that doesn’t mean it’s wrong. It just means that it’s not the right employer for you or for these companies about to be purchased.

The goal is to align the culture around similar values so that everyone understands the expectations and are motivated by the actions being rewarded. If that means cultivating a work first, hard-driving, metric-centric mentality then so be it. Plenty of employees are as happy as a FarmVille pig in mud, but that would have made for a less interesting article.

Ultimately, those failed acquisitions were probably a good thing because they recognized beforehand that integrating the cultures of the companies would have been a challenge. But leaving $640M on the table is never easy.

In a recent post about boosting employee morale, David Irvine sites a number of compelling and depressing stats about the disengaged state of the workforce amidst this global recession.

If you are a stats person and would like to see the damage, I recommend you visit last week’s RoundPegg post on the Modern Survey results. Today, however, I would rather focus on the solution – CULTURE.

David Irvine would agree and listed culture as one of his three solutions.

The reason? Culture is the one of the main reasons employees thrive and stay engaged. It is the alignment of unique individuals through shared values, and a well-aligned culture is one of the biggest drivers of a company’s success.

Person-Environment Fit research shows that when people fit their work environment they perform better, turn over less and are more committed to the company.

Another way of putting this is that when people can go to work and be themselves then they have a lot more energy to apply to the challenges the company requires solving.

When your computer is asked to process multiple programs at once you often see the spinning beach ball or the hourglass, right?

Well, as complex as the human brain is, it too only has so much processing power. When we ask people to conform to an unnatural (for them) behavior it requires a chunk of that processing power. They are no longer 100% free to process work challenges.

You are probably wondering if this is the case, then why aren’t all companies quantifying their culture and hiring for cultural fit?

Culture initiatives are hard because they are typically conducted by the senior leadership team, a high-priced outside consultant, several flip charts and a lot of debate about which values (e.g. respect, integrity, communication, excellence)* matter. Nothing ever changes.

What nobody does is ask all of their employees what they value. It’s no wonder employees are disengaged because they’re being asked to live by somebody else’s values. And probably pretty vanilla ones that are only occasionally followed at that.

Active culture management can’t happen if you don’t know what you’re dealing with already. If you’re lost in the woods a new map isn’t going to do you any good. The most helpful thing is knowing where on that map you are at the moment you’re lost.

Culture matters in getting your people to perform. If you want to make a difference, then you need to know what your culture is from the bottom-up. Because the values pasted on your lobby wall are probably nothing more than very cheap decoration.

*Sound like your company? Those were Enron’s.

The latest employment numbers are bad. Not for those who don’t have a job, but for those who do.

A recent Modern Survey study pegged the number of engaged employees at a mere 8%.  Since their numbers didn’t quite add up I re-opened a more credible source, Blessing White’s 2011 engagement report.  They note only 1 in 3 employees are engaged and barely half (56%) of all employees say they will definitely stay with their current employer for the next 12-months.

This doesn’t bode well for companies now or when the economy improves.  An avalanche of voluntary turnover awaits as soon as these folks can find other pastures, green or not.  Meanwhile a huge chunk of your personnel is quite content to do only enough to not get fired…indefinitely.

Intuitively, none of this is good.  But you can find any number of ways around the web to ‘improve’ your engagement levels (we’ve also been known to push our agenda).

You’re most difficult job, however, likely isn’t figuring out what to do as it is convincing those around you that this matters.  Disengagement would take on more meaning if we had better ways to quantify its effects.  Nobody likes to lose money.

While there are data aplenty to show the relationship with business performance the data are generally based on stock market results which seems too nebulous for those of us managing business unit budgets.  Instead, let’s take the available research to put some dollar numbers to the cost of disengagement at a more granular level.

To make the math easier, let’s use a couple of conservative, round assumptions:

• Business unit size:  100
• Average salary:  $50,000
• Disengaged Employees: 18 (18% of unit)
• Turnover: 20%

Top line performance differences

According to Gallup the top quartile of engaged business units generate 16% more profit than those in the bottom quartile.

You wouldn’t be in business if you weren’t getting a positive ROI on your employees so let’s assume a 10% ROI on an employee.  A $50,000 employee creates $55,000 in value on average.

The difference, therefore, is $8,800 in lost profitability per disengaged employee.

Total costs: $158,400

Replacement costs

Every company will have different costs to replace, but most don’t count enough of the soft costs.  The time spent interviewing, training costs, lost productivity, etc.  Estimates range between 30% of annual salary (for hourly workers) to 400% (for senior executives).

For most mid-level knowledge workers the number will be roughly 150%.

Thus, every employee who leaves will cost $75,000 to replace.  Since disengaged employees turn over 49% more often, a quick goal seek in Excel shows that we could save 1.5 employees from turning over by lessening our disengagement level.

Total cost:  $112,500 (rounded down since most companies don’t have any half people)

Bottom line rule of thumb:  The disengaged folks cost you an extra $15,050 each (given the assumptions).  To figure out what the lack of engagement costs your company, take the number of total employees and multiply by $2,709.

This is incredibly conservative, but even so, it’s not chump change.  It’s time to focus on re-engaging.

I never would have imagined that my beloved Boston Red Sox would ever cross paths with my day-to-day work; presenting company and team culture analyses at RoundPegg.

Then, over the weekend, The New York Times published an article by Neil Paine in Keeping Score: Collapse of Red Sox Offers Stark Lesson in Team Chemistry that tied these two worlds together.

“If you could quantify Boston’s chemistry for the 2011 season, it probably would be revealed as the worst in baseball. But therein lies a major problem for objective baseball analysts: team chemistry, as perhaps baseball’s most beloved intangible, defies all measurement.”

The reality is that you can quantify team chemistry – that is, you can assess the cultural preference, personality traits, and communication style of individuals and aggregate those results into a quantifiable profile of the team.

That is the analysis we at RoundPegg are doing for our clients via our automated TeamPegg software. The output is a development guide that summarizes strengths and misalignments of individuals in comparison to the team, and recommended actions to improve team cohesion.

Would the Red Sox have won another Championship had they been aware of team misalignments – probably not, bad pitching is bad pitching. But much of the “historic late-season collapse” may have been avoided had Terry Francona been aware of his player’s attributes and worked to develop a well-aligned squad.

One of the reasons RoundPegg came about was because of this very reason.  Quantifying people isn’t easy, but it’s a data point.

Maybe next year the Red Sox will take my advice and even start scouting for players that are well aligned with their clubhouse culture – call me John Henry…

Human Resources.

The term and title conjures up images of payroll, benefits, and interviews. It almost seems clinical at this point and definitely not the group you look forward to receiving an email from. Why is that?

If there is any group in the company that should be responsible for getting people to work better with one another, to collaborate, to communicate, to make the most of the most important asset of the company, shouldn’t that group be Human Resources?

HR is the business of people. And People are social. The relationship is transitory. HR is Social.

