We have a Ping-Pong table, which means we must have good culture right?
Unfortunately, company culture is not as simple as the bliss and grace afforded by one of the world’s greatest office sports. Or a bean bag for that matter.
Instead, you need glue that brings people together. Glue that pulls people to interact in a certain way, to help employees think about their career direction, and what they can expect from the company they work for.
In the case of Kabbage, a leading technology and data platform that powers automated business and consumer lending, Amy Zimmerman, Global head of People is responsible for creating that glue.
She believes herself to be nothing like the traditional HR professional, and that when it comes to shaping company culture, hiring is everything.
“The founders knew I was very casual in my approach, that I was almost the antithesis of a typical HR person. This was perfect, because they wanted to avoid the traditional HR perspective,” Zimmerman begins.
Hiring is critical when shaping company culture
In response to a question focused on what she believes a traditional HR perspective to be, Zimmerman explains that it can be characterized by a one size fits all mentality when dealing with people.
“In my opinion, this could be one of the business worlds biggest mistakes. People are typically the most expensive investment yet companies do little to invest in figuring out what makes them tick.”
Zimmerman continues by explaining that this, “leaves employees feeling as though they are taken for granted by organizations,” making the shaping of company culture very difficult indeed.
“We spend billions of dollars annually on maintaining our cars and homes to prevent expensive repairs, but we don’t invest pro-actively to head off the high price tags associated with productivity issues, morale and retention issues.”
Fixing the foundations
For Zimmerman, shaping company culture starts as soon as candidates walk through the door.
In an approach taken by a number of startups, Zimmerman opts to sit alongside the founders as they interview virtually every person who works at Kabbage.
It’s a great way to ensure all stakeholders wish to work with those being brought in.
Harvard Professor Noam Wasserman suggested that 75% of venture backed business fail, and of this 75%, two-thirds come as a result of poor team dynamics between the individuals working at the company.
It highlights the importance of the first hires in the continuation of a businesses original cultural vision.
With this in mind, Zimmerman and the co-founders instilled a “no asshole policy,” from the very beginning, something they attempt to address in final round interviews.
“Usually, this final interview isn’t finding out whether or not someone has the skills, because by the time they reach this stage we assume they have what it takes.”
“We just want to ensure they fit the no asshole policy. It’s a huge part of why our culture has been so successful, because we’ve paid attention to some of the things that are important and core to who we are as a company from a cultural perspective.”
EQ not IQ
One of the more salient personal attributes Kabbage search for is something known as EQ or Emotional Intelligence.
Zimmerman believes the best way of illustrating this is through a typical interview question pertaining to a time a candidate has succeeded.
A regular candidate will give a one-dimensional answer usually taking the form of cause and effect.
An individual with a high EQ would then take this a step further, not only providing cause and effect, but also how and why it impacted them and how it helped the company grow.
Nobel prize winning Israeli-American psychologist Daniel Kahneman studied EQ and found that people would rather do business with a person they like and trust over somebody they don’t, even if that person was offering a better product at a lower price.
His theory was put to the test and highlighted by Hay/McBer Research and Innovation Group.
At a large national insurance company in 1997, they found that sales agents weak in emotional areas such as self-confidence, initiative, and empathy tended to sell policies with a lower average premium ($54,000) than those who were strong in the 5 out of 8 emotional competencies set by the study, who sold policies with an average worth ($114,000).
With EQ “it’s about being self-aware, understanding strengths and weaknesses, understanding how to work with disparate people effectively. It is absolutely crucial. To me, someone that is really smart but doesn’t fit and has a low EQ can be an absolute toxic addition to culture and can destroy a team.”
Despite looking for this attribute, Zimmerman admitted that there have been times where candidates slipped through the net.
“Sometimes everyone can see a candidate as being so good that their lack of EQ just slides past all of us. There have been times when we thought candidates were perfect, and it ended up being a disaster.”
“It’s just expensive and time consuming, and if it’s bad enough you can lose other members of the team. For me that is why hiring is critical when shaping company culture.”