Lessons from Building a People-first Culture

Entrepreneurs can struggle to achieve sustainable revenue and profit. Many factors contribute, such as pricing, product or market fit, sales strategy, and user experience.

But after 20 years of starting and growing multiple businesses with annual sales in the millions, I have reached one conclusion: successful, growth-oriented companies are all about people and culture.

Here are my four pillars for building a thriving company.

Hire Right

My entrepreneurial journey began 20 years ago after a painful layoff when I launched a web analytics consultancy in Silicon Valley. The first couple of years were bleak, but my partner and I gradually mastered sales and built a steady revenue stream. We realized, however, that we had to increase capacity to grow.

That’s when we hired our first employees.

Bad hires can derail a business faster than any other issue. They can drag down performance and erode the culture, creating a vicious downward cycle — the opposite of why they were hired.

I now follow three hiring rules:

Hire top performers, whom I call “A” employees. “A” people hire other “A” people, and “B” people hire “C” people. No “A” performer would want to work with mediocrity or, conversely, hire underperformers.

Hire for attitude before skill. In one form or another, this is what Herb Kelleher, founder of Southwest Airlines, and many other icons urge. In his book “Good to Great,” author Jim Collins phrased it as getting “the right people on the bus.” Regardless of the description, it’s imperative. Look for hunger to learn and the unique combination of competitiveness and selflessness that supports a rigorous yet supportive culture.

Learn, do, and then seek. I acquired this rule the hard way. Before you hire, develop a solid understanding of what you’re hiring for. Early on, I knew very little about selling to large enterprises. My partner and I rushed to hire a “seasoned” salesperson who brought in no qualified leads nor closed a single deal. We had to let him go after three months of wasted salary when we were cash-strapped.

Avoid this painful and costly mistake. Ask professional colleagues to recommend candidates, or enlist a subject matter expert to sit in on interviews. Don’t hire on your own for a professional skill you don’t understand.

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Behavior Modeling

Hiring a team creates a company culture by default or intention. And the owner is responsible for setting the tone and leading by example.

For instance, an owner who requires quick responses to customers must lead by example. Lecturing a team won’t suffice; the owner must model the behavior she seeks.

Continuous Learning

In our modern, tech-driven economy, knowledge is a primary — perhaps the only — competitive advantage. So owners who want their team to continually learn should demonstrate that behavior themselves, such as by sharing key takeaways from a conference or a book. Establish a system for learning. Set a budget for staff to take courses and attend trade shows. The owner’s actions guide the way.

Foster Ownership

Entrepreneurs frequently tell me they want employees to have a high sense of ownership. My response is to treat employees like owners.

Early in our business, when we had fewer than 10 people, I included our team in all major decisions. Everyone felt vested in the process and advocated energetically for what they felt was best for the company.

I also shared our monthly financials with the entire staff to show where we stood on planned versus actual revenue and profit. My partner and I committed to offering more benefits once we met or exceeded our profit targets, and we delivered on that commitment. Ownership in the financial sense was tangible, and so was our continued growth.

A people-first business committed to learning, collaboration, excellence, and shared rewards can break through barriers, work through slumps, and expand. A healthy culture can’t guarantee success, but in my experience, it’s a prerequisite for sustained growth.