There is a groundswell change to how business is managed and conducted. That groundswell is social. HR has the opportunity to redefine their role in business by championing tools and platforms that enable social business. HR truly begins to facilitate a higher level of collaboration, efficiency, and by proxy, productivity throughout the entire organization they are tasked with shepherding. But where to begin…

I recently spoke at Jive Software’s worldwide customer conference, JiveWorld, last week. Obviously this is a crowd receptive to the idea, having already purchased a social platform, but it’s worth noting that businesses are only starting to scratch the benefits epidermis of moving conversations out of email and into a structured, collaborative, and social environment. Ideas are running fast and welcome.

The idea is this. Your social platform provides the collaboration substrate. People operating on that substrate need incentive to collaborate, in essence to get out of their native environment and into this new warmer and more effective medium. The work they do needs to exist here. To accomplish what needs to get done, key information needs to exist in the new environment. Once early adoption occurs it needs to take root via interactivity. Other people inside and outside the work group need to not only consume the information but also interact with it.

The incentive is positive feedback from the environment and even more importantly from the other people participating in the environment. And just as Gabe Zichermann describes in his book on Gamification by Design and in his Keynote at JiveWorld11, in order to provide that positive feedback loop it’s extremely important to know how the individuals are wired; what motivates them, what makes them feel satisfied. A targeted feedback loop is what lifts the entire system off the ground.

Three easy steps:

1. Post your important work into the social environment
2. Comment and collaborate with others in a way that targets their motivational core
3. Reward others in a way that creates a sense of fulfillment

HR is the group that helps managers build incentives and manage to success. HR can help to build social best practices, foster communication and collaboration, help to embed monitoring and reward systems into social environments, and lead the evolution of business from hierarchical and stultified to social, collaborative, and hyper-performing.

Let’s start working together better. HR, you can help lead the way.

Three years ago this month I started the research behind RoundPegg. I’m a bit of a baseball nerd and love the assorted flavors of statistics that have brought evidenced-based management to the sport.

My goal was to help business professionals replace some of the subjectivity within talent management with statistical rigor. We are still on step 2 of this process now, but the vision hasn’t changed.

At the risk of seeming narcissistic, I thought it was a good time (given Moneyball’s huge box office opening last weekend) to trot out a soliloquy I wrote to my soon-to-be business partners about the opportunity we had to make an impact.

RoundPegg: The Beginnings

I’ve been thinking a lot more about RoundPegg’s place in the changing the future and why I get so fired up about all this. I tried to elucidate the concept through an incoherent story I told on Friday about the conversation I had with a friend at the Houston Rockets and how they were using statistical measurements to assemble teams to predict the outcome of highly inter-connected interactions. Particularly in a sport where individual success often comes at the expense of team success and the stats reported are selfishly obtained. Like our workplaces.

Coincidentally that same conversation he and I had was recently played out by Michael Lewis (author of MoneyBall) in what makes a tremendously long article to read online, but if you’re into sports or using statistical measurements to build teams, an interesting one.

With that, I hope, a better explanation of why this is so huge and the direction we could take this is such a game-changer.

Ultimately, I see RoundPegg completely changing how people work together by changing how we evaluate, grow and utilize people.

Where we begin to de-emphasize previous experiences (having already done a task) and recognize the inter-connectedness of our work teams and the importance the ‘softer’ skills play on our work outcomes. Where we stop managing and supervising and start coaching and leading. Where we let people put their strengths to use and the current ‘managers’ are only there to herd energy and keep the bus running straight. I wrote a post on why I thought this was important over the weekend.

A couple sentences that illustrated this point for me in the NYT article:

“Battier’s game is a weird combination of obvious weaknesses and nearly invisible strengths. When he is on the court, his teammates get better, often a lot better, and his opponents get worse — often a lot worse. He may not grab huge numbers of rebounds, but he has an uncanny ability to improve his teammates’ rebounding.”

What we’re trying to do now by making sure we get the right people on the bus is just the beginning. It’s vital and quite lucrative, undoubtedly, but if we succeed in forcing the conversation to acknowledge that our working relationships are as much or more important than the tasks I’ve previously completed then it’s a foot in the door and we can continue that story into the workplace.

After that it comes down to providing the tools for personnel development on an ongoing basis. Eliminating the bullshit, demoralizing annual review and collecting regular data on our performances, like box scores, that will enable organizations to develop and get more out of their employees and allow RoundPegg to collect data about how we all work together and what drives success.

We’ll be able to recognize whether someone is a net positive or negative to a team regardless of what his individual track record may be. We can identify strengths and weaknesses in a far more objective measure than ever available before. We will be able to put them in a position to capitalize on their strengths, figure out the secret sauce behind work teams and cobble them together for organizations in a way that drives the business like we only hope for today.

We’ll also change what we acknowledge as contribution. Our organizations will foster collaboration as a way to move ideas forward instead of internal competition (e.g. boxing out the right guy so your teammate can grab the rebound). And we’ll be able to measure the intangibles. Where it’s not always the guy who speaks loudest or most or with the most conviction who is construed as having the best ideas. It comes down to evaluating people for their unselfish play that often gets overlooked now.

It’s been fun to re-read this. Our vision remains and we’ve made a lot of progress to the goal. But, obviously, this is something that is going to take time, but we’ll get there…for the good of us all.

Harvard Business Review’s latest email tip of the day is around how to communicate your company’s values. While this isn’t exactly rocket science it’s often easy to fumble identifying, communicating or changing the value system.

Rosanna Fiske’s first two points are vital.

1. Ask employees what is important to them

2. Establish values across the company, not just within management

A company’s value system cannot be mandated top down.  You didn’t mind being told what you valued when you were 6, but you also didn’t know any better.

Each day you contribute to your company’s culture based on what you value, how you get things done and how you behave.

In fact, everyone does.

So while a plush corporate off-site to hammer out new values feels like important work, it’s a boondoggle.  Without assessing the value systems of the employees, not as they experience the existing culture, but what they truly value in the workplace, the initiative is destined to be a very public flop.

Culture initiatives typically suffer the same fate as the boy who cried wolf.  You don’t get many chances to make an impact on the culture so don’t waste that bullet trying to create something without the feedback of everyone who walks through your doors today.

As I said, this isn’t rocket science.  The best way to guess what someone is thinking is to ask them.

We are excited to announce that RoundPegg is one of first few companies to partner with Jive Software on their new social business platform.

The RoundPegg application is currently available to Jive consumers and allows employees to assess their cultural values, personality and communication style.

This matters because business is social. Now more so than ever.

It’s rare these days that our success is truly our own. We often have to lean on others in order to shine (and vice versa). The more effectively we can tap into how others operate the more successful the result.

Too often, frustration mounts when we seemingly can’t get through to others. That makes it difficult to get through to people who operate differently.

RoundPegg enables Jive’s 15 million business professionals to share their psychometric results with one another and get specific actions detailing how to improve their professional relationship to get the best out of their reports, peers, managers and vendors.

For a limited time, the RoundPegg app on Jive will improve the inner workings of all Jive customers for free. Over time we will also provide companies with the ability to quantitatively assess their culture to understand what cultural values truly drive the differences in performance as well as the opportunity for customer companies to identify which candidates best exemplify their culture as well. (All of this can already be done via RoundPegg by contacting us at TellMeMore@roundpegg.com.)

