Lessons from Airbnb and Bain: How Influitive Thinks About Culture, Performance, and HR
For the longest time, businesses viewed HR as a necessary evil. Like internal legal compliance, HR was considered a procedural obligation. It was all about respecting workplace practices and employment regulations. No one saw HR as a competitive advantage. And to be honest, I was also one of these people. I never thought about investing in people the same way you invest in other parts of your organization. Three years ago, if you told me I would lead an HR team, I would never have believed you.
That is because yesterday's HR professionals were all about risk aversion. They enacted policies to ensure companies weren't breaking the law and wouldn't get sued. Getting the most out of their people and culture was the furthest thing from their mind. As a result, they were kept at arm's length from the decision-making process.
In an old-fashioned business hierarchy, HR was not a big priority. The head of Human Resources was often not a direct report to the CEO, and had no part in change management or visioning. HR was strictly reactive.
This mentality has changed in recent years. In the past, money was the most valuable resource. These days, funding is a lot easier. Interest rates are so low that money is practically free. If you have a good idea and a solid team, investors will flock to you, and venture capital will come your way.
People Are Your Number One Resource
Today, your people are your number one resource, but they are getting harder to find and retain. You can't afford to treat HR and staffing as an afterthought. That's why it is not uncommon to find CEOs recruiting people to help them fulfill their vision. For the same reason, you're more likely to find an HR person in the top two or three positions in a company. You are now seeing heads of People and Culture in the C-suite.
Today's heads of People and Culture focus on change management, not risk aversion. When people are seen as a company's most valuable resource, HR has a far bigger impact on your bottom line. You need a high-performing culture to succeed. You need to get the best out of your entire staff, and you need to get everyone rowing in the same direction.
To achieve this, you can't rely on people with a traditional HR background. You require strategic, analytical employees who always think of ways to optimize. Your head of People and Culture should be a business partner who reports to the CEO, not a junior executive who is obsessing over compliance.
Bringing HR into the C-Suite
Historically, C-suite executives set and communicated company goals. Inviting HR to join the highest echelons in a company helps ensure a unified vision across your entire organization. It also helps establish better work and compensation models to motivate employees.
For example, research suggests that performance bonuses can often lead to worse performance. Employees focus on meeting targets instead of innovating. Going against conventional wisdom and finding better ways of keeping people happy and engaged is a matter of strategy and culture, not compliance.
At Influitive, our approach to metrics is another way that today's People and Culture professionals differ from traditional HR specialists. We not only look at our employees' retention rates and Employee Net Promoter Scores (eNPS), we also look at company-wide KPIs and OKRs.
It's not enough to be high performing if we're burning out our teams, thus forcing our employees to leave because our performance won’t last. We also can't have an engaging and nurturing workplace that doesn't meet its targets. Balance is the key, and the best way to achieve this is to ensure that HR programs are aligned with a company's values, vision, and strategy.
When HR values, vision, and strategy all flow from the top down and are in alignment, you create the conditions that foster individual and collective success.
Viewing HR in a Different Light
I don't have a traditional HR background. At heart, I'm a business analyst and management consultant. I'm also not a tech person, and this makes me a fish out of water at a company like Influitive. But I don't see my background as a weakness.
I was somewhat hesitant to take an HR job because I didn't think that I could make a difference. I was wrong, and quickly realized that I could build something special in this space with a simple shift in perspective. By thinking about strategy instead of compliance, I was able to tackle HR in a way that reflects the realities of high tech companies and startups. I was able to see what kind of culture best drives a company like Influitive.
On the other hand, my business background is as traditional as it gets. I have a B.Comm from McGill and an MBA from the Rotman School of Management. I cut my teeth at Bain & Company, which is a very conservative outfit.
Over my career, I’ve worked in polar opposite environments. But the contrast has formed my current view on how to lead People and Culture. My overarching strategy encompasses three ideas, all acquired as I observed the worlds around me.
Lesson 1: You Get the Most Out of People with a Unifying Vision
Bain is very much a monoculture. While employees come from diverse and impressive backgrounds, they’re usually motivated in the same way. There’s a common thread running throughout their collective minds. In fact, my work as Case Team Leader required me to apply a single methodology to a varied set of problems. Bain's culture is so deep and pervasive that they don't even give cultural interviews. They don't ask questions like: "What do you like to do on a Saturday night?" They know you're a fit by how well you do on your case interview.
Oddly enough, the Bain approach works. You'd think that employees in a company run this way would develop a herd mentality, but the opposite is true. Bain expects employees to be independent thinkers. They challenge new hires to speak their minds right away. This kind of cultural rigidness allows innovation within a conservative financial company like Bain. But while Bain has a fantastic culture, people often leave after a short period of time. This works fine within Bain’s business model, but isn’t realistic for most businesses.
This makes their interview approach impractical for a tech company like Influitive. The various types of people we need in the company is much greater, and one approach to hiring doesn’t work the same way it did at Bain.
