February 15, 2011

Why Culture is Key

pascal louis perez

Typically, entrepreneurs seek three things: changing the world, financial success and creating a unique organization that will last for decades. The opportunity to shape a company’s culture, values and treatment of its customers is one of the most exciting elements of joining a startup early. When I decided to join Wealthfront in 2007, I saw a unique chance to shape the engineering culture.

Daniel Pink in his book summarizes over thirty years of research about what motivates people and the work environments that help them strive. He identifies three dimensions driving motivation: the liberty to decide for oneself (autonomy), the chance to improve continuously (mastery), and the chance to be part of something bigger than oneself (purpose). (To pique your interest, see .) Most recently Tony Hsieh, CEO of Zappos, has helped put the spotlight on the importance of culture in building a company. In his book, , he narrates the history of his shoe company and how Zappos has achieved outstanding customer service.

Hsieh follows a long line of executives who have successfully constructed subcultures. Walt Disney wanted to unleash his artists’ creativity and paid higher than market rates with high benefits. Google’s Larry Page is famous for instilling an engineering driven culture, and mountains of perks (yes, I took advantage of the onsite massages during my time there!). Reed Hastings, founder of Netflix, has shared the . One of his famous lines states “Like every company, we try to hire well. But, unlike many companies, we practice adequate performance gets a generous severance package.” We’ve applied this principle to great success along with the . often contributes his thoughts such as . Another data point, PayPal was hugely successful and former insiders have replicated that success elsewhere, in part thanks to the .

Building our company’s culture has been a strategic focus from the start. Like many other organizations, we’ve put a big emphasis on “culture fit” during the interview process and apply the airport test to everyone. If stranded in an airport for hours, would you be happy to be with this person? Culture fit is one of those long-term investments, which keeps paying dividends. It’s instrumental to having a team that communicates well, can quickly and openly resolve conflicts and keeps politics out of the equation.

Over time, we’ve honed what we want our company’s culture to be. We wrote down and made explicit the rules we had all been implicitly living and working by. The process has helped us sharpen our understanding of what we seek in our workplace, be it employees, the way we work or the way we interact with outside people. It has also helped avoid misunderstandings or ambiguities about the proper attitude to strive for. As we bring on new members, the first class of the “Wealthfront University” is our .

Embrace Pareto. The 80/20 rule is the best proxy for judgment and judgment is usually the most important quality for success, especially when it comes to start-ups. We always strive to determine if it’s feasible to deliver a subset of a new feature to get fast customer feedback so we can move forward more quickly.

Relish Honesty. Intellectual honesty and direct communication create a framework for quality decision-making. Mistakes happen; as long as they are acknowledged and fixed quickly, there’s no problem.

Ask Questions. Management’s here to provide context, not to dictate what you think or what you do. We encourage independent thinking; if you’re not sure of the context, ask. Getting the context right aids decision-making.

Take Risk. Risk and reward are two sides of the same coin. Without risk, there’s no reward. We celebrate reasoned risk taking and don’t punish anyone for failures when they happen for the right reasons.

Show Respect. The golden rule is no joke: treat others – both inside and outside Wealthfront – as you want to be treated. Mutual respect is key to building strong relationships. We can’t build a culture of trust without it. We have zero tolerance for flaming e-mails and other types of disrespectful communication.

Add Value. We didn’t hire you to waste your – and our – valuable time on repetitive tasks. If it can’t be automated, outsource it.

Take Responsibility. We welcome challenges to group consensus, but be warned: don’t offer an alternative approach unless you’re willing to step forward and take the lead on it. If you don’t feel strongly enough to take responsibility, then don’t criticize. When you do take on responsibility, deliver the goods on time. Treat every decision as if you own the company, because you do.

Have Passion. All the talent in the world won’t cut it without passion. If you’ve got the necessary skills, and are passionate about what we’re doing at Wealthfront, odds are you’ll outperform.

Share Opinions. Opinions are always welcome, but the bottom line is that the person who is responsible for a particular outcome has the final say. That being said, the responsible person won’t gain any respect by repeatedly ignoring the group consensus. Once a decision is made, we all need to move forward and support it, whether you agree with it or not.

Align Interests. Startups are a team sport. While playing to win is required, searching for the win-win with our customers, partners and teammates will allow us to build the strongest franchise over the long term.

Given our strong technology focus, we have also adopted an Engineering Manifesto crystalizing how works. Each time the team has doubled, we’ve had to make adjustments in our practices. We used to have paper cards for Agile planning; we now use . We used to have shell scripts to push to production; we now have the . The Manifesto is one of the latest addition to our team’s practices.

Test. We’re a test driven team – we always accompany our code with tests.

Improve. When updating code, we make it look better than it was.

Care. We are responsible for our code and we make sure it works as expected in production.

Monitor. Expect things to go wrong and monitor for it.

Communicate. When delivering features or requesting changes, set expectations on timelines upfront and update progress.

Use . Problems are not local. When something goes wrong, we look at the big picture and get to the root cause.

Say “No”. If our TODO list is too large, we say “no” to more work or re-prioritize.

Commit. Commit early, commit often. We break up our tasks into at most one day’s worth of code.

Build. We build our software and test it hundreds of times a day. When committing, stick around to ensure all the tests pass.

Push. Our process is designed to empower everybody to push any system to production. Remember that these rights and privileges always come with responsibilities.

Over time, we’ve created a company we all love. We have gathered a group of amazing people: smart, proficient and moreover and amicable.

Having strong ethics we rally around has helped us heightening our standard, and reminds us of the bigger goal we are after than what we might be caught up in the day-to-day.

Knowing that we all respect and work towards such a culture has made Wealthfront a place we trust highly trust each other. We can count on each other, and know our back will be covered in tough times. For example, when approaching a launch, we’re all focused on the goal and pick up tasks from each other.

As a “the transparent company”, this culture has also enabled us to go farther in ways in which we run the company. The board meeting is shared with everyone. Monthly financials are e-mailed around. Our yearly budget is shared and presented in detail. We constantly try to give the best possible context to empower everyone to make the best decisions for themselves. If you want to come and share this with the team, we’d love to have you for our !

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