At Blackbird, one of our obsessions is company culture. One of our three company goals for 2020 is to maintain our Culture Amp engagement score above 90.
For those who arenāt familiar, Culture Amp helps people to be their best at work by making it easy to collect, understand, and act on employee feedback.
Culture Amp is one of the most people and culture forward companies in the world, and Iām lucky to sit on the board.
1. Building a Culture First Company, by Didier Elzinga
āI think whenever youāre talking about company culture, it has to start with the importance of values. These are the roots. This is the most important job of a founder ā putting down roots and helping the company understand what it means to be. Values are not something that you go and design. Your values are already there. They need to be uncovered.ā
Fellow Culture Amp investor TDM Growth Partners has outlined in detail how they understand a company culture.
2. Nine ways to diagnose a companyās āPeople & Cultureā
One of the key things we look for is whether management take the opportunity to talk about culture on public conference calls. For instance, Hubspot CEO, Brian Halligan, rarely misses an opportunity to focus attention on this critical issue:
āWeāve got a very unique culture and great employees. Weāre a magnet for great talent. You go to Glassdoor and look at HubSpot, and weāve had thousands of employees rate us and weāre consistently 1 of the top 10 places to work in the world. I think thatās a hard one to compete with.ā
- Brian Halligan, Hubspot founder and CEO, Dec 2019, quarterly earnings call.
Paul Black, CEO of the $25B fund WCM Investment Management outlined their approach on Ted Seidesā Capital Allocators podcast.
3. Paul Black - Gratitude, Fun, and Growth Stocks (Capital Allocators)
āSeides: āSo you have these businesses with growing moats and then you also mentioned you started talking about culture. Similarly, how do you go out and really assess a company's culture?ā
Black: āI think that's one of the most fun parts of our job because nobody does it. You know, it's interesting. Yet, if you look at, read Phil Fisher's book, Common Stocks and Uncommon Profits, which again is one of the classics. It's interesting, I think he has a 25 point checklist on how to analyze a company and interestingly of the 25 point checklist, probably 15 points are all qualitative elements, which is just the reverse of what most people on Wall Street do.Most people spend 95% of their time crunching numbers, running DCF models, which by the way has zero competitive advantage because you have thousands upon thousands of people doing the same work. Where we can get a massive competitive advantages is by doing the things that other people are not.
ā¦
Now what you're doing, by the way, as you're building a mosaic, when you're going after culture, a lot of people don't do it because you can't quantify it, right? You can't put it in a box and score it and come up with a scale and a number ranking. You really have to build a mosaic.
This week, Sriram Krishnan (who also compiles this list of the best ever company memos) launched his new interview series The Observer Effect.
4. The Observer Effect, Marc Andreessen
āWe had decided one of the values of the firm is respect for the people we work with. And part of that respect is - we don't drop balls. We respond quickly and we have SLAs on getting back to people in a specific period of time. We use the old JP Morgan saying of āfirst class business in a first class wayā. If you contact us, you're going to get a response. If we commit to doing something, we're going to do that thing.ā
Andreessenās firm A16Z makes people pay money when they arrive late to meetings. His co-founder Ben Horowitz shared why in 2012.
5. Programming Your Culture, Ben Horowitz
āIn order to shock the company into the right behavior, we instituted a ruthlessly enforced $10/minute fine for being late to a meeting with an entrepreneur. So, you are on a really important call and will be 10 minutes late? No problem, just bring $100 to the meeting and pay your fine.āĀ
The fine is really just a brute force manifestation of the esteem that A16Z team members should withhold from each other for lateness.
āCulture is not like a mission statement; you canāt just set it up and have it last forever. Thereās a saying in the military that if you see something below standard and do nothing, then youāve set a new standard. This is also true of cultureāif you see something off-culture and ignore it, youāve created a new culture.ā
I think about the post Rules Aren't Norms all the time (H/T Matthew Dellavedova for the original recommendation). It contains one of the best tests I know of for diagnosing company culture - what actions could you take that would cause you to lose the esteem of your colleagues?
