Roman Kirsch

Founder & CEO of Lesara

The story behind quantifying company culture & how this helped us become the fastest growing tech startup in Europe

 

Culture is important - that's for sure. It's one of the first things that you learn in a Business 101 Class but are never actually able to connect the dots unless you are in real life and realize how much of an impact it can have.

I want to share how institutionalizing & quantifying our Lesara culture helped us to scale and become the fastest growing tech company in Europe in 2016.

 

picturelesaraoffice

When we started in late 2013 we were extremely lucky with our very first hires - super smart people that shared our vision and had consistent beliefs about what is important to build a great business.

The very first hires multiplied our mentality & culture: A make-things-happen attitude, Thinking & Doing Big vs getting lost in small details, being bold in content but modest in style. A lot of them are now heading our teams, going 3+ years strong.

Learning #1: The first hires are so important in getting the culture & trajectory of the company right.

However at some point in time the multiplication doesn't work anymore that well - for us this was in 2015 when we reached 100 employees after a bit more than 1 year.

Multiplying ourselves and leading by example just didn't work when you are adding 15+ team members every single month. Especially when a lot of the new hires "import" the work ethics or culture from different companies.

So we did what we thought a tech & data-driven company should be doing: Quantifying culture and measuring what initiatives have the best ROI.

Our Goal is to use data and be as professional about culture as we are about Customer acquisition costs or On-Time-In-Full deliveries for our customers.

Here is what we did:

  1. Culture Code Bible: We formalized & wrote our Culture Code - making it one of the core reading elements for new hires.
  2. Quantification: People only focus on things that can be measured. So we started measuring A LOT! A few examples:

a.) Recruiting Channel Performance: What are the best channels for different positions, what is the Cost per Hire and how much should this position be worth for us. If we can't find a Product Manager for example, but having one would save us $50k in the next quarter, this is what we would be willing to invest to get one onboard.

b.) Funnel Management Optimization: Early on we decided that we would never compromise on hiring. So if you need to hire 15 new team members a month than the only way to keep up the quality is increase the number of applications. We figured for us that the ideal acceptance rate is at 1%. Hence we manage our funnel accordingly and keep investing into more applications if we need to bring in candidates for certain positions

c.) Acceptance rates by Interview Step: Someone being too tough in the interviews and having too few candidates coming into the next rounds? Or the common opposite case? Looking & comparing acceptance rates by interview step by interviewer helps us making the recruiting process consistent, maintain great candidate quality and give dedicated interview trainings to recruiters who have too low/ too high acceptance rates.

d.) Cultural Fit: When interviewing candidates we are not asking about past experiences or having them walk us through their current position. Instead we have specified questions for each value. Smartness? We have our own developed numerical test that everyone needs to accomplish. Structure & logic based decision making?Most of our applicants need to prepare a case and present it in front of our Heads & Directors. This way we make sure to get the best out of the interviews and not waste time walking through irrelevant experiences.

e.) Pay for Cultural Fit: Also our Bonus system is tied to fit with our 7 core values. If you are showing fantastic results but don't respect and contribute to our values you may still end up without a bonus for the quarter.

 

This is just a small list of examples - but you get the idea.

So how did this work out for us so far? The results have been amazing.

  1. Applications: Being smarter about investing into the recruiting funnel helped us to scale applications across our offices in Europe & China to >2.000 per month
  2. Diversity: Part of our culture is also to foster diversity. Quantifying it also helps to walk the talk and not just make it a buzzword. Over 70% of our employees are internationals. 52% of our employees are female. And 55% of our Leadership team is female (C-level, Director & Heads).
  3. Better hiring selection rate: Our hit rate of great hires increased significantly. The % of people that dropped out in the first 6 months after being hired decreased by 40%
  4. Retention rates: A bit early to say for a 3.5 year old business with 300+ employees but what can be said is

-> The employer recommendation rate increased to 90%+

- > We have been awarded as one of the Top 10 Retail businesses to work for in Germany

-> And we have also been awarded as one of the Top 25 companies to work for in Southern China for our office in Guangzhou.

For us it's quite clear: Looking at some of the best & fastest growing companies in the world (and those that are struggling as a comparison) there is a huge correlation between a strong Culture & employee satisfaction and business success.

Learning #2: While culture & values may be different for companies, you would want & need to write them down, share them and make them a core belief.

Keeping a start-up spirit & being an innovative, fast-moving company is not a matter of company age or size, it's a matter of how strong your culture is and how much you investe in it.

The best way to do this for us was to quantify it. Big Time.

 

Roman

 

PS #1: We have decided to share our current Culture Code to help inspire people to invest time & money into their cultures and create more amazing working environments: Here is the link to the Culture Code.

PS #2: If you have questions or comments we are happy to listen & learn. You can write me at roman@lesara.com or the brain child behind our Culture Code bible, our People & Culture Head Julie (julie.goergen@lesara.com)

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