Until then, let’s all understand our differences and work better together.

RoundPegg was mentioned on NPR’s Marketplace program last week talking about HR3.0 in the context of the hiring process. (Disclaimer: we may very well have made up the term.)

Despite that, we fervently believe in the idea behind it and want to define it a little more detail.

HR3.0 introduces transparency to the job search/hiring process.

Even with more of the hiring process moving online, we are only just now beginning to catch up with where the process was in the offline world 15 years ago.

That’s not to say the digitization and transition online hasn’t improved the process some. But it’s mainly recreated what’s already existed into 1s and 0s and improved things at the margins (see after the jump for a brief history of the online job industry).

HR3.0 marks the day when the power of the Internet is brought to bear to actually do things that were difficult, if not impossible, to do in the offline world. HR3.0 starts the process of changing the game.

At its core, it is about transparency.

Transparency to ultimately figure out whether you can work successfully within a company or whether a job candidate will return you a positive ROI.

That includes peppering who you know and their contacts for information on working at a company or peppering shared contacts to get the real scoop on a candidate. It also means having the ability to drill deep into a company’s real culture or a team’s sub-culture or drilling into whether a candidate will be able to work well with a team.

Changing jobs/hiring is a massive commitment and one where the deal is typically sealed after a three dates. If a job seeker makes the wrong decision the downstream effects could derail the individual’s career path for a couple of years. And a bad hire costs a company a ton of money (~150% of compensation) and has ripple effects throughout the team.

The commitment for both sides though is largely psychic though. Will a new hire ruin a team’s chemistry?  Will a new gig and manager make your life miserable?  Team politics (used neutrally – every team has them) can be crushing for a new individual who doesn’t quite fit.

Being able to put more of that work-style information in the hands of the players involved means better decision-making (usually).

LinkedIn and apps like BranchOut have made it much easier to be proactive in the process. It’s much easier to collect information about potential managers and candidates alike to begin painting the picture of what working together may be like.

We at RoundPegg are taking an exhaustive, objective approach to help companies understand their culture and who best fits while GlassDoor has started on the other end and offers candidates a peek behind the wizard’s curtain.

Ultimately it all paints a better picture of whether the grass really is greener. Calling provided references is a joke and asking your uncle’s college roommate what it’s like to work at GloboCorp is a silly, invalid data point of one.

The Internet is helping reveal the true drivers of workplace success and providing both sides the opportunity to do things differently (and better).

Welcome to HR3.0. This is just the beginning. It’s going to get really damn exciting especially when these approaches start to converge.

“History” of the Online Job Evolution

Hiring 0.9

The Monsters of the world digitized classified ads to aggregate eyeballs and enlarge the pool of applicants. Not terribly effective, but a necessary and lucrative first step.

Problem(s) solved:

* Not enough candidates know we’re hiring (company).

* I don’t know who is hiring (job seeker).

Hiring 1.0

Job seeker profiles allowed for more passive job hunting by candidates and, in theory at least, proactive recruitment.

Problem(s) solved:

* “I don’t want to hire someone who’s looking for a job” (company…and crazy)

* “I’d move if something better came along but looking for a job sucks and is a lot of work (job seeker)

Hiring 1.1

Semantic matching promises great things without much effect. It creates a cottage resume SEO industry, but the idea of matching resumes to job descriptions has obvious limitations that become exposed after several companies are swooped up for tens of millions.

Problem(s) solved:

* Too many unqualified candidates (company)

Hiring 2.0

Hiring gets social…again. Hiring has always been a social endeavor in the ‘real world’ (see: cronyism)  but new and better tools exist that help make it more efficient (and less crony-centric). LinkedIn, BranchOut and JobVite are obvious players helping the job seeker and hiring manager solve their respective problems.

Problem(s) solved:

* Every damn Tom, Dick and Harry can apply with the click of a mouse. I need a way to filter through hundreds of resumes to find those that matter and starting with my employees’ friends is a good shortcut to identify quality (company).

* Submitting a resume is futile if I don’t know someone at the company. It just gets swallowed by the Internet abyss (job seeker).

Hiring 3.0

See start of post.

People Don't Mind Assessments

This was a question we wondered about too. For good reason, obviously.

Turns out, despite the fears of some, administering pre-hire assessments do not significantly diminish the applicant pool.

The fears are highly justified, but the bigger story here is that candidates want to avoid landing in a bad job as much as you want to avoid a bad hire. After reading the comments it was clear they overwhelmingly supported the idea that applicants are not just willing, but hungry for something that will also help them identify whether they will fit a company’s culture prior to joining just as much as HR professionals and hiring managers.

The results (seen above) show that only 10% of applicants claim to flat out refuse to take a pre-hire assessment. [Though when push comes to shove, I'd guess not all of them will hold that line.]

Even better for hiring managers is that over a quarter will only complete the assessment if they are truly interested in the job. This means pre-hire cultural assessments are a quick and painless way of lopping off the portion of the applicant pool who may have the skills and even be a good fit, but they just aren’t that into you.

Moral of the story: You may experience 1 in 10 people refusing to complete the assessment, but you’ll save time not having to weed through 1 in 4 who aren’t that serious or interested in your company or the job. Even better, by administering pre-hire assessments you can tip the odds in your favor of hiring top performers who fit your culture.

[NOTE:  Given the number of respondents these results are accurate at a 95% confidence level +/- 3.56%.]

Every few months there is a resume that makes the rounds online that gets people talking. Remember the video resume for the guy applying to UBS showing him bench pressing 400 pounds? That didn’t turn out too well for him.

The Huffington Post recently posted Eric’s resume (seen above) and asked whether it was a ‘win or fail.’

Standing out and getting attention is a great thing (almost always). Especially when someone is going to be weeding through hundreds of resumes – more than half of which are completely irrelevant for the job.

Eric’s resume is moderately amusing and it had the potential to be good. But, it’s not.

Simply by focusing on one or two themes and twisting a few things around he could have gotten just about any entry-level job he wanted.

Rather than tying his attributes and experiences back to something even remotely relevant to working, he went beyond non-sensical and landed in the ‘don’t trust me not to run with scissors in my hands’ area.

At first glance he could have gone the route of saying he’s a quick learner with tremendous focus (e.g. mastered MarioKart in one 18-hour marathon session).

And ‘trust me’ isn’t a great response for explaining away a lack of past drive, focus and success. There aren’t too many gigs that ask for people who are proficient at ‘daydreaming out window (sic).’

Moral of the story: don’t be afraid to be different. Sometimes it’s the best way to get noticed. But make sure your irreverence is intelligently irreverent. Make the person reading your resume think ‘this person is pretty funny, I’d like to meet him/her,’ not ‘wow, I hope someone’s keeping an eye on this kid making sure he’s taking his meds.’

Resume Fail.

A couple posts ago we wrote about a poll RoundPegg had posted (login req.) on LinkedIn asking whether people would be willing to complete a 25-minute assessment to help identify how well they fit the culture of the company to which they were applying.

