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Companies sink or swim based on their internal culture. One bad hire can have a huge effect on morale, productivity, and ultimately, the bottom line.Brad Feld, co-founder of startup accelerator TechStars and managing director at VC firm The Foundry Group, says that too many startups focus on hiring for competency over cultural fit. “Many people default into choosing people who have high competence but a low cultural fit,” he writes. “This is a deadly mistake in a startup, as this is exactly the wrong person to hire.”
Instead, leaders should hire people who see the much bigger picture, and can truly help a company thrive by aligning their career goals with a company’s values and mission.
One of the most influential leadership books in recent years, Tribal Leadership, shows just how important culture is over nearly anything else — even a brilliant idea. According to the authors, there are five stages of leadership and culture, with the 5th leading to a “no fear” environment that inspires innovation and maximum productivity:
“Tribal leaders focus their efforts on building the tribe — or more precisely, upgrading the tribal culture. If they are successful, the tribe recognises them as the leaders, giving them top effort, cult like loyalty, and a track record of success. Divisions and companies run by Tribal Leaders set the standard of performance in their industries, from productivity and profitability to employee retention. They are talent magnets, with people so eager to work for the leader that they will take a pay cut if necessary.”
Authors David Logan, John King and Halee Fischer-Wright lay out the dramatic effects of a positive culture with the right hires, including:
- Fear and stress go down as the “interpersonal friction” of working together decreases
- People seek employment in the company and stay, taking the company a long way toward winning the war for talent
- Organizational learning becomes effortless, with the tribe actively teaching its members the latest thinking and practices
- People’s overall health statistics improve. Injury rates and sick days go down
- Most exciting … is that people report feeling more alive and having more fun
Zappos CEO Tony Hsieh runs his billion-dollar company based on similar “tribal” values. He says that, in the early stages of launching Zappos, “bad hires cost us $100 million.” Now, Zappos hires and fires based on whether someone is a distinct culture fit. The key is knowing that no matter how ingrained a person is within a company, if they’re adversely affecting morale, chances are they are also adversely affecting the bottom line.