This post is part of the “Small Business, Big Ideas” series, in which business leaders, entrepreneurs, and innovators share their stories of overcoming obstacles and achieving success. “Small Business, Big Ideas” is sponsored by Chase.
In early 2010, LivePerson, an online customer service company, was doing great: It was growing rapidly, had the leading product in its area, reached around $100 million in revenues, and had around 400 employees.
It’s been described as “one of the most successful New York-based Internet companies that no one has ever heard of.”
They first started in 1992, and managed to survive the tech bubble when almost no one else in the New York tech world did.
But to its CEO, Robert LoCascio, something didn’t quite feel right. “I could see that there was a break point where things were changing culturally,” he said, “there was this level of middle managers, and it was all about top down reporting structure.”
It got to the point where when somebody had more than 10 people to manage, they started to expect someone to help them break up the reporting structure. Things were starting to become hierarchical and siloed, and that wasn’t the vision he had for the company. And if it was a problem now, how much worse could it get as that layer of middle management grew along with the company?
“I felt like there had to be a different way to do things,” LoCascio said. Even though the company was doing well, he made a decision to completely revamp his company’s culture.
To do it, he met with and studied companies that he felt weren’t just great companies, but outstanding ones because they had strong core values and an extremely identifiable culture. His examples were places like Zappos, Google, and W.L. Gore.
As LoCascio explained it, often the way companies try to create corporate values and culture is from the top. The CEO or an executive group comes up with 10 or so items, and they’re usually vague platitudes like “customer first” and “be creative,” and “teamwork.” Employees will generally ignore those because they haven’t bought in.
Instead, LivePerson had all of its employees participate, sourcing suggestions for core values. They came up with about 40, some of which were the usual ideas. Then they came together as a company for about a week to think about them and narrow them down.
The result? “We came to the conclusion that customer first and innovation and all of that stuff, they’re kind of natural at a great company, we didn’t need to be told about these things, it’s almost like a human being breathing.”
So the end result was two values in one simple statement: “Be an owner and help others.”
Those are two values that encompass a lot of the 40, LoCascio says. Being an owner is about being innovative, entrepreneurial, and taking risks for example; and helping others is about teamwork, building connections, and being able to rely on your team.
His hope is that this will create a company that will be sustainable, even under new leadership, and a culture where people “won’t rely on people getting permission to do things.”
They’re two values that connect to the company’s core mission, which LoCascio describes as “creating meaningful connection.”
And because there are only two, people can remember them, and actually try to live up to them.
But values mean nothing if people don’t actually commit. And transforming a company’s culture isn’t an easy transition. ” Change is always confronted by resistance,” LoCascio said, “its the nature of human beings.”
The fact that everybody participated helped, as did the fact that the entire company voted on the values. If 90 per cent of the people agreed that the company could and should adopt and attempt to live up them, then those two values would be part of the company. About 91 per cent voted to adopt them.
Not everyone did though. “There were people that just didn’t believe in it,” LoCascio says, “and what happened over time is that they ended up leaving or being asked to leave.”
Now, the company tries to make sure everyone’s on board from the start. “When we hire people, we hire with the idea of our core values first and then who they are as a technical person, say, or a functional person second,” LoCascio said.
That’s similar to what Zappos CEO Tony Hsieh famously does at Zappos.
One of the most important lessons that helped guide the transition came from visiting Zappos and Hsieh. LoCascio went to visit before he even started. “I flew out to Las Vegas before I even got started with the culture stuff and saw what they did,” LoCascio said. “(Hsieh) said, ‘It’s a five year commitment, if you’re going to do it. It’s a five-to-lifetime commitment, it’s not a two-year execution and you’re done. If you want to take it on, you’ve got to be willing to put that type of time into it.'”
In the end, creating a great corporate culture where everyone is involved is about realising that as a CEO and company leader, you aren’t superman. You can’t come up with everything yourself. Usually, that leads to something inferior.
“Our company is really about the people who work here really driving ideas. You can’t have scale unless you’re Steve Jobs, and I’m not Steve Jobs,” LoCascio said. “You can’t, at scale, build product from the top down., I have a vision for the company and you need everyone involved in the process.”
Sometimes in order to make a company successful for the long run, you have to make difficult cultural changes, then work every day to make sure they stick.
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