There were some strong opinions in the comments, both pro and con. The takeaway is that many people who are against assessing whether they fit a culture have a different understanding of what culture is altogether.

“Homogeneity and lack of diversity are bad.”  That rebuttal may sound compelling but it has nothing to do with company culture (at least not how we define it).

What they mean is that you don’t want a company who thinks alike or,  even more cynically, doesn’t hire people of certain races, genders etc.

First, let’s clear a few things up:

• * Culture has nothing to do with the color of your skin, your age or what associations you have
• * Culture is not what or how you think
• * A homogeneous ‘culture’ doesn’t mean that everyone blindly agrees

Culture is about values.

A company rewards what is collectively valued (e.g. being decisive). And individuals are motivated by what they value. You WANT those two to be aligned. Desperately. A lack of diversity/homogeneity in values is a good thing.

When people are rewarded for doing things that motivate them, they will work a hell of a lot harder and produce far better results. They find themselves swimming downstream instead of up.

With respect to diversity, nobody should be discriminated against because of race, sex, age, disability – absolutely. But that doesn’t mean you get better results when you mash people together with wildly different values (see: Congress). Nor does it mean you get people who think alike.

Everyone comes to the table with different life experiences, different work experiences and different interests. All of those create the diversity of thought both sides of the conversation desire.

Imagine we both value ‘being decisive.’  Without talking about it beforehand (ground rules are rarely set for our work conversations) we have implicitly agreed that we need to make a decision quickly and move forward.

But because we’re both seeking a quick decision that doesn’t mean we agree on the solution.

Sharing a value system creates a strong foundation upon which to constructively disagree. We both understand the motivational forces behind the others’ argument. So when I abruptly deliver my solution you aren’t going to see my  curtness as a personal slight. It’s not that I don’t value your  opinion. But I value our time more. We can discuss it rationally (but quickly).

All those things we call ‘politics’ are lessened when we share a common set of values and we can now focus more on solving our business’ challenges instead of deciphering what the other meant in our last conversation.

When we talk about company culture let’s put aside the automatic reflex to fall back on diversity and start critically thinking about what culture actually means.

Company culture is what is valued and what is rewarded. Period.

It’s almost universally acknowledged that a company’s culture matters.

Some companies go to great lengths to ensure that they maintain their core values and it truly is the work of everyone in the company to set the social norms and out undesired behavior.  Often though, the ‘good cultures’ become inextricably linked to a ‘visionary’ CEO. Even when their motivations are pure, so much of their time becomes dedicated to writing books and giving speeches that it makes it difficult not to get a little cynical.

(note: we’re big fans of any CEO touting treating employees like intelligent, full-grown adults, but we don’t want their public ubiquity to make it easy for others to dismiss the importance of their words because there are lessons to extract.)

Cynicism aside, there are two massive issues with the rockstar CEO that tend to get overlooked:

• Culture usually starts at the top so the praise isn’t unjustified. But it’s time we give credit to the people who manage the culture over the long haul. The line managers who promote the right behaviors and admonish the wrong ones, the HR teams who build the internal programs to highlight core values and the hiring managers who do a better job than most of identifying those who ‘fit.’ A lot goes into building and maintaining a culture. The fact that these CEOs have paid as much attention to it as they have is a testament to their understanding of what drives their business forward, but they get too much credit.

• Furthermore, there is no one right culture. These guys wouldn’t be able to make as much money on the books if they said that but look at the list below. Almost every one of them has/had a different style. There is little in common between Jack Welch and Tony Hsieh other than their success. But, each made it work by fostering a culture that worked for them and their business. And each was ruthless in their own way of ensuring that the values stuck.

[Just a few off the cuff examples - Lee Iacocca, Yvon Chouinard, Jack Welch, Gary Erickson, Tony Hsieh, Gary Hirschberg, Herb Kelleher...and we could go on and on and on.]

Celebrate your culture and live it everyday – just don’t forget that in order to lead you need to have people willing to follow.

We recently created a poll on LinkedIn (requires login) asking people whether they’d be willing to take a 25-minute assessment when applying for a company if it helped identify how well they fit to the company’s culture.

After 118 responses only 11% have said they would not complete an assessment because either they felt like it wastes their time or because it could be used against them.

But the comments from some of these 11% are interesting.

“…it all seems to me to be a substitute for quality in the recruitment decision making process.”

“Why wouldn’t the Interveiwer [sic] be capable of determining these things and compiling a valid report of interveiw [sic]?”

Why is it that the use of analytics in the hiring process causes some to react negatively to the HR people behind them?  Operational line managers who use numbers to improve their decision-making ability are lauded for their objectivity and quantitative prowess. And yet in a function that is rife with subjectivity a handful of folks find it reprehensible that a good hiring manager can’t figure what makes complex human beings tick strictly by using their gut instinct and some well worded questions.

Hiring without objectivity is ludicrous.

It is subject to too many biases to count. Height, weight, attractiveness, firmness of handshake, attire, gender, race, eye-contact…and that’s just the beginning of the visual biases before the candidate opens her mouth.

The Vienna Philharmonic Orchestra (courtesy of Malcolm Gladwell’s Blink) noticed this after holding auditions behind a black curtain for the first time. Historically, the best musicians had always been men. Lo and behold, once they held auditions behind a black curtain and the ‘interviewers’ were judging them solely on the sound of the music, it turned out that the best musicians were actually evenly split between men and women.

Quantifying the hiring process is only one piece of the puzzle. It is not and nor should it ever be the ultimate arbiter. After all it’s people and not the machines that have to work with the new hire. But adding some objective rigor into a process long dominated by subjectivity can only help. Particularly given that collectively hiring managers are barely better than the flip of a coin.

Ultimately, it’s to the benefit of both parties. It provides an inside look at what a company’s culture is actually like (not just what they post in the lobby) and can make expectations and behaviors known at the time of hiring. Two things that people often struggle to put into words even when they are defined. It also helps people avoid landing in jobs where they stand little chance of succeeding.

Are people’s fears justified?  Perhaps, if objective measures are used as a short-cut. But the real ire should be raised over how much we tolerate mediocrity and subjectivity in today’s existing hiring practices. Just because we don’t have a machine saying that we weren’t hired because we had a limp handshake doesn’t mean that it’s not the case or that we shouldn’t be furious. Even though we can’t see the bias, it is still there. Don’t blame the machines for making one part of the process transparent…finally.

Company culture matters to your business. That’s not a terribly bold statement. But why?

Culture matters because business is social.

These days most of us work interdependently.  Your success is likely predicated upon exchanging ideas with your peers and receiving intellectual inputs from several different departments.  True individual contributors are few and far between in a knowledge-based organization.

A crude example is the evolution from waterfall to agile technology development.  Ideas and new products are created in highly interconnected and iterative processes rather than via assembly lines.  Which gets us back to culture.

We need to know how to exchange information with one another.

Culture sets those norms.  It establishes how we interact, how we make decisions and what’s deemed worthy of reward.

When employees’ value systems are aligned then so too is the company culture.  It becomes a self-reinforcing cycle because everyone interacts and rewards according to their own value system (no matter what the annual performance evaluation sheet says).

A well-aligned culture allows people to communicate freely because the norms are well understood. The ground rules are implicitly agreed upon by everyone who has elected to work there and they are reinforced with every interaction.

When values systems are out of line, cultures ‘go bad.’  Rewards seem arbitrary, nascent ideas are used against their authors or credit is co-opted.

Culture fosters trust (even in cultures that are aggressive and competitive).  In a game of repeated interactions it doesn’t take too many bad experiences to not want to work with a peer again.  Or to withhold your best when dealing with them.  Self-preservation will almost always win out over doing what is best for the business.

The better we all communicate the greater the likelihood of achieving success.  And since we’ve already optimized processes, slashed workforces and off-shored as much as we can there aren’t too many places left to squeeze out more profits.  Optimizing communication and aligning culture isn’t easy, but it’s the next frontier in driving business success.

Sometimes you just have to laugh at how any of us ever manage to hire great people. Other times you just have to laugh at another’s spin on some pretty standard interview questions.

The Oatmeal recently posted a comic strip of the “Six Crappiest Interview Questions” (our favorite is above). Worth a few minutes when you have time.

Not much more to say other than we think it’s time we all stop asking these questions and instead focus on adding more rigor to the hiring process.

Note: if your manager routinely reads your screen over your shoulder some of the items are NSFW.

A good friend is a teacher in a charter school and her principal has shown a repeated pattern of passive aggressively hiding behind email instead of discussing issues with his staff or with the individual who is creating 'the problem' directly. This staff-wide reproach was just too good (read: atrociously awful) not to share.

The moral of this story for us is that if you have something that really bothers you and don’t know who is causing it, gather everyone together and discuss it in person.

At the very least it gives you plausible deniability.  Otherwise, you wind up with everyone laughing behind your back and forwarding your email to all their friends.  You just look like a complete jackass (hard to argue otherwise).

Subject: Disgusted Beyond Belief…

“I believe this email will be read by one person for whom this message applies. I hope the strength of it encourages you to be thoughtful enough or simply embarrassed enough to change your ways. I know I speak for everyone when I tell you this is unbelievably disturbing behavior for an adult. Please read below. There is actually no humor intended on any level in this message. It is written by someone who is deeply concerned, disgusted, and angry.

Dear adult who continues to pee all over the staff bathroom seat,

I have to believe that if you are a thinking, feeling adult with even a measure of humanity and decency that you must be deeply embarrassed and disappointed in yourself for repeatedly peeing all over the seat in the staff bathroom even after your colleagues have begged you to change that practice.

You are an adult so you must be fully aware that all you need to do to avoid peeing on the seat is lift it up. Really, all you have to do is lift it up and you won’t leave a disgusting mess behind. If that feels too disgusting for you to do, I find that both ironic and sad. All you need to do is grab a piece of toilet paper to put between your fingers and the seat as you lift it up.

I am really troubled that someone I hired comfortably does this nearly every day knowing that the privacy of bathroom use gives them anonymity.

It is the choice of a small child who does not know better. It is a choice that lacks humanity, citizenship, and basic decency. Really? This is so unbelievable to me. Really?

Why do you believe that it is up to us to clean up after you if we want to use the toilet ourselves or send a visiting adult to that bathroom?

If you make it a habit to let students use that bathroom, cease that practice immediately and let me know so I don’t worry about determining which adult is doing this.

I find this so disturbing that it is nearly worth putting a card reader security system in place to determine who is doing this and when.

I truly hope this email effects some change.”

- [name redacted to protect the horrible boss behind this mail]

Hope you find some solace in this and realize your boss could be worse.

Another hidden gem from Sheena Iyengar’s The Art of Choosing. Dr. Iyengar had several hundred Columbia Business School students get 360-degree feedback from past managers, colleagues and subordinates.

The lesson? You’re not as great as you think you are so get over yourself.

Turns out that 90% saw “…significant discrepancies between how they saw themselves and how others interpreted their actions. Many who thought they were popular and valuable team players learned that they were seen as average and difficult to work with.”

90%.

Unfortunately for that group, others’ perception is reality.

Even worse news is that Dr. Iyengar references a study by Daniel Ames that reported that “…in the workplace, people who attempted to overtly enhance their position and reputation were seen as disruptive to the group and ultimately performed poorly.”

This speaks to the importance of being able to have those immensely difficult conversations about who we fundamentally are (or perceived to be) as people and how we behave in the workplace.

The more you have in common with others in terms of values and personality the easier these conversations are and the better you understand and appropriately interpret the actions of your colleagues. This gets to the heart of what we’re measuring at RoundPegg and why we so vehemently believe that hiring for fit needs some objectivity and rigor.

And while we may not have the exact answer, we believe we’re taking a big step toward the solution with our internal Touchy Feely meetings. It’s damn hard to discuss our perceptions that rub or (possibly harder) to be on the receiving end of that feedback. But it’s what makes a group and company run more efficiently and effectively. When we can get out of one another’s way we’re better able to put the business first.

We can all improve and we will be far more successful if we’re able to listen to others’ perceptions and internalize that.

Everyone and every company is a work in progress, to be sure, but nothing worthwhile is easy.

Kaizen.

Even when people are friends, as we are, and have a lot in common, which we do, there will always be bullshit (our fancy internal term) that arises. If left unattended, it will take root and blow up spectacularly.

And those festering issues can manifest themselves in other ways. Someone will shoot down an idea not on merit, but because of who suggested it. Or someone gets caught up thinking about how they’ve been 'wronged' rather than focusing on the business.

There are only so many minutes in a day. You can either do your best to clear the mental decks or you can ignore the issue altogether, let things build up and then fire someone.

Unfortunately, most companies select the latter option.

At RoundPegg, we've chosen a different approach.  We air our concerns and grievances with eachother in a bi-weekly Touchy Feely Meeting (a bit of a misnomer since it’s actually one of the hardest things to do).

We also have the benefit of knowing how each of us are wired and we pull out our 'Peggs' at every meeting to remind others of what we value or what our personality is. That makes things more effective…as do the rules we’ve put in place:

1. Start by stating how a situation makes you feel (When X happened, I felt Y).  Describe the situation and your reaction to it only.  No focusing on what you think the other person intended or their motives
2. Be vulnerable. Letting your guard down is the best way to prevent the meeting from going south and ensuring that everyone has the same goal of improving the situation
3. Think. Don’t react. Being defensive is not helpful.  Instead, try to understand why someone felt that way.  Needless to say, attacking is prohibited.  Nobody is keeping score so it’s pointless
4. Take ownership of making someone feel the way they did/do.  Likely, that wasn’t your intention, but it happened.  Own it
5. Don’t let issues linger.  It’s okay to agree to think through things as ‘homework’ and revisit in the next session but the person who brought up the issue must agree
6. Walk out stronger than you came in.  The air should be more clear and will be if people are owning their actions and agreeing to
7. Work hard. Put real thought into solutions between meetings.  If, like most other meetings, you walk in and wing it then it’s not going to work and you’ll likely violate rule #2.