6. Rules Aren't Norms (On Better Meeting Hygiene)
āThe initial force behind norm creation is the desire individuals have for respect or prestige, that is, for the relative esteem of others. Withholding esteem is, under certain conditions, a costless means of inflicting costs on others. These costs are often extremely small... But...dynamic forces can cause the weak desire for esteem to produce powerful norms, sometimes because individuals struggle to avoid deviance, sometimes because they compete to be heroic.ā
I realised earlier this year that in my personal investing, I had ignored culture as a factor. And so I decided not to own any public company with a Glassdoor score below 4.0. This meant selling some companies I loved.
And it meant buying into companies that lead with culture more deliberately, like Infigen Energy.
7. Infigen Energy -H1FY20 Interim Financial Results
āIn H1FY20 Infigen conducted an employee engagement pulse survey. It showed an Employee Net Promoter Score of +55, alongside Job Satisfaction of 83% and Current Motivation of 86%, with 92% participation rate in the survey.ā
Related: Infigen backs $835m counter offer from Spanish renewables giant
8. Crowdsourced Employer Reviews and Stock Returns
In this recent study, high Glassdoor scores predicted company performance.
āWe find that firms experiencing improvements in crowdsourced employer ratings significantly outperform firms with declines. The return effect is concentrated among reviews from current employees, stronger among early firm reviews, and also stronger when the employee works in the headquarters state.ā
All of which makes my current fascination with SNAP an unrequited one.
9. Oh Snap! - The Next Great Platform Company Everyone Forgot About
āBecause there are so many pieces to the Snap puzzle, I feel like Iām still just scratching the surface. In addition to the suites around Bitmoji and Camera, Snap also boastsĀ Minis, Snap Map, Local Business Listings, Voice Control,Ā Snap Originals, Happening Now, Ad Kit, Story Kit, Creative Kit, and Login Kit,Ā and Iām sure Iām missing some.
Snap might be the first American company to become a WeChat-style super app.ā
Related: Snap Partner Summit 2020: Recap and Reflections
10. Michael Pollan on Ego Death
I was struck this week by this clip of Michael Pollan describing the āironic cynical perspective that we bring to our everyday livesā.
āWe have these mental algorithms that organize our response to everything, and sure, that's very efficient, but [they] blind you to experience, [they] blind you to everyday wonders.ā
Three weeks ago, in I've been through a lot, and I want to make something of it, musically, I shared this David Foster-Wallace quote:
āWhat passes for hip cynical transcendence of sentiment is really some kind of fear of being really human, since to be really human [...] is probably to be unavoidably sentimental and naĆÆve and goo-prone and generally pathetic.ā
Iāve been thinking a lot about the middle phrasing: āto be really human is probably to be unavoidably sentimentalā and trying not to tamp down on myself when there is a moment to feel that way, like this week when my son crawled for the first time.
Now, Iām not advocating for psychedelics here (as Pollan is), but I am saying you should watch this compilation of golden buzzer moments from America and Britainās Got Talent, and especially pay attention to the kids at 42:52 who will move you in a profoundly genuine, and surprising way.
Real quick:
āIf I told you that a flower bloomed in a dark room, would you trust it?ā
Iāve been on a Kendrick Lamar deep-dive this week.
In terms of timeless artists from this era, he will be one.
āI count lives all on these songs
Look at the weak and cry, pray one day you'll be strong
Fighting for your rights, even when you're wrong
And hope that at least one of you sing about me when I'm gone
Am I worth it?
Did I put enough work in?ā
āI'm not sure why I'm infatuated with death.
My imagination is surely an aggravation of threats
that can come about 'cause the tongue is mighty powerful.
And I can name a list of your favorites that probably vouch.
Maybe 'cause I'm a dreamer and sleep is the cousin of death.ā
From The New Yorker: Kendrick Lamarās Lyrics Get the Images They Deserve in the Video for āELEMENT.
āYou even FaceTimed instead of a hospital visit
Guess you thought he would recover well
Third surgery, they couldn't stop the bleeding for real
Then he died, God himself will say, "You fuckin' failed"- U
From Wired: Kendrick Lamar's Genius Isn't Just VerbalāIt's Visual Too
From 2015: Has Kendrick Lamar Recorded the New Black National Anthem?
āSee, in aĀ perfect world, I would be perfect, world.ā
- Pride
From Hypebeast: Kendrick Lamar's "Alright," Childish Gambino's "This Is America" & More See Boost in Streams During Protests
Related: Song Exploder takes on Mobb Deepās āShook Ones Pt. IIā