Highlights:

• When scaling teams, you have to have a detailed plan, how to interview, how to make hiring decisions, how to onboard, but you have to accept that you will sacrifice some short term productivity as these processes can be time consuming.
• You must hire for culture and behaviours, not just for your benefit but also for the candidate
• With global and remote teams you must appreciate the different communication styles that predominate around the world.

Summary:

One of the biggest challenges for any fast growth, venture-backed VC is how to solve the intractable problems of scaling teams and organisations across multiple geographies. In particular how to bring on people at a rapid rate, while maintaining productivity and the integrity of the culture.

This article is based on an interview recorded earlier this year with Yvonne Agyei, Chief People Officer at GoCardless, prior to the current COVID-19 Crisis. Much of our conversation was based on prior discussions at our annual founder retreat in 2019. Clearly organisational and people management challenges are different in the current conditions, but we felt that the topics were still relevant. Yvonne was formerly the Chief People Officer of booking.com. Prior to that she spent 12 years at Google, latterly is the VP of global people operations.  Yvonne has a Bachelor's in Psychology from Stanford, and a Master's in Clinical Psychology from Northwestern.

You can listen to the interview with Yvonne in full here.

When scaling an organisation and bringing on many people, the most common reason for failure is simple, not having a plan.

Problems occur when people fail to approach any hiring, but in particular hiring at scale, as a project like any other. They open up lots of positions and bring on lots of recruiters and agencies, and just start bringing people in. In short they focus on filling roles, without taking the time to really think about what type of people they want to hire.

• What capabilities do they need?
• What skill sets?
• What attributes?  

Companies really need to do that homework before going into that period of high growth hiring.

Then you need to think about how you want them within the business. Sometimes two years is enough. Some businesses will take a different approach, “we want our people for life!” So you might then look for different skill sets or different attributes and different levels of experience accordingly.

So what goes wrong is when the thought, care and work doesn't go into first determining what type of people you need. And, and I don't mean just the different functional roles but holistically what characteristics you need that fit into your culture and the stage that the business is in.

If you end up hiring a lot of people that either are not going to fit your culture or are able to stay with the company it’s going to cause a problem. They may not even be in the right frame of mind, and you'll get high attrition or you'll need to manage them out. That’s all really costly and time consuming.

So typically what goes wrong? Hiring without a plan.

Is it possible to grow an organization in an exponential fashion without sacrificing culture and productivity?

To achieve a high level of organisational growth, you will sacrifice productivity, so you need to build it into the plan. If you are expecting to double in size, you will be doing lots of interviews, lots of scheduling, lots of feedback sessions, lots of decision making meetings. And that all takes time! And very often the people who are the best gauge of the sort of candidate that you want are your best performers.  And so you need to build in that you may need 30% or maybe 50% of their time spent on helping to hire people. Expecting them to be able to do that as a side job is not realistic.

You need to interview for culture and values and the way the company works, because if you bring in the people who are not aligned with your values and who don't fit into your culture that is going to alter the culture maybe in a way that you don't want and damage productivity.

Lastly you mustn’t forget that you have to invest in onboarding people. If you don't do that with care, that's where you can go badly wrong and productivity takes a massive hit.

At Google, every software developer spent 25% of their time on recruitment.

When I was at Google, around 2005-2006, we were on this incredible growth path, particularly internationally. And we were at that time hiring a lot of software developers. We expected every software developer would spend at least 25% of their time in recruitment activities. And so whether it was interviewing, or visiting graduate fairs at universities, the developers play an important role.  They were traveling and giving talks and had to log the time. But what worked really well about that was setting that expectation that as a corporate citizen, you're expected to participate in helping to grow the business and helping to bring in exceptional talent.

At the senior level, this can be done in different ways. In some organizations, it's highly centralized. And the CEO or founders may get involved in recruitment or maybe even in hiring every person that comes on board. That's a huge time commitment, depending on how many people you're bringing in. But in the early stages, it's absolutely worthwhile to do that.

The primary reason is culture, leading from the top like that sends a really good message to candidates coming in. So if they're coming into an organization of 50 people, and there's such competition for talent, to be able to meet directly with the CEO or with the founder says a lot. And that can help sell the candidate or close them.

Culture is hard to define, but of critical importance.