We're then posting the output on our internal wiki. This may be going too far, but we want to have a fully transparent workplace and you can't get more sensitive than these meetings. We'll continue doing so until we're badly burned. And then we'll still probably continue doing so with a tweak or two (like removing names).

As we grow we have every intention of rolling this out for every team. Frankly, it’s a couple hours a month that are very well spent. You waste more times doing less productive things, like status meetings.

While I'd like to tell you these are the elixir that cures all workplace ills, it's too early. We've been at it for a couple of months, but we can definitively say that it doesn't hurt and that we all believe we're a stronger team for feeling comfortable bearing our insecurities.

While cutting my teeth at my first 'real job,' I had a friend who constantly dwelled upon his Dependability Quotient (DQ).  His take was that he was only as good an employee as his word.  He was a freelance consultant so the need for a high DQ was more obvious than for all of us securely employed at Big Co., USA.

But, the need for a high DQ is the same regardless.

Work is all about trust.

Every interaction, even those with people with whom you are (supposedly) on the same team, is about trust.

In his case, the more people trusted him the more work he would get, the more money he would make and the more often he’d be recommended to others.

Even so, it holds true for all of us corporate monkeys as well.  The more often we successfully follow through on our word the more access to big opportunities we get.  The more we can be leaned upon to help senior executives.  And the more we are entrusted to do what's right for the organization and we don't waste as much time being mired in office 'politics.'

While my friend and I never explicitly talked about how to quantify DQ, I'd guess his mental equation went something like this:

DQ = 0.75*(# of completed commitments) – 1,000*(# of failed commitments)

While that's likely overstating it, you’ve heard the old pearls of wisdom that say it takes 10 happy customers to make up for one pissed off one.  Or ten positive remarks to cover the sting on one negative.  DQ would follow an amplified form of those.

We work interdependently these days.  There are very few things that one person accomplishes solo.  So in order for you to look good you need your manager, peers or subordinates to follow through on the items they committed to do for you.  And vice versa.

To get ahead, take the long view.  Worry less about the petty politics and work on establishing your DQ.  Only one of those will follow you for your entire career.

Think about who you'd love to work with again.  My guess is that they were the ones you trusted implicitly after hundreds of repeated actions where they followed through and made you look good.

Thanks for reading. I'm off to tackle something I’ve promised to do for our team. Chalk another 3/4 of a point up to my DQ.

One study in particular jumped out. Drs. Gupta and Singh of the University of Rajasthan studied the consequences of arranged marriages and marriages by choice. The results?

Couples who had been together for less than one year and had ‘married for love’ (i.e. chosen their partners) scored a 70 of 91 on the Rubin Love Scale. After ten years, they totaled 40 of 91.

The arranged marriages, as you can imagine, didn’t start so hot and heavy. First year couples tallied 58 points, but that grew to 68 after ten years.

The conclusion Iyengar (and the study’s authors) draws is that, “In an arranged marriage, two people are brought together based on shared values and goals, with the assumption that they will grow to like each other over time, much in the same way that a bond develops between roommates, business partners or close friends.”

The marriage metaphor is often used to describe hiring or accepting a job in the professional ranks. Both sides spend a little time doing a mating dance, putting their best foot forward and trying to hide their craziness and then make a decision that will – they hope – last a long time.

The process itself is a bit of a hybrid between choice and being arranged, particularly if an outside recruiter is used (though their incentives for a happy match aren’t anywhere near  as strong as two parents’). But far too often we are making hiring decisions “for love” (i.e. we fall in love with the resume and the skills and accomplishments the candidate brings). Ultimately, we are so overwhelmed by their stunning ‘good looks’ on paper that we overlook the fact that our values and goals are not well aligned. As is typical the relationship starts well. But over time, their differences are exposed which is why nearly half of all hires ‘fail’ within the first 18-months.

While everyone tries to get to the heart of a candidate’s values and personality, it ultimately devolves into a like-ability screen. Can you imagine eating lunch or going for drinks after work with the candidate?  If so that’s great, but it makes for a good friend, not necessarily a great employee.

At RoundPegg, we encourage you to look beyond that attractive resume. Just as the parents who select their children’s mate won’t pick someone repulsively unattractive, you’re not going to hire an idiot. Odds are good that the person who has adequate skills but embodies the best of your culture will ultimately prove to be the far more successful partner. Sometimes it just takes a little objectivity to see that.

In this edition Dr. Natalie runs through the benefits of aligning a company culture as well as providing some solid how-tos in order to identify and align your own culture. While it’s not easy, it’s worth the energy expenditure.

Please enjoy and, as always, contact us at info@roundpegg.com if you’d like to learn more.

To pick up a few action items on how to re-engage your team, follow along with Natalie Baumgartner, RoundPegg's Chief Psychologist as she outlines the most important things you can do.

The brief summary is that he doctored his resume to show the he'd…"been climbing the ranks of European soccer, signing with a top-flight Paris club and training with a team in Argentina. He had an agent and a Web site that showed him scoring a goal for the English club Swindon Town. He'd even been chosen as an ambassador for Lance Armstrong's charity."

The problem was that none of it was true.

His reaction? "If I lied a little bit on my CV, I am sorry…I am just like 99% of my friends in France, who say on their résumé they can speak fluent English."

It's amazing that we're surprised when this happens. We put a lot of stock into the resume and the supposed skills and accomplishments one brings.

The stats say that almost half the resumes floating around out there contain false information (actually 42.7% via ResumeDoctor, March 2006).

So why do we keep putting so much faith in resumes?

Because it's easy.

Resumes are shortcuts to get us what we're looking for. It's safe to hire the person with fantastic accomplishments. It's safe to find the person who talks a great game and has the self-proclaimed history to back it up. Pedigrees, experiences and stated feats are cues to us for an individual's ability to perform in our work environments.

Granted, the resume is likely still the best thing we have going for us. But it's outdated.

Like stocks, past performance is no indicator of future performance. Especially if that past performance is falsified.

The reason the past doesn't work is because new variables are added to the mix. Your business is a new environment. There are new politics at play. The dynamics between teams is different. And the way things get done is vastly different.

So what to do?

Look for themes in the resume instead.

Does the individual create new products or modify existing ones? Are they focused on working with teams or working in a silo? Are the accomplishments they focus on team accomplishments or individual? Answers either way are fine, it's all a matter of what your own culture is. What's makes your successful people tick? What does the role require?

RoundPegg’s Chief Psychologist, Dr. Natalie Baumgartner runs through the hiring landscape, the pitfalls most fall into, how to improve the process and finally, how RoundPegg can help.

Bravo.

Their questions are great for a prospective job seeker, but we want to offer up a few points on how to view this from the company’s point of view. After all, culture is a two-way street.

Culture ultimately comes down to what is valued. From a company’s point of view what is valued is what gets rewarded (not always, but it should be).

Every new person who walks through your doors will change the culture. If it’s a new CEO, she’ll change it a lot. If it’s a new marketing assistant then the sphere of influence will be much more limited.

So how do you identify what a prospective new hire values?

1. Ask about mentors. Have them describe a person they look to for mentorship (even informally). What is it about the person they admire and try to emulate? Get the candidate to list the six or seven attributes that person has that are worth emulating.
2. Rate themselves against their mentor. Then ask the candidate to rate themselves against their mentor on those six or seven attributes.
3. Utilize the resume. Believe it or not, resumes can be used for things other than skills and accomplishments. Look for patterns in their work. Did they constantly create something new, did they improve existing processes or do they talk about how they got more out of a team?
4. Ask them to talk through their obituary. Okay, maybe morbid (try retirement announcement if that’s less so) and maybe a little out of left field. But the idea is to get them to think about the things of which they are most proud. These will announce their values loud and clear.
5. Where and when were they most successful? At which job were they most successful? Ask them to describe the environment. What contributed to their success? What were the people like around them? What were their best traits?

At RoundPegg we’re objectively quantifying culture to provide a rigorous data point which you can use in the interview. Please contact us if you’d like to find out more about using it in your interviewing process – info [at] roundpegg [dot] com.

What other techniques have worked well to identify what an individual values in the past?

That is, people perform more effectively and efficiently when they fit the work environment.  When they share values, work style and have a personality that jives with the team.

RoundPegg's mission is to help companies find the right person to hire based not upon what people have accomplished, but how they've accomplished it. And similarly, to help job seekers understand the environments in which they work best and help them identify the companies where they’ll have the best chance of succeeding.

To learn more download our ‘one page’ PDF.

The flip side, as one commenter pointed out, is how a company should write a job posting.  Too often job ads are pure vanilla.  If you removed the logo, a dozen companies could use the same post.

A burger joint in New Zealand nailed it perfectly.  Definitely worth the read.  With that, a few additional thoughts on how to improve your company’s job postings.

1. Know thyself. Convey what it’s like to work with you and your team. What are the traits of your highly successful people?  With whom do you work best? What is your management style? Don’t bullet what you want instead…
2. Show your personality. Write a post that attracts the kind of person for whom you’re looking. It’s okay to not be boring. Tell a story rather than bullet out skills you need.
3. But be honest – show your warts. You’re not the perfect manager. Nor is the job or company perfect. Know the downsides. Describe them in moderately gory detail. It not only sets expectations but it also allows people to opt out of applying, saving you time and potentially the brain damage of a really bad hire.
4. Can the jargon. Every company has their own vernacular. Focus on the output and therationale for doing the work rather than what the work is called.
5. Help them help you. What does success look like? Where is the bar and what needs to happen to clear it? Most people don’t set out looking for an 18-month gig, it just works out that way because expectations weren’t set and they got pissed off. Clearly communicate the success metrics.
6. Paint the winning scenario. If they succeed wildly, what will they get? Paint the best-case scenario – truthfully. Everyone expects to win, so start the conversation there. It also helps to align motivations with the real rewards. If I’m motivated by more responsibility then an employee of the month plaque just won’t cut it. I want to know that ahead of time.
7. Your product is your environment, not your product. Enough already of the two-paragraph description of how you’re revolutionizing XYZ market. Everyone knows that’s all fluff. Don’t waste the space. Instead focus on what the candidate really cares about – the environment in which they’ll spend 8-12 hours every day.
8. Don’t copy a job description from a Google search. You spend a lot of time trying to differentiate your products so why start trying to be the same now?
9. Show don’t tell. We’ve covered this previously, but the idea is to convey your company’s culture and the skills you require via the posting rather a simple snoozefest of a list. Need someone detail oriented? Make a few ‘mistakes’ in the posting and somewhere convey that the right candidate will identify them in a cover letter.
10. Describe a job to which you’d want to apply. If you had to get rehired for your current job what would make you want to apply?If you read what you just wrote would you be excited to apply?
11. Establish hoops. While most of this is focused on the candidate, you’re the one hiring. Don’t be afraid to put candidates through their paces. This is more a marriage than a one-night stand.Have clear hurdles in place that will screen out people who don’t fit your culture or way of doing things. Assessments are gaining traction. Short job simulations are well. If you scare someone off, so be it. The cost of a bad hire is not worth the extra couple of applicants.
12. (If you haven’t already done so…) Design the position for the candidate you want. Before even posting a job make sure that you know what you need out of the role. Want an ambitious self-starter? Make sure there is a career track in place beyond the role for which you’re hiring.

In sum, focus more on how well one fits you and your environment than on the skills they bring. Obviously, you need a baseline of skills but you’re not going to hire a dummy.  Anyone short-listed should have the know how and what they don’t know you can teach them. But you’ll never be able to change someone’s personality.

So don’t get so blinded by one’s skills that you ignore the red flags.You won’t be ignoring them in six-months.

Kevin Millar, former Boston Red Sox, was recently signed by the Chicago Cubs.  While he plays a position at which the Cubs need a backup, the odds of him making the big league team are incredibly slim.  He’s fourth on the depth chart where only two will play with the big club.  Plus, he’s advancing in his career and hasn’t hit much in the past few years.   He was signed strictly to set the team’s mood in the clubhouse over the six-week stretch of spring training.

Millar’s take: chemistry matters.

“People ask me all the time, ‘Is team chemistry overrated?’ Well, you tell me. You’re with 25 guys more than your family from basically end of February to October. That’s not overrated. You try to bring a team and a group together. When you get everyone pulling on the same rope, it’s exciting.”

Last year, the Cubbies signed notorious clubhouse cancer Milton Bradley and paid the price.  He’s the epitome of how companies often hire.  An ‘A’ player by all statistical measurements, but little mind was paid to whether he’d fit in with the rest of the guys in the clubhouse.  While impossible to attribute Bradley’s antics to the Cubs 14-game decline from 2007 to 2008, it’s obvious the front office has gotten the message and is determined not to repeat that mistake.  Clearly, they lay some of the blame on a chemistry experiment gone bad.

Baseball is a unique sport where every play is a series of one on one battles.  Between the lines, I’d go so far to argue that chemistry matters less in baseball than in other sports.  Or your company.  But as Millar points out, you live with these guys.  If you don’t like being around them it’s going to be harder to bring your best every day.

The Cubs are willing to spend potentially up to a million dollars to set the right mood in the clubhouse.  Meanwhile, your company is probably more dependent upon teamwork than any baseball team.  How much time, effort and money are spent aligning your culture, your team and getting the most out of your employees?

I’ve been meaning to post this for some time so you may have already encountered it.  Regardless, it’s worthy of a chuckle as you coast into the holidays and think about how you’ll get everyone to walk back through the door come January 4th.

He concludes his post with the following advice:

“…the best way to make your employees feel a false sense of job satisfaction is to somehow convince them that there are much better jobs elsewhere. For example, you could subscribe all employees to entrepreneur magazines that are full of stories about people who left their unsatisfying jobs to become zillionaires. If you instill the false belief that better careers are obtainable, cognitive dissonance will cause the employees that have high self-esteem to believe they must enjoy their current jobs.”

