The Double-Edged Sword of Cultural Fit

Remarkably, Stunningly, Homogeneous

Hiring people who fit your firm’s culture maintains the status quo. When you start out this is advantageous, because the sole goal is to find a market. Once the business expands and seeks growth beyond a network, diverse thinking is required to appeal to the widest audience. The timing of the transition may never seem right and this is why many mid-sized firms get stuck in a low growth cycle.

Adam Grant highlights two fascinating research findings in his Rethinking podcast:

• Startups with cultural fit scale faster and list earlier, but grow more slowly thereafter.

• Results-driven businesses thrive with a relationship-based CEO and relationship-based companies do better with a results-driven leader.

A Fintech CEO told me recently that he sees a massive blind spot in the industry’s hiring and onboarding processes. His belief is that team fit and attitude are determined by how new hires are treated, rather than by the hiring process. Yet the formal process in many firms results in teams being “remarkably, stunningly, homogeneous”.

I’ve seen the truth of this many times. In my Resolving Team Conflicts course I share a story from early in my career. I was working in Singapore for an investment firm and the young managers had a day’s training on personality types. At the end of the morning session we were not surprised to find out that we were all detail-focused and results-driven.

In the afternoon we got a shock when the senior leaders revealed their personalities. They were far more caring and conscientious and notably different from the people they led. Evolving from a line manager to a business leader involves a significant shift in how you see and treat people.

The challenge of change

The challenge is to know when and how to shift a firm’s culture. Sales growth is a good indicator. If it starts to slow, then doing more of the same is not going to deliver better results. The Magic Number is a rule of thumb for monitoring this. Thereafter, change is about hiring and onboarding processes, which if left untended can becomes routine.

Change is incremental and requires you to look for people who add to the culture rather than fit it. Here are three steps to do this:

• Hire for values not credentials

• Screen for outside interests

• Make space for diversity.

Hire for Values

The more emphasis you place on credentials and experience the narrower the choice of candidates. More people will apply for a role with a company that leads with its values than one emphasising specific skills. A job based on what you do is less appealing than one based on why you do it.

Screen for Interests

Interviews should get to the heart of a candidate’s passion. You want to see people at their most creative. I often ask sales candidates to sell me on something they are passionate about. This allows me to see if they understand the principles of selling and gauge how well they will do when enthusiastic about a product or service.

Space for Diversity

You must allow new hires an opportunity to shine. Without this people will start to speak, act and dress like colleagues, as they are absorbed into the culture. You must make sure you are protecting people who are different.

Techniques to do this include asking newcomers to present their career highlights when they join. This fosters a sense of worth and belonging. Then have them review the culture after a few weeks. For the first few months choose the projects they work on carefully and give them a platform to promote themselves.

At the end of my time at Liquidnet I had responsibility for broadening the firm’s appeal to clients by offering new services. I had a fancy title, but my colleagues struggled to see why they had to attend regular training and why the firm needed to evolve. The culture that had enabled the firm to grow, limited its ability to change. The result was it was put up for sale and left to a new owner to make the necessary adjustments.

Questions to Ask and Answer

1. Does my company hire for cultural fit or cultural addition?

2. Have we exhausted our networks and are sales starting to slow?

3. Have we developed onboarding and training that gets the most out of people?

Resolving Team Conflicts is a free email course that presents a new way of Managing and Motivating People. These skills are required to progress any career. A better understanding of people has the added benefit of making you more comfortable when marketing and selling.

Please give the course a try by clicking the link and forward this offer to someone who wants to develop their career.