Culture is hard to define, but to me organizational culture is a set of rules - sometimes written sometimes not - that describe ways of working, expectations of behavior, how you communicate, how you spend your time, even how you organize your physical space. All these things combine to make a unique culture for every business.

In the early days, it's influenced a lot by the founders, by their personalities and the way that they like to work and the type of people that they bring on board. And so on that basis culture evolves and is organic.   When you come into the Gocardless office you feel,  “Okay, I understand what this company is about.”  I remember when I first came in to meet with some of the Gocardless leaders in January 2019. I sat for a while, just observing people. I saw people working together in small groups. I saw people moving very quickly across the office, I saw people together in conference rooms. And just in that 10-15 minutes while I was waiting for my interview, to start, I got a pretty good sense of what the culture of the organization is about. So it's some of those intangibles that you sort of know when you see it. And what distinguishes one organization from another.

You need to hire for culture

The first part is being really clear about what it is about your organization that makes people enjoy working there. Why are they there? What is it that they like? What motivates them and inspires them?   Those are the elements within your culture that you want to retain and as you grow you need to nurture those aspects. That could be anything from, "we have a transparent culture, where information is shared with everyone". Or it could be, "we like people who work in teams". The important thing is to notice them and define what they are.  Then when you talk to candidates, you want to make sure that they like to work in that same way to.

So if teamwork and collaboration is really important to your culture, don't bring in people who want to sit and work by themselves, they won’t enjoy it and probably wouldn't be a good fit.  It could come down to even the way you like to work. Some organizations are extremely flexible in terms of where people sit. Maybe people can work remotely at any time.  They have virtual meetings only get together every once in a while. That works for some people, it doesn't for others. So again it's important to understand those norms. So what I tell, leadership is, “let's distill what those things are, that we want to keep, and that we want to make sure that as we grow, we're able to sustain.”  And then when we bring in people, particularly at the senior level, you really want to make sure that they are aligned.  

Your culture will evolve and you need to communicate the edits, especially as you grow.

When you're really small, and you can fit everyone together in one room, you  don't need as many explicit rules or guidelines. It's clearly understood. We human beings are very observant!  When you're new in a role, or the company, you look at what other people around you are doing. You look at what they're wearing. How they behave. There are all these subtle clues of how fit in and we're very, very good at that.

Once you start getting bigger though you have to be more deliberate about writing things down, making sure things are documented, making sure people are inculcated into the culture or ways of working when they join as part of the onboarding process.

I was thinking about the talk that Gib Biddle gave on Netflix Culture at the Notion 2019 Retreat  and what I really liked about the Netflix example is how transparent they've been not just internally, but even externally.  

The next thing that struck me was how clear they were on behavior, “This is acceptable, this is not.”

What also impressed me was how they evolved the culture over time as their business has changed. They recognized that, "Oh, well, this used to work really well for us. But now we need to do something different". And they have been very explicit about that.

Now I'm not necessarily saying we should all emulate Netflix culture, it works really well for them. But it almost doesn't matter what your culture is. I think the approach that they use is brilliant.

The other thing Gib said that I thought was fantastic, that I hadn't heard of, but I think is so important is how they would use hypothetical discussions within the leadership team to test their culture. They would discuss situations and hold them up against their operating principles, and discuss, “what do we do in this situation?”.  That's a really practical way of making culture come alive. Otherwise, it can be really abstract. Knowing what happens when someone goes against the principles is so powerful, “what do we do?. Do we give them a warning? Do they get fired?”

Reconciling culture and behaviours with different norms from around the world is tough.

As our company grows, we're bumping up against very different cultural norms around the world. Gocardless London is a collision of cultures already. But then we’re opening up offices around the world.

The point is that you may have a company culture, but it's not monolithic.  Particularly as you grow and expand into different geographies, you've got a local culture as well, that comes into play. Local ways of working and how people communicate. There's lots of research done on this.

There are a few things to bear in mind: one is to accept that you will have a local flavour to the culture and that's okay. You can't mandate that people check their local cultures at the door. But there are ways in which you can strengthen that sense of corporate culture that equates to a sense of belongingness. So if we go back to what I said around testing for or assessing for alignment with your culture and with your values at the beginning, when you're interviewing candidates, and you do this consistently, what you'll find is that even though you have people who come from different countries or sitting in different geographies, they have certain behaviours in common, because you've deliberately chosen people who have that and then who are aligned with it.

