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February 04, 2015
Return on Culture (RoC): A worthy obsession
At Clari, culture matters. A lot.It’s not because we’re young and building our culture day by day. (We are.) It’s not because we want our incredible team to be happy at work. (We do.)
It’s because the right culture will make us a wildly better company. Everyone says that. But we may think about culture differently, so I’d like to open up about our approach and leave it to you to decide.
Return on Culture (RoC)
Let’s start with the title: Return on Culture. At first, Return on Culture (RoC) sounds like a pompous way of saying, “the benefits of culture.” But I take the phrase seriously because RoC is every bit as worthy of management attention as traditional Return on Investment (ROI). With the right culture, delighting customers comes naturally. So does beating investor expectations. Culture sparks better work, clearer thinking, and better teamwork. If I can’t convince you, maybe this piece by Bill Aulet in TechCrunch will — he’s a passionate convert to the power of culture and talks about his conversion.
I measure RoC all the time. Yes, it’s anecdotal. I have no problem with that. I start with the cost of an initiative in time and money and evaluate results like team buzz, enthusiasm, participation, and — most important — did the action lead to other actions? Let’s get specific: expensive monitors and chairs? High cost for little long-term excitement. Don’t get me wrong, monitors need to be enormous and clear. Chairs need to feel great in the 14th straight hour of coding. But high RoC? No way. On the other hand, we “invested” in a piece of string to hang a few meaningful ideas from Martin Luther King, Jr. on his birthday. Our team welcomed the inspiration. When the Superbowl was close, that string held Patriots and Seahawks flags, plus a heads-up about our football pool. I can’t wait to see what it holds next. We now realize: it’s not a piece of string. It’s a beacon broadcasting themes that matter to us as a team. What’s the RoC on that piece of string? Let’s just say, “High.”
Unfortunately, elevating culture can be hard because you can easily see the drivers, but not the outcomes. You look around and see the things that create culture — the environment, new employee orientation, weekly company meetings, offsites, etc. But the outcome is individual behavior and behavior isn’t as obvious. How do employees show respect for each other? Or support a frustrated customer? Or decide when a feature is “good enough” or still has room to be great? Or deliver extra effort simply because they realize their work is needed before another person can make progress?
We have incredible people at Clari. They don’t need me or anyone else telling them what to do. They’re already super motivated and talented. They just need to know what matters most for the business. Then culture takes over. A strong culture encourages each of us to take initiative. And culture is a guide on how we get things done — together, with integrity, speed, and a shared view of where we’re going.
When you see culture as this sort of guide — how we get things done — I get incredibly excited. With both our company and our culture, we get to create something from nothing. You probably know our mission is to create software business users love. Not just use. Love. I’ll openly say my goal for our culture is similar: a culture our employees love, remember long after they leave, and work to replicate everywhere they go.
So what’s the overall RoC?
What’s sometimes lost on young execs and entrepreneurs is how much friction a great culture eliminates. For example, we’ve all seen organizations where people only object in the hallwayafter the meeting. Yet direct communication and seeking to understand before popping off with your own ideas means speed and getting things right the first time. In our industry, that can be the difference between a company thriving and dying. When culture eliminates friction like this in dozens of ways throughout the organization, it delivers an extremely high overall RoC.
Enough intro. How do we build a great culture at Clari?
We’re data-driven at Clari, so it won’t surprise you to hear I’ve got a mental model of culture. Three areas rise to the top as priorities for me personally, for our execs, and for our entire team. Each area of culture development has it’s own “costs” and delivers it’s own value, so each has it’s own RoC.
1. Perks and comp: Make it easy to say “Yes” (10%)
There is a blazing war for talent. So let’s get the “forget culture and focus on money and perks” argument out of the way. If you came across Perks don’t work at TechCrunch, you know this is a hot topic. Here’s how I see it: money matters. Full stop. Our engineers are incredible. They literally build value with every line of code. They deserve a great comp package and they get one at Clari. Free lunches? Check. Flexible hours? Check. Whatever vacation time you need? Check.
That said, if you think money alone is enough to attract and motivate your amazing team, you’re new to the Valley. The Beatles had it right.
So perks and comp are only 10% of the thinking because it’s not the place to try to be clever. Every member of the team has long-term plans and needs family security. Don’t play games. Be competitive. Be fair. Then move on to the more important things below.
What’s the RoC on perks and comp?
The right people join. And the company can focus on the things below that matter even more.
2. Team Building: What we do together and how we feel about each other (40%)
Team building starts with physical space, grows with the welcoming attitude of the team, and comes to life in how the team works and plays together.
Let’s start with the environment: How do you feel when you walk in the door? Does it feel welcoming? Do people enjoy working together? Are meetings productive? What’s the energy level? In my experience, an inspiring office is more creativity than cost. It helps for the office to be top of mind for someone. For example, our office manager, Linda, is fantastic at this. But it takes a village — and having an entire team proactively pitching in makes your office come alive in creative ways no single person could ever imagine.
