By Mark Homer
Jabez and I, as founders of GNGF, wanted to make sure that we had a great company culture from day one. And while we had very good intentions, in looking back five years later, I can see that we stumbled a few times along the way.
We made mistakes that other startups, and even more mature companies, make, and we’ve grown from them. And over the last couple years, we have been honored to receive awards such as the Cincinnati Business Courier’s Best Places To Work and the BBB’s Torch Awards for Marketplace ethics.
Due to this success, I was recently asked to co-present at a local business incubator on Building a Winning Startup Culture.
I strongly believe (and the data backs me up) that all businesses—including law firms—can become more successful if they focus on and improve their company culture. Because of that, I thought I would share some highlights from the presentation along with some lessons learned on what we did wrong in the beginning and what I think we do much better now.
Why is company culture important?
Overall business performance.
A business needs to grow and be profitable if you are going to be around for a while. Fortune Magazine has a “Best Companies to Work For” list each year and they provided this data point in 2015: “Since 1998 the 100 Best Companies have outperformed the S&P 500 index by a ration of nearly 2 to 1.”
Take a second to read that again—2 to 1. Imagine if you could create a better place to work and grow twice as fast as your competitors—who wouldn’t want that?
Employees at small businesses—at your law firm this includes attorneys, paralegals, and office admin staff—are incredibly important.
The Society for Human Resource Management (SHRM) says that at large companies the total costs associated with turnover can range from 90% – 200% of the employee’s annual salary.
The lower percentage is associated to lower wage jobs ($30-$50k) and the higher number is for professionals (lawyers would fall in this category) and leadership.
However, at small companies, people wear many hats and have awareness of all the undocumented areas of your firm (such as processes, clients details, and vendor relationships). Replacing that knowledge is incredibly difficult.
A study on employee engagement said that, “Employees who are ‘engaged and thriving’ are 59% less likely to look for a job with a different organization in the next 12 months”. As a fellow business owner, I like the idea of not just creating a more enjoyable place to work each day, but better performance than my competitors, and a team that is significantly less likely to be looking for another company at which to work.
At GNGF, when we first started, we felt that a strong startup culture would be a work hard/play hard culture. Therefore we rewarded and appreciated those who seemed to be burning the midnight oil and also sticking around for office happy hours. We supplemented this with coffee, red-bull, food (and beer) at the office to allow people to stay in the office and ‘work hard’.
However, while we were focusing so much on meeting client needs while growing the business at a rate of almost 100% year over year, we looked to quick fixes like happy hours, hammock chairs, and yes, even a ping-pong table, to improve our culture and try to keep our team in tact.
A couple years into our growth, we had a year of unexpected turnover. In hind sight, we should have done a little more research and focused on the main reasons people leave a company, which are:
- Job characteristics not a fit/match
- Opportunities for Growth
- Work Environment
Now that we understand this, we have begun to refocus our culture around core company values and making sure we are improving on the above key factors. I will address what we are doing for each item.
Job characteristics not a fit/match
I like to think about this item as a hiring issue. Early on, we had to hire a bunch of people quickly and we just focused on if there was a little bit of skill fit and the person seemed like a fun and nice person. That led to people with the right skills but not the right value fit or people with the right values but not the best fit for the position. We switched our process to identify the perfect background of skills and experience that would be a match for the position and during the interview process we spent a lot of time talking about the position, the day-to-day and the challenges. We didn’t want to sugar-coat anything. Furthermore, we spent time creating questions that would help identify congruence with or against GNGF’s core values. Our experience to date has now shown that the more honest we are about the challenges of the position, while focusing on hiring someone who has a good match to our core values has led to much better team members.
The saying goes that people don’t quit jobs, they quit bosses. From all the research we have done, it seems that a key issue with poor managers that many don’t take the time to build a trusted relationship with their direct reports. The other item is that managers often get promoted because they are good at their job not because they have skills to be a good manager. We made some of these mistakes early on at GNGF. We promoted someone because they were great at their core job, not even thinking about the fact that they were a heavy introvert and liked working on their own – those traits were fine for their position but are not skills you want in a great manager. As we figured some of this out, we added training and mentoring for new managers. We also implemented weekly one-on-one meetings between a manager and their directs. The key purpose of that meeting was not for status updates, but to build a trusted relationship and spend time on the concerns, questions and professional development of the team.
———– NEXT MONTH WE WILL FINISH THIS SERIES GOING OVER THE OTHER THREE CHARACTERISTICS WE ARE WORKING ON AT GNGF AND ALSO PROVIDE SOME RESOURCES IF YOUR FIRM IS ALSO INTERESTED IN FOSTERING A GREAT AND PRODUCTIVE COMPANY CULTURE. —————–