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The foosball table is killing your startup

Posted by Adam Robinson on October 16, 2014

When it comes to culture creation, there is no substitute for authenticity. startup_culture

Whenever I ask someone to describe “startup culture,” I typically get back a checklist of “cool stuff:” Video games in the office. Free catered lunches.  A cool, lofty workspace. Lots of Nerf® guns. Casual dress. Mascots.

In my experience, these things sometimes exist at well-run VC-backed startups, and they almost always exist at poorly-run VC-backed startups. Peel back the culture at funded but poorly-run companies, and you’ll discover what’s missing:

Authenticity.

Authentic culture is really easy to spot: you can feel it.  It’s inescapable, invigorating and infectious to those who are a part of it.  Vendors arrive for meetings and leave feeling like they want to quit their job and come work there.  People absolutely love what they’re doing, and you get the sense that most people would do just about anything to help their teammate or their company achieve success.

Manufactured culture is easy to spot, too: You’ll see all the accouterments of a startup, but feel none of the energy.  There’s the de riguer open-layout office design, but nobody is talking to one another. No one is smiling, and you’ll watch people take their plate of catered food and go back to their desk and eat it while reading Buzzfeed with their headphones on.  There’s the foosball table nobody uses, because managers shoot dirty looks to the employees when they use it.  Emails are sent from leadership commenting how they can’t believe the office is empty at 5:15 every day.

A recent article in the Wall Street Journal highlights the growing evidence that companies are trying to win the talent war with manufactured culture:

“Free catered lunches cost about $12 a person each day. A $2,000 custom-designed standing desk may seem unnecessary. But some investors and founders say that such intangibles can help startups nab the best talent, who may be considering several job offers."

“No one wants to lose a candidate over the last emotional mile,” says one VC partner quoted in the article.

True, but do I want someone to join our company based on ham sandwiches and exposed brick, or do I want a company full of die-hard evangelists who share our vision for transforming our industry?

The root cause of manufactured culture is, paradoxically, created by highly-focused and hard-working founders. Most entrepreneurs live on high-fives and coffee until they get the funding they need to scale the business. The first people who join them are True Believers.  They eat ramen and skip sleep, and they work their butts off.  When the company defies the odds and achieves liftoff – and gets a big slug of VC money to scale the business - the team must expand rapidly.

The problem is, the business might be ready for scale, but the culture is nowhere near ready.  Investors rightfully expect massive growth, but the entrepreneur can’t attract the talent they need to deliver it.  None of the new hires seem as passionate about the company as the True Believers. The founding team gets nervous. Predictably, they begin to spend a fortune constructing the façade of a great culture and overpaying for talent. “Hey, work here! We have Taco Tuesdays!” 

But when the going gets tough (and it always does), the team that was lured based on game rooms and launch parties are going to peace-out at their first available opportunity.  The cash gets tight, the perks stop, and there’s nothing left to hold people’s commitment.   The culture wasn’t authentic; nobody was there for the right reason.

Authentic culture starts with authentic core values. What’s a core value?  It’s a statement that declares something your company believes, one facet of the way your company chooses to conduct itself in this world.  A core value is non-negotiable, and it never changes.   It’s an invisible hand, guiding every decision that every person (yes, including you) makes in the organization.

Core values can lack authenticity, too. Does your management team let employees slide on delivering what they promised? If yes, don’t say that “accountability” is a core value.  Are you giving your customers a refund every time one is requested, regardless of the reason? If you’re not, don’t say that “the customer is always right,” because your decisions don’t reflect that value. Does your management team really trust employees to get the job done, no matter what, regardless of the time of day the work is being performed? If the real answer is no, don’t buy the foosball table.  Everyone will see that it makes you angry when people are playing it at 2:15pm on a Tuesday, and it will become a visible symbol of your inauthentic culture.

Most importantly - are you willing to fire a top-performer for violating a core value of your company?  If the answer is no, it’s not a core value; it’s a statement that someone thought sounded good but nobody really believes.   This dissonance will erode the esprit de corps of your organization, and it will lead to consistent under performance over time.

Entrepreneurs can’t buy an authentic culture, but they sure can burn a giant pile of money trying. From the WSJ article:

“I have one CEO who is building an octagonal, mixed-martial-arts cage-fighting ring because one of his employees asked for it.”

I mean, really? That’s the kind of stuff that happens when a company can’t get people to buy into a compelling vision, and is forced to bribe people to work there. I’ll pass on “Get Your Ass Kicked at Work” day, thanks.

Commenting on culture, Peter Thiel nails it:

“Anybody who would be more powerfully swayed by free laundry pickup or pet day care would be a bad addition to your team.  Just cover the basics like health insurance and then promise to what no others can: the opportunity to do irreplaceable work on a unique problem beside great people.”

Don’t get into an arms race with your competitors about whose catered lunch is better.  Don’t win with a foosball table. 

Win with authenticity.

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Adam Robinson is the CEO and Chief Hireologist of Hireology. He co-founded Hireology to help companies make better hiring decisions through data and better technology.

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Adam Robinson

About the Author

Adam co-founded Hireology with the mission to help growing companies make better hiring decisions through data and better technology. Adam is passionate about entrepreneurship, donating time to a number of organizations that support the entrepreneurial cause. Adam completed his undergraduate study at the University of Illinois at Urbana-Champaign, and received his MBA from DePaul University in Chicago, IL.