In terms of engagement the other thing that comes to mind, particularly as you start getting bigger and as you're across multiple sites, is that you have to be even more deliberate about the culture and nurturing employee engagement. And so this could be things like creating budgets for team building. Or setting aside funding for people to visit other offices because you want that cross pollination of ideas. You want people to be able to come to your headquarters, and HQ people to go out and visit your distributed offices. Very often regional offices feel like second class citizens. And so having particularly the leadership come and visit and not just once, but to make it a regular stop really helps that engagement and that alignment back to your back to headquarters.  Maybe you onboard everyone together in one place, so they have that same experience.  That also connects people and creates that sense of belongingness to the organization.

As individuals we care deeply about the people we work with on a local basis and form very strong bonds within local teams that are likely to have some different behavioral norms. Finding ways to embrace that individuality around the world, while building your culture, is a really interesting challenge.

Managers play a critical role across different cultures and with remote teams.

How you select and train your managers around the world is so important for the local employee experience and motivation. You may have senior leaders who inspire, but it's going to be your day to day manager who's going to be working with an employee on their day to day work and career, asking important questions, “What do you want to do next? What's your long term goal?”. They are the only one that really knows that person? So I think the topic of managers managing is vital.

Then there's the challenge of managing across different cultures that's not talked about enough. Because it's such a challenge in some ways, and some people are really good at it. But you can also learn to be good at it. And there's some techniques that you can use. There is a very useful book on this subject called “Culture Map” by Erin Meyer that is incredibly insightful, as it describes the different communication styles and needs across cultures, for example on how to give feedback. Around the world people give and receive feedback in profoundly different ways.

One of the things that the people analytics team at Google found, on Project Oxygen, when researching high performing teams and what makes great managers was the impact that managers have on employee experience. You hear that old adage people don't leave companies, they leave managers? Well, they do both. But the point there is that having a great manager will keep somebody at a company much, much longer. We've been discussing corporate culture but people are also really connected to the people they work with. And having a great manager who's able to build great teams who's knows their team members individually as people, understands their motivations, and knows them personally as well as professionally is great  I can say, for myself, one of the reasons I stayed at Google for so long was my manager, Laszlo Bock, who was so supportive of me gave me stretch assignments. In some cases, he talked me into jobs that I would never have done on my own and thought I was going to fail miserably at and demonstrated a lot of faith in me personally, and it really felt like I had someone looking out for me. So if everybody could have this type of experience, and build teams that are working well together and are motivated you have sort of built in retention right there.

When you're managing across cultures,  the biggest challenge is communication and I’m not talking about speaking the same language but rather the difference between communication and meaning,  what I'm saying and meaning and what you're hearing and understanding. And depending on different cultures, it could be completely different. So I'm saying one thing, you're nodding yes, yes, yes, but you're actually hearing something completely different. And so having that awareness and being explicit so repeating back, “what we agreed is this,” and that's where you might uncover the, “Oh no, I heard something completely different.”

One of my favorite examples is I used to have someone on my team who was based in Japan and we were doing graduate recruitment. And he would always say to me, “no, you can't do this!”  And I'm thinking, “Yes, we will do this.” And again he says, “No, you can't.” I was incredibly frustrated. Everything I said, he said no to.

Then I went out to Japan and spent a week with him. We went to the various schools, he completely hosted me and ran it because I don't speak a word of Japanese. And what I realized is when he said no, what he was basically saying was, "This is not how it is done". In Japan, you have to take a completely different approach to reach the same objective.  We were speaking the same language, he was perfectly fluent in English, but just hearing different things. Understanding some of the local culture, learning as much from your team members who are sitting in different regions, not assuming that just because you're more senior, that you have the answers because you don't have the local context. And then the last thing I would say on this as well is I think, particularly when you have managers have employees in remote locations, so you're not sitting with your people, you have to try even harder and it's small things like altering your meetings so that you have a time-friendly timezone. Or if you're cross rotating, so it’s not the same person who is up at three o'clock in the morning making the call. I'm noticing things like that right, going out and visiting, taking extra care to learn about their family, right, because when you're so far away, you have to work that much harder to make sure that you have that connection, but making that effort really pays off.