Doing great work together is what first makes a team, but roots get deeper when people know each other in multiple ways. At Clari, this means a weekly Ultimate Frisbee game at Eagle Park, the race up all 12 stories of 444 Castro [our 1st office], the bowling contest at 280 Hope [our 2nd office] using empty Alhambra bottles and soccer balls (and yes, we broke some shit), or the broad jump contest at 100 West Evelyn [our current office] — it’s crazy how far Xiaolong can jump! There’s also hiking, overnight retreats (no, they’re not that expensive), campfires, volunteering for those in need, team workouts, ping-pong tournaments, weekend bike rides, nicknames, and more.
There’s no perfect list. Your work environment (aka where you spend most of your life) has to fit your team and be real. But it’s also not random. It usually needs deliberate action by the executive team for a while, then it becomes organic. How do you start? Keep things visible, light-hearted, team-oriented, celebratory, and fun. Get everyone involved in creating new ideas. Take it seriously. But don’t be too serious. You’ll do fine.
Trust: the Core of Team Building
Team building is also about trust — the most powerful foundation a company can enjoy. Can I trust my colleague to be straight with me? To have my back? To deliver on promises? To share my sense of quality and mission? To share my commitment to customers?
When a group consistently collaborates, innovates, and holds each other accountable, you can bet trust is their secret weapon.
How do we build trust? Open communication that comes from caring and support. For example, our weekly, full-company meeting is not just good news. We share bad news immediately, both to encourage openness and to get everyone thinking about ways to help. We share details on every deal, every product issue, and every penny we spend. We’re quick to celebrate success and just as direct with supportive suggestions when a colleague needs to step up their game.
It’s critical to add that trust isn’t just about management actions, it’s about personal connection. At Clari, it’s knowing everyone’s kids’ names, it’s when that Ultimate Frisbee game extends into drinks… and then poker, it’s having each other over for dinner, it’s when the best seat for the National Championship is next to the big screen in the lab (it was). It’s not just what your team brings to the table between 9 and 5.
When are you on the right track in team building? When the team is on a roll, producing incredible products and programs, and enjoying their (sometimes long) work days. When it seems normal to spot smiles and laughter in a conference room. When teammates choose to work together again and again (like the Clari management team — on our third company together). When people care so much about each other that you can feel the sincerity as they celebrate each other’s victories. It’s about having a work-life blend, not a balance. Getting there is hard. But it’s worth it.
What’s the RoC for team building?
High in the short-term. The benefits are real and the cost can be relatively low. But in the long term, the RoC on team building still takes a back seat to the last piece.
3. Personal Growth: Is every person becoming a better version of themselves? (50%)
The personal growth of people on our team motivates me as much as or more than the growth of the company. This trumps everything else about how I operate and how I push my execs to operate.
Let’s be clear: I know my job is to help Clari thrive. I owe that to our investors, customers, and team. But that’s not what I think about and talk about all the time. My dream — one I’ve made part of my executive team’s objectives — is that people look back at the end of a year and are blown away by what they’ve done. Yes, I want them blown away by the success of the team and the company. But what really gets me going is that each team member looks back and realizes they did extraordinary work even they didn’t know they could do.
Wanting to help people to become their best self isn’t new and it’s not unique to Clari — heck, “be all you can be” was an army slogan for 20 years. But we are committed to it. It means taking risks, so making mistakes has to be OK... but not repeating them. It means driving people to stretch, with each of us knowing if we fall down, someone has our back. And it means straight talk about what’s working and what’s not. Straight talk doesn’t have to be hostile, but it has to be straight. False encouragement doesn’t help a top performer grow.
I’m just scratching the surface on how to create a culture of personal growth. You can’t build a culture like this from reading a book or, for that matter, reading my post. You have to care, try incredibly hard, and experiment. Managers need to embrace the idea that their own personal growth is compelling, but seeing personal growth in people reporting to them can be the highest reward. If you commit to this in your organization, you won’t feel change daily. It will take a year, maybe two. Many startups don’t think they have time to focus on this — but companies with serious ambition don’t have time not to.
What’s the RoC for personal growth?
Amazing happens. You get a formidable ability to compete, power through dark times (and there can be many), roll with inevitable market changes, and maintain a united team throughout. Although the dollar costs are not high, the time and commitment are constant. But if you want a remarkable company, you need a remarkable team. Pretty simple really.
Does Clari have this ideal culture?
I’ll tell you right now: we’re not there yet. We’re young and growing, and we need to be better. At the same time, culture is like product quality or customer sat. It’s never done. We can always improve. So we’re not where we want to be, but we’re on our way. And this is where you come in.
If our commitment to culture resonates with you, my final message is directly to you: please join us. Yes, you’d be hopping on a roller coaster, with ups, downs, and plenty of sharp corners taken at high speed. But Clari people (“Clarians”) have something special in them. Something deep in their DNA that makes the turbulence part of the fun. And every person joining the team helps make the downs rarer and the ups higher. It’s still early, but I’ve been lucky enough to see this movie before — and it feels like we’re on our way to amazing. Are you even a little intrigued? Give us a call. It’s just lunch. Or maybe a hike.
Final note, take another minute or so to get a glimpse of our culture in action: