“Maintaining an effective culture is so important that it, in fact, trumps even strategy.” – Howard Stevenson Culture. It’s probably a word you hear often if you follow blogs on entrepreneurship or read articles on business and management. But what is it exactly? According to Frances Frei and Anne Morris at Harvard Business Review: “Culture guides discretionary behavior and it picks up where the employee handbook leaves off. Culture tells us how to respond to an unprecedented service request. It tells us whether to risk telling our bosses about our new ideas, and whether to surface or hide problems. Employees make hundreds of decisions on their own every day, and culture is our guide. Culture tells us what to do when the CEO isn’t in the room, which is of course most of the time.” This post will cover all of the elements that make great culture. Each culture has different tactics and unique qualities. But, universally, culture is about the employees and making sure they have a fun and productive working environment. Let’s dive in.
The workplace should not be something that people dread every day. Employees should look forward to going to their jobs. In fact, they should have a hard time leaving because they enjoy the challenges, their co-workers, and the atmosphere. Jobs shouldn’t provoke stress in employees. While the work may be difficult, the culture shouldn’t add to the stress of the work. On the contrary, the culture should be designed to alleviate the work related stress. This is why culture matters. Culture sustains employee enthusiasm. You want happy employees because happiness means more productivity. And when a business is more productive, that means it is working faster; and when it works faster, it can get a leg up on the competition. So it’s worth the investment for companies to build and nourish their culture. Culture is also a recruiting tool. If you’re looking to hire talented people, it doesn’t make sense to fill your office with cubicles and limit employee freedom. You’ll attract mediocre employees, and you’ll be a mediocre company. If, on the other hand, you have an open working environment with lots of transparency and employee freedom, you’ll attract talent. From the minute people walk in the office, they should know that this is a different place with a unique culture. When you put a focus on culture, you’ll have guiding principles. People will know you for this. Employees will live by it. It’ll help get you through difficult times. You’ll base hiring and firing decisions on the principles. It’ll help get all employees working on the same company mission. In some sense, it’s the glue that keeps the company together. A company culture that facilitates employee happiness means lower turnover and better company performance. Employees are loyal and companies perform better. It’s a win-win. If your company ramps up to more employees, the culture will become a self-selecting mechanism for employees and candidates. The people who would fit into your culture become attracted to it and may end up with a job. For example, at Amazon, they look for inventors and pioneers. People who want to work there know this and are attracted by it. Now, let’s get into the elements that make great company culture…
Tech Journalist Robert Scoble meets with a lot of CEOs. And when talking about hiring decisions, they always try to make sure they don’t hire jerks. It’s for this reason that companies have such a rigorous hiring process. Some companies like to bring job candidates in to work with their employees for a week. They give the candidates a project and see how they work and how they work with others. In a post on Harvard Business Review, Eric Sinoway breaks down types of employees and how they impact company culture. The high performing employees who don’t fit into your culture are known as vampires. These vampires must be terminated because, while performance is solid, they’re attitude is detrimental to company culture, which is detrimental to business. Zappos CEO Tony Hsieh, one of the strongest advocates of culture, makes a great point when he notes that the people you hire represent your company even outside of work. If you meet someone and they tell you where they work, your perception of that place will change based on your opinion of the person. If they’re nice, you’ll view the company in a positive light. If they’re a jerk, you won’t view the company favorably. This effect can be even greater when it’s a company you’ve never heard of and didn’t previously have any opinion of. If the person is helpful, you’ll view the company as helpful. This is why it’s important to hire people who share your company’s values. One bad hire can affect an entire department and possibly dozens of customers. And it can happen quickly, acting like a virus that spreads. The employees will talk about the bad hire; and if action isn’t taken, it can get much worse. But the good thing is that any damage can be reversed. And more than that, your values can be reinforced at the same time. If you release that toxic employee (the vampire), it’ll show other employees that you appreciate them and are serious about your culture.
There’s a question that often gets asked in job interviews: Why do you want to work here? The purpose of the question is to provide the interviewer with a sense of what the interviewee knows about the company. If the interviewee can provide a specific, pointed reason for why they want to join that company, it shows the interviewer they’ve done research on the company and may be a fit for the position. Of course, an interview will show only so much. A person can be whoever they want to be for 30-60 minutes. The only real way to know if someone is on board with the values and mission of a company is to watch them work for an extended period of time. Do they follow the same values in their personal life? This is why you need to really get to know the serious candidates. Zappos has their core values. They guide how employees work and enjoy their personal lives. When employees are passionate about the values and mission (like organizing the world’s information at Google), they are dedicated to accomplishing the goal. In a video on the Facebook Careers page, Mark Zuckerberg says: “The reason why we’ve built a company is because I think a company is by far the best way to get the best people together and align their incentives around doing something great.” At Facebook, it’s about making the world more open and connected. These drive the employees, guide the product, and energize the entire company. If an employee isn’t committed to the mission, it just becomes another job. And when it’s just another job, it usually means the employee isn’t happy. On the other hand, when the employee is on board with the mission, they’re engaged in the job and want to help the mission succeed, thus helping the company succeed.
No one has all the answers. A company where only management makes decisions is a surefire way to send A and B players away to other companies. As some companies get bigger, they tend to limit employee freedom. The employees are less and less involved in key decisions and their impact on the business is drowned out. It becomes a part of the culture. Employees go to work, do what they’re told, and just help someone else achieve their dream. The worker’s impact on the business is minimal and they become “just another employee at just another company.” And for some people, it’s all they want: go into work, take orders, do the job, and wait for the clock to hit 5:00 P.M. But this is not what the best employees want. They want to have a voice and a meaningful impact on the company and its direction. They know that anyone can win a debate with the most senior person at a company. They also know they can create tools for the company without the need for management approval. For instance, the Google News tool was created by a research scientist at Google named Krishna Bharat. Creating Google News wasn’t something that came from a management meeting and descended upon Bharat. He invented it after the September 11 attacks because he figured “it would be useful to see news reporting from multiple sources on a given topic assembled in one place.” It came from a problem that he was having; he wasn’t instructed to create it. Companies have greater success when employees are given this type of freedom that isn’t ruled by a hierarchy, assuming they’re talented employees who fit the culture. Knowing that good decisions can come from anywhere and expanding employee freedom are cornerstones of attracting talented individuals who will fit into the culture if you let them.
Ever notice how many CEOs refer to their employees as a “team”? On the Instagram jobs page, they refer to themselves as a team, not a company. Quora has a “Team” page, not an “Employees” Page: Refer.ly invites people to “Join Our Team”: The difference between being a team and just a bunch of individuals is that the individuals see themselves as separate from each other. Helping others is forced because you normally operate on your own projects, or your own part in a larger project. Teams work together on all work related projects and help where necessary. It doesn’t matter who gets credit for what because you accomplish everything together. You’re knit together, not separated. If you watch sports, you see how teams function. They work together (in the form of passes and assists), encourage each other, and communicate regularly (communication on the sidelines when they’re not playing). There are always a few who get accused of putting themselves before the team, known as a ball hog in basketball. This is because they “hog” the ball and don’t involve any of their teammates in the offense. This impairs the offense which cannot work at 100% because not all 5 players are fully involved. These people are usually dealt with appropriately at the direction of the head coach. They usually see decreased playing time or are cut from the team. Teams work best when everyone is on board, feeding off each other, and playing together. If you have a bunch of individuals, or ball hogs, they’ll break down from conflicts, become ineffective, and then irrelevant. Teams are the best and most efficient way to get things done.
In the coming weeks, we’ll be profiling different company cultures. We’ll take a look at Google’s culture and what makes it so effective and unique. We’ll examine Zappos and their customer service centered culture, Facebook’s engineering heavy culture, and many others. Stay tuned for more! What other elements are important for company culture? Let me know in the comments! About the Author: Zach Bulygo is a blogger for GoRiseMe
Being a fundraiser is not just about collecting donations – you’ll need to inspire passion and learn the art of asking Good fundraisers are those who want to change the world and can inspire others to feel the same. So, you want to be a fundraiser? Here are some top tips for those who want to make the jump.
The first thing Donna Day Lafferty, course leader of the new fundraising degree at Chichester University looks for when interviewing candidates is passion. She says: “Part of the interview is to tell me something you’re passionate about and make me passionate too. I am looking for someone who has some kind of drive and energy. New degree aims to educate the next generation of fundraisers “The first step if you want to become a fundraiser is to look in and ask yourself, am I someone who gets really passionate about things, do I want to change the world and even if I don’t yet believe I can change the world, is it something that inspires me? “If you don’t have that in you then how can you inspire other people to want to change the world too?”
If you do have that drive, the next step is to decide what kind of fundraiser you want to be. The roles are diverse, from managing volunteer-led community projects to writing grant applications or being in charge of corporate sponsorship. If you don’t know what kind of fundraiser you want to be, it might be better to start in a small charity where you’ll be doing a bit of everything, says Day Lafferty. “The plus is you’ll have to roll your sleeves up and have a bash at everything. You’ll be called on to do a more diverse range of fundraising activities. A lot of responsibility gets thrown on your shoulders very quickly. “After a year or two in a small setting, you’ll have plenty of experience to talk about in interviews if you want to move to a larger organisation.”
Even when you get your first job in fundraising, there’s still a lot to learn if you want to progress and be promoted. Day Lafferty says: “Fundraising has changed beyond belief – direct response TV, government contracts – there are so many things that require very sophisticated skills. If you want to progress in your career and be a valuable asset to your charity, don’t leave it to other people to plan your development.” It might seem easier said than done when you are first starting out. Day Lafferty advises new fundraisers to be proactive. She says: “Think about where you are now, where you want to be and what that means in terms of career development.”
Laura Croudace, corporate fundraising officer at animal welfare charity PDSA, recommends fundraising for a charity or organisation on a volunteer basis so you can practise key fundraising skills. Croudace, who has only worked as a fundraiser in a paid capacity for 20 months, started out by organising events for Birmingham children’s hospitals on a volunteer basis. One of the first things she had to do was call Cadbury and ask for a donation of chocolate bars. Asking for donations in a persuasive way is the most crucial aspect of fundraising but it can take practice. Croudace says: “People might question what benefit volunteering will have when you’re trying to get a paid role but things like learning how to ask are real skills.” She adds: “When you’re trying to start out, you’ll need to get over the fear of doing things like that. No matter what form of fundraising you end up doing – even if you’re a trust fundraiser sending out letters – you need to be able to ask properly.” Paying attention to how other charities communicate with donors can help you improve how you do it.
Croudace also recommends becoming a donor if you want to work for a specific charity. She donates small amounts to as many charities as she can. She says: “If there is a fundraiser who I really admire and they’ve won awards and I think I’d love to be like that when I’m a director, I start supporting their charity so I can get a feel for the types of things they send out.” You can also learn what not to do. When Croudace started receiving “awful” communications from a charity, she realised she could learn from their mistakes. “I started putting Post-it notes on them and writing what I didn’t like about them so I could use it in my own work. “You can learn from things that really inspire you or move you, but you can also learn from things you think are bad too. It’s also great for interviews.”
You don’t have to be a top fundraiser already to be an expert. Reading (and watching) widely will help you understand the sector and pick up tips on good practice. Croudace devoted lots of time at the start of her career to increasing her knowledge: “I called it my BB routine. In the morning I’d read a blog in bed, then I’d read a [fundraising] book on the commute into work. I’d read another blog at lunch, and continue reading the book on my way home. In bed, at night I would read another blog. I know that will sound a lot to some people but it was only an hour a day. “I also set up a Twitter account and started following useful people. I learnt so much in a short space of time. “There is also a fountain of knowledge on YouTube. If I didn’t read a blog at lunch, I would watch Institute of Fundraising videos.” The videos were part of a series called the Five-Minute Fundraiser, which cover different aspects of the job in an easily digestible way, which Croudace says are “perfect” for those new to fundraising. Deciding to donate to charity is easy. It's choosing which charity to support that’s the hard part. With more than one million charitable organisations in the US alone, selecting the right recipient for your largesse can be mind-boggling. Do you choose a charity close to home or one overseas? Support a well-known cause or one that fails to win big headlines? And how do you ensure your donation has the maximum impact?
There are many different ways to help a charity; you can make an online payment; volunteer your time; or for well-known people, endorse an organisation or become a named benefactor. However you choose to help out, two key factors will always influence your donation, according to Tom Hall, head of UK philanthropy at UBS: “that people want to help people and that they want to get the best dollar value social return,” in short, the biggest impact for their money. UBS chose to focus on causes that have positive outcomes for children. It used research from Nobel prize winner James Heckman that showed tackling childhood development early on garners the most significant economic and social gains, thereby maximising the impact of charitable donations. For many donors their actions will be heavily influenced by personal experience, donating to causes close to their heart, said Katerina Rosqueta, founder of the Center for High Impact Philanthropy, part of the University of Pennsylvania. She advises would-be donors to “start with the end. What is the change in the world that you are hoping to make?” This could be providing care to Ebola victims in West Africa or helping deprived children to read in a local school.
Once you have selected a cause, experts who advise on charitable donations recommend doing checks on the organisation that will be the recipient of your money. “Does their strategy seem clear to you and can you see any evidence of the impact of their work?” said Maya Prabhu, head of philanthropy at UK bank Coutts. Hall recommends looking at the skills of the senior management team. “Good governance is essential in any well-run charity,” he said “Look at the composition of the trustee board. How many trustees do they have? Look for the skill base of the [trustee] board. Are they aware of the issues that might affect them?” Experts warn against selecting a charity based purely on the level of its administrative expenses as the basis for calculating these vary widely, making comparisons difficult. In addition, according to Rosqueta, some non-profits can justify higher expenses, for example if investing in an IT system. There are also many online tools that can help you identify well-run non-profits. For US organisations these include: Guidestar, which provides information on the goals, strategies and achievements of charitable organisations; Charity Navigator, which rates organisations based on their efficiency and transparency; and, Great Nonprofits, which operates a large database of user-generated reviews of charities.
Yet, whatever the cause, all donors are united by wanting to achieve the maximum positive change with their cash. They want their money to make a tangible difference. So how do you get the biggest bang for your charitable buck? One way is to tap into a growing trend in the non-profit sector: charitable crowd funding, where donors club together to fund larger specific projects. Crowd-funding sites include globalgiving.org, piggybackr.com, fundly.com and razoo.com. Gifts via these platforms enable donors to participate in specific projects that appeal to them and, in many cases, track their progress through email updates. Often, by selecting a charity that hasn’t had much media attention, you can make your donation go further, Hall said. A high-profile disease such as malaria, for example, will receive significantly more donations than a condition such as rabies, he said. That often means that, by supporting these lesser-known causes, you can get in early where the easy-wins are made. Hall gave the example of a $300,000 donation made by one of the bank's customers to help stamp out rabies on the island of Bohol in the Philippines. The money funded valuable university research on the infectious disease and, following the publication of this study in a medical journal, the Philippines government then committed further funding to eliminate rabies from the island. Prabhu said that growing numbers of donors encourage friends or family to get involved to maximise donations. Beyond her own role of advising wealthy investors on charitable donations, Prabhu gives her son a small sum of money each year to give to a charity of his choice. When he was 8 he chose a dolphin charity. This Christmas, after much research, her son, now a teenager, chose Action on Addiction, a charity that works with people affected by drug and alcohol addiction.
Whether it’s Ebola or dolphins, whichever organisation you choose to support, there might be benefits that go beyond the feel-good factor. Tax breaks can increase the amount of your donation, sending more of your money direct to the charity. This means that when it comes time to filing a personal tax return, the tax man gets less of your hard-earned cash. Eleven countries stand out for their generous approach to charitable donations. They offer individuals valuable tax breaks on gifts to charity, according to a global study by the Charities Aid Foundation and US law firm McDermott Will & Emery. These magnanimous few include Belgium, Canada, France, Germany, Italy, Switzerland and the United States. The perks can be hugely valuable. In Singapore, for example, a S$100 ($74) donation to certain domestic charities can reduce your income liable to tax by S$250 ($186). In the US, if you are in the 33% tax bracket, the actual cost of a $100 donation is only $67. There is also evidence to suggest tax incentives foster giving in low-income countries. Adam Pickering, international policy manager at the Charities Aid Foundation, points to research showing 27% of people in low income countries give regularly to charity where there are tax incentives, compared to just 18% of people in countries without incentives. It isn’t often that governments hand you your money back. So when they do, it’s an opportunity worth taking.
While some see personal-desire crowdfunding requests as a sign of the demise of civilised society, Ethan Mollick, a professor of management at the University of Pennsylvania’s Wharton School, said this, too, shall pass. In time, a consensus will develop about what’s appropriate.
Room to grow Entrepreneur Nathan Sharp raised $50,000. He is repaying investors 2.5% of his income. These financing programs offer students more flexibility than interest-bearing loans. Shane Gring was barely scraping by. Saddled with nearly $50,000 in student loans and credit card debt, the 26-year-old Denver, Colorado, entrepreneur needed a way to supplement his income while getting his start-up off the ground. So, Gring, who runs BOULD, a company that teaches people how to build green homes, decided to crowdfund himself. Gring hopes to raise $20,000 on Pave, a crowdfunding platform where young American entrepreneurs, artists, students and other “prospects” raise money from accredited investors in exchange for a percentage of their future income. So far, four investors, strangers to Gring, have pledged a total of $12,000 to him. In return, he’ll pay
them 5% of his income for the next 10 years — whether he earns a few thousand dollars per year or a few hundred thousand dollars. Pave, which publicly launched in June, differs from popular crowdfunding sites such as Kickstarter and Indiegogo in several ways: It doesn’t require prospects to deliver on a specific project, product business idea. Instead, they can use the capital however they want. Backers — who must prove that they are high net worth — invest in the prospect’s future earning potential, not a current project. Rather than accept donations in exchange for a token gift, prospects agree to a binding repayment contract, much as they would with a traditional loan. Pave’s first 12 prospects to receive funding raised an average of $20,000 each. About 40% of the 4,000 prospects waiting in Pave’s queue are looking to refinance student debt, said Oren Bass, the platform’s co-founder and chief operating officer.
Pave is part of a small but growing financing effort around the globe, one that enables young people to fund their education or early professional efforts by selling equity in themselves to strangers for a small percentage of their future income. Some of the programs also offer mentorship, career counselling and job referrals to investees. Another newcomer, Upstart, launched in November. To date, about 60 aspiring professionals and entrepreneurs — all college graduates — have raised more than $1.5 million from investors. Outside the United States, such platforms have been around for more than a decade: Since 2002, the German companyCareerConcept has helped thousands of European students finance college in exchange for a cut of their future earnings. In Latin America, Lumni has put nearly $100 million in investments into the hands of 4,500 students, many of them from lower-income families. These financing programs offer students more flexibility than interest-bearing loans, said Alex Holt, an education policy researcher at the New America Foundation, a nonpartisan Washington, DC, think tank. “For a student, taking out $35,000 in loans is a very big risk because you don’t know what your income will be,” Holt said. These new financing programs can deliver strong returns for the financers, too. For instance, although it suffers a 10% default rate at any given time, investments have steadily generated a 9.5% return for CareerConcept investors, even through the credit crisis, said Vishal Garg, company chairman. These “human capital contracts” are not without risk for the investee. Although most of the companies doing such financing have precautions in place to protect investees from becoming indentured servants, harassment for repayment could be a problem if, for instance, if an unscrupulous financing firm is unhappy about a promising engineering major going into a lesser-paid field or cutting her work hours. Discrimination is also a potential issue, Holt said. For example, he said, an investor might decide to fund only men, who often draw higher salaries than women.
Alternative education financing programs made headlines earlier this month when Oregon’s state legislature approved development of a pilot program that would let students attend state colleges for free. In return, students pledge 3% of their future income for two decades — below federal student loan rates and well below rates for private loans that students can take out upfront to pay for school. Critics of such programs worry about them taking advantage of students and graduates without other financial options. But the current batch of private sector programs has built-in protections against that. With Pave, for example, prospects whose income falls 150% below the poverty line are relieved of that year’s payments. Should they strike it rich, Pave prospects can buy out backers for five times their initial investment. Lumni and CareerConcept cap repayment at 15% of an investee’s income. Upstart caps it at 7% and allows beneficiaries earning less than $30,000 per annum to defer repayment a year. “The Upstart arrangement sounds really scary until you consider the alternative,” said entrepreneur Nathan Sharp, 27, from Boston, Massachusetts, who raised $50,000 on the platform in 2012. Sharp, who has begun repaying investors 2.5% of his income, used the money to offset $100,000 debt he accrued while earning his masters of business administration degree — as he was trying to grow his online shopping start-up, Nifti. But it’s not just about the money. Sharp considers the professional mentorship he’s received from backers “the best thing about Upstart.” (Pave and Lumni backers also have the option to mentor investees.) “I don’t feel timid at all asking them for advice or help,” Sharp said. “Number one, because they had faith in me early on, and number two, their investment depends on it.”
Upstart CEO Dave Girouard said there must be a worthwhile opportunity for investors. To that end, Upstart uses an algorithm to predict a potential investee’s earning potential and only accepts about one-third of applicants. “We’re structuring this to be a really smart investment, whether you have a philanthropic bone in your body or not,” Girouard said. Even with periods of unemployment, he added, “wages and income — when you invest across a portfolio of people — grow fairly reliably and steadily.” Craig Walker, the American entrepreneur who invented Google Voice, has put up about $30,000 for seven aspiring entrepreneurs on Upstart, an investment he calls “a no-brainer.” “I don’t know if their first ideas are going to be their final ideas, but these are top-notch kids,” said Walker, who has already received payments from several investees. “I have no doubt there’s going to be a decent rate of return.” Like any investment, risks include possible defaults or lower-than-expected returns. Lumni co-founder and CEO Felipe Vergara declined to specify the repayment rate of the organisation’s investees. But, he said, it’s better than initially forecast, given the high employment rates in some of the countries Lumni serves. Upstart has seen a 100% repayment rate so far, Girouard said. But should a beneficiary refuse to pay or go bankrupt, the delinquent account would be converted to a 14.99% fixed-rate loan, enabling Upstart to notify credit bureaus and work with collections agencies if needed. CareerConcept, which handles collections in house, is able to collect payments or renegotiate terms on delinquent accounts more than 90% of the time, company chairman Garg said. Sharp, who hopes to someday be an Upstart investor himself, wouldn’t dream of dishonouring his contract. “I want all these people to look back and say, ‘That was a good choice. I would back Nathan again’”, he said.