The next step on my path to Influitive was Airbnb, a company that is diametrically opposed to Bain. Whereas Bain is static in its approach, Airbnb is all about change management. Bain is results-oriented while Airbnb is mission-driven. These are two fundamentally different approaches.
Bain finds people who have a single vision and asks them to solve diverse problems. Airbnb hires people who are diverse and asks them to create a single vision. People stay at Bain because they find the work challenging and like the people. They rarely mention the vision of the company. In comparison, when you talk to people from Airbnb, the majority will mention how inspired they are by the vision.
You could say that both approaches are equally valid, but I feel that working for a common vision is a better motivator for the long run. I say this from experience, but I believe the research also backs me up. People do a lot better when they think they're working for a great cause.
At Influitive, we’ve made internally communicating our vision and strategy a major initiative. Every month, we ask our employees if they understand the vision and believe in it. This gives us data points on the effectiveness of our communication strategy and if we’re headed in the right direction.
Every quarter, we make sure to repeat the vision during our company-wide town hall. Each person in the company has goals that cascade up to the company strategy, so they know how they support the vision.
Since implementing these changes, we have steadily shown an improvement in our retention rates. As a business, employees staying longer means more money in your pocket: You keep valuable business knowledge, you don't lose time recruiting, and you are working at full capacity.
Lesson 2: Ensure People Know How to Get Ahead, and Reward the Right Behavior
One of my greatest initiatives as head of People and Culture was to revamp the promotion process. Our previous approach wasn’t horribly flawed, but I wanted to clarify what it took to actually get promoted. We implemented two changes.
First, we created a document called Roles & Responsibilities for every role in the company. We then outlined what it meant to be performing at each level. This is probably the most used product we created in HR. The document allows managers to have objective conversations on performance, makes it clear what expectations are for our employees, and identifies what it takes to get to the next level.
The second change was the creation of a promotion committee. At any point in time, a manager can put an employee up for promotion. The employee and manager work on the submission together. The submission focuses on proving out how they have accomplished the key objectives outlined in the Role & Responsibility matrix. This is a fantastic learning opportunity for the employee, who learns how to talk about their accomplishments in tangible, value-driven terms.
These simple changes brought transparency to our people processes. It also delivered credibility. When someone gets promoted now, they know they earned it.
Lesson 3: Build Scalable Processes and Treat Everyone as a Member of the P&C Team
Another issue we deal with at Influitive is scalability. For example, in the past, we had one person on our People and Culture team who was strong at what I call “therapy sessions.” When people had problems, they could talk to this person. It was fabulous, but we couldn't put the burden of an entire organization on one person’s shoulders.
This is a valuable skill to have throughout an organization such as ours. To build a high-performing culture, we have to focus on training every manager in our company to engage in such conversations. It is a far more effective approach than having just one person who excels at this skill. This is the subject of an ongoing experiment.
Another example is recruiting. It’s not effective to have the entire burden of recruiting fall to one or two people who are removed from the day-to-day operations of that team. If you’re an employee of Influitive, you should care about bringing in the best people. Recruiting expectations are outlined in our role and responsibilities for every level.
Challenging the Status Quo as VP of Business Operations
I was recently promoted to VP of Business Operations. Our People & Culture team reports to me, as does the Finance & Accounting and our Field Operations teams. This is a bit of an experiment—having a person trained in HR taking their skills to Finance and data analysis.
Now my job is to maximize all our resources: Our people, our money and our data. Our hope is that this will put us in the best position to support the vision and strategy of Influitive. Time will tell if this new approach will work, and whether we'll return to the old way of doing things.
We've definitely made progress at Influitive and I think we're ahead of the curve. There are other companies who are trying this with varying degrees of success.
Getting people to buy into a high-performance culture is not just a matter of sticking goals on the wall for everyone to see. It's not just repeating everything seven times. You have to cultivate specific strategies, test them, and put them into action. You need to communicate your strategy, your mission, and your vision in words that are relatable to every employee.
Above all, you have to make sure that everyone is accountable to the CEO, and vice versa. Goals and OKRs have to cascade down from the top.
There Are No Secret Handshakes or Magic Formulas
Some companies think they're doing everything right. They're meeting targets and innovating, but their retention rates are low. Their people are burning out and leaving. It's only a matter of time before growth comes to a grinding halt and the whole thing collapses.
Today’s HR professionals know that talent is the most precious resource. Heads of People and Culture understand it is increasingly rare to acquire and retain the best minds. This is especially true in tech.
To keep everything rolling, we must strike a balance between personal and collective growth. We must communicate goals and ensure buy-in so people want to stick around.
I've learned you get more ROI by investing in transparency, clarity, and creating exciting growth opportunities than you do in any of the traditional "employee experience" practices. Deep down, no one cares about ping pong tables, food, or free drinks. Those are great perks, sure. But without those other pieces, it simply doesn’t matter.
There are no secret handshakes or magic formulas. There's a lot of trial and error involved, and it can all seem frightening. But it all begins with a simple shift from compliance to strategy.
We will always need HR to ensure regulatory compliance and to handle the paperwork, but in high-performing technology companies, it’s time to recognize HR as a strategic partner for success.