Best of luck in 2010!

Hiring is a headache.

Dr. John Sullivan’s latest post at ERE pulls together a ton of shocking numbers that should convince you we need to find a better way.

50% new executive turnover — nearly half of new executive hires quit or are fired within the first 18 months at a new employer (Source:Corporate Leadership Council).

50% of the processes users (both managers and new hires) later regret their “buying” decision (Source: The Recruiting Roundtable). In addition, 25% of new hires later regret taking their new jobwithin one year (Source: Challenger, Gray)

66% regret hiring decisions — Nearly two-thirds of hiring managers come to regret their interview-based hiring decisions(Source: DDI)

Hiring and retaining below or even average performers have real opportunity costs because top performers can increase productivity, revenue, and profit by between 40% and 67% over average performers (Source: McKinsey & Co.)

Only a 19% success rate — only one out of five of the process output can be classified as unequivocal successes (Source:Leadership IQ).

Basically, we’re not good at hiring, we regret most of the decisions we make, there’s a big difference in contribution between average and good people and the people we hire are often unhappy we choose them.  That’s pretty damning.

A good hire requires finding someone with the skills to do the job AND the right person who can thrive in your company’s work environment.  Our guts don’t adequately assess the latter because inevitably we revert to deciding whether the candidate is one we can imagine having a beer with after work.

Again, why we created RoundPegg.  RoundPegg will objectively and rigorously identify which candidates will function best with your company’s culture, with the work team and the hiring manager.  We just released the first version of the application.  If you’d like to learn more please drop us a line at employers [at] roundpegg [dot] com.

Dueling philosophies on hiring and employee retention at the latest Web2.0 conference (via WSJ Blog).

Mark Zuckerberg touted the Facebook culture of hiring entrepreneurially inclined  people who burn brilliantly and then fade away (presumably of their own volition).  Tony Hsieh of Zappos provided the counter philosophy of finding the folks who fit the culture and aspire to stick with the company for 10 years or more.

Who is right?

Both.  The key that makes both of them right is that everyone is aware of the culture.  Each CEO knows exactly what they’re looking for and how to identify it.  Success is achieved by aligning the culture/working philosophy and getting everyone pulling in the same direction.

Corporate success comes from recognizing what you want to achieve and defining the culture accordingly.

Facebook is about changing our relationship with each other and the Internet.  Thus, they need people who can conceptualize a radically different world and execute to get everyone there.

Meanwhile, Zappos is about customer service.  So it makes sense that Zappos creates a very cultivative company.  How employees are treated is how they’ll in turn treat customers.

There aren’t necessarily good or bad cultures.  But there are good or bad cultures for you.

The ability to explicitly describe what each company is looking for enables people to opt-in or out of the application process.  And that same explicitness enables everyone hiring at the company to hold all applicants up to the same light and identify the ones who will be successful by honoring the company’s philosophy.

Unfortunately, most companies can’t state their cultural philosophy as passionately or clearly as Zuckerberg and Hsieh.  And, it’s not much of a surprise there aren’t many companies doing as well as these two either.

The article included some alarming numbers from the US-based Center for Work-Life Policy:

Between June 2007 and December 2008 the proportion of employees who professed loyalty to their employers slumped from 95% to 39%; the number voicing trust in them fell from 79% to 22%.

Employers have the upper hand these days, but what good is that if nobody is willing to bring their best?  Quality work doesn’t flow from mistrust.

The employment process is a two-way street.  Employers need to get quality ideas and execution.  The employees, however, are trickier.  They all need something different.  Each is motivated differently, has different goals and needs to be communicated with in a certain manner.

There is no magic bullet to engaging people except by taking the time to know what makes them tick.  Clearly, these economic times are tough.  And companies are taking the opportunity to pare back and let loose the dead wood.

This requires doubling down on the efforts to learn about the others in order to make sure they don’t all check out as well.

Better yet, build this into your process.  Don’t wait for dire economic times to trim the workforce.  Frankly, people who aren’t engaged and aren’t fitting in with the culture are a drag on your time and bring others down with them.

Start with who you hire and remember it.

1. Take the time to ensure those you hire fit your culture and are likely to remain engaged. RoundPegg can help you do this
2. Learn about what your new employees need during those first few weeks (they typically aren’t working on meaty projects yet anyhow)
3. Check back in regularly (aka re-interview)
4. Communicate your needs and how the employee helps solve them
5. Be quick to release those who aren’t working out.  Easier said than done, but failing to do so will cost you a helluva lot more than their salary

Times are dire.  Not just for the unemployed, but for the employers as well.

The job market is far more fluid these days and once companies start hiring again we’re guaranteed to see that fluidity in action.  Protect your most valuable assets and get the most out of them as you can.

Interviewing is hard enough.

But, last week I had a great meeting with a forward-thinking, culturally aware Corporate Development officer.  He was touting the benefits ofre-interviewing.

Put simply, it’s the company taking an active interest in the employee’s career development.

It’s something he does every 4-6 months.  And its purpose is to probe into whether people are getting what they need out of their job.  Whether they are heading in the right direction.  Whether there is anything that is preventing them from fully engaging in their job.

The cynic will say that it’s the company trying to extract more blood from the turnip.  And there is some of that.  But ultimately, the employment relationship is just that…a relationship.  You have to give in order to get.

By inserting himself into the individual’s career management process, he learns what they want out of the job and can help deliver upon that. How else does the company know what buttons to push in order to properly motivate?  (Hint: money isn’t usually it.)

To illustrate he told me the story of someone in the Corporate Development realm (aka HR) who really wanted to be an accountant.  She had been taking classes at night and had recently completed her certification.  While there wasn’t a position open, he was able to get her involved in projects with the AP/AR groups.

She was still expected to fulfill her duties in the HR space, but she eagerly took on the additional work because it was what she really wanted to do and because the company (and one individual in particular) was willing to take the time to understand what she needed to get.

A role may not open up and she may have to leave in six-months in order to find full-time accounting work.  But the alternative was losing her outright now and getting less out of her while she ‘secretly’ sought a new job.

It was an important arrow in his quiver to be able to better understand his team.  And a practice that motivates and engages his team.  If people are a good fit with your company’s values then moving them to a different seat on the bus is a no-brainer.  It builds goodwill and the sense of reciprocity fiercely kicks in.  These people become far more likely to go the extra mile that will make a difference to your business.

He made a few additional points that are worth sharing:

1. Don’t expect miracles the first time out. You need to build trustwith the employees that enables them to be candid.  Because without candor it’s a wasted exercise
2. Set the expectation that both sides come fully prepared.  Give the questions/topics you want to cover and expect them to have thought deeply about them
3. Honor these as you would executive meetings.  Don’t move them, don’t miss them and don’t show up expecting not to be an active participant
4. Be honest about what the company’s needs too.  If you foresee needing to do things differently bring them up now.  Better to understand if doing things differently is going to motivate the person who has to do the things differently

Do you do something similar?  What works/doesn’t?