Many startup founders aim for a good cultural fit as the final filter for talent acquisition decisions. This was conventional, prevailing logic for many years, especially in rapid team-scaling that startups often need. But recently, there has been pushback on the idea of “cultural fit.” In late 2019, The Wall Street Journal advised against using it as a hiring strategy, and Harvard Business Review and even SHRM have spoken against the idea in recent years as well.
It’s understandable why: we’re currently living in a moment of global social unrest spurned by the murder of George Floyd and similar events. There are increasing dialogues about race and diversity. Even when cultural fit was a more-accepted approach to hiring, there were concerns that the concept could perpetuate bias (and there plenty of them). Similarly, we live in a data-driven time, or we presume to, and oftentimes cultural fit can be code for “This candidate likes the same music I do” or “This candidate comes from the same background I do.” While bias-inducing, that’s also not necessarily a data-driven approach to hiring, and can create homophily, or near-universal sameness, in a company. When the majority of decision-makers in a company come from similar backgrounds and perspectives, that company can be a candidate for disruption -- because they have a hard time embracing new ways of thinking or ideas.
So, all this said, is cultural fit definitively on the way out, or is there still some validity to considering cultural fit when you hire and develop teams? Let’s dive in.
Hiring staff is not for the faint-hearted. It’s tough to get past the usual interview song and dance to figure out whether the person in front of you has the goods your business needs.
Sure, the culture you’re trying to instill into your venture comes into play as well as ability and education. But increasingly, teams need soft skills such as emotional intelligence and conflict resolution to excel, particularly in a more digitized future.
We have been talking about the rise of soft skills for years, including popular TED Talks such as “The rarest commodity is leadership without ego.” First Round Review had a panel of Silicon Valley CTOs together a few years ago and their primary concern was trying to hire candidates with more soft skills. Much of the thought leadership around hiring in the past five years has been around looking for empathy, realizing what managers need these days, and similar topics.
Unfortunately, it’s not that easy to just up and start hiring for soft skills.
In the rush to recruit for cultural fit (however it’s being defined by the hiring manager and recruiter), soft skills, such as attitudes, are not given the weight they deserve.
Plus, they can’t be identified very accurately via standard interview processes and psychometric testing.
As a result, cultural fit remains a potentially-flimsy default mode for recruitment that can actually harm your enterprise.
If you rely exclusively on cultural fit hiring, ignoring soft skills, you finish up with impractical, poorly-thought-through hiring decisions that can hobble your growth.
Here’s what could go wrong:
When you hire for a particular type of personality you risk creating what the Harvard Business Review calls a personality silo where an individual’s skills are secondary to their personality fit.
Now, it should be noted that other HBR articles over time have provided roadmaps to hiring more effectively for cultural fit. It’s not easy, and we’d never claim it is, but it involves measuring the values of all your current employees, charting them using a standardized tool, and then comparing the values of candidates to those values.
Consider an example like Amazon. In 2015, The New York Times called it a “bruising workplace,” full of late nights and accountability-demanding managers. But, Amazon also has created some of the biggest, most-revolutionary ideas in modern commerce. Their “cultural fit” might not be for everyone, but if your values include working long and hard on big, society-shifting ideas, you might be a perfect cultural fit for them. Others would not be. It all varies by industry and company.
Hiring ‘mini-me’s’ can reinforce wrong assumptions (subconsciously) and prevent those assumptions from being tested and challenged. Then you end up with a myopic pack that’s blind to its own faults.
That’s some of the “homophily” mentioned above, but the fact is, many organizations have cultural blindspots that they have no real idea about (hence the term blind spots).
This is often the rationale for consultants and third-party vendors or help for your business too: they can locate the blindspots you cannot. It’s why you sometimes see rapidly-scaling startups use third-party staffing firms as well.
Overly-homogenous teams can be fragile as they lack the means to handle disagreements in a professional, positive way (and grow from the experience). If the team members are too similar and have developed friendships outside of work (common), it becomes even harder.
People don’t want to argue with their friends, and especially not over deliverables. When you remove that ability to challenge and hold each other accountable, your team development is now skewed.
Remember the origin of the term ‘computer nerd’ (hint: it wasn’t ironic at the time). You sometimes need the outlier or the misfit or the person who doesn’t quite fit to help the team get to the next level. Martin Luther King even had a term for one variation of this idea: “angelic troublemaking.”
His man for that was Bayard Rustin, who was both (a) openly gay and (b) extremely liberal, both lightning rods at the time. Rustin probably would never have been recruited to the civil rights movement for “cultural fit,” but MLK loved him and he was a classic agitator who annoyed the existing powers-that-be as opposed to constantly challenging them.
Now, we’re not saying you need to hire annoying people, no. But … you need to have some people who are different, and push/poke/prod at ideas and their origin stories in order to make them better. Find a Rustin.
Missteps in talent acquisition can be costly. Time invested in new people can’t be recovered. When a person walks they can take a lot of intellectual capital out the door. The math on bad hires has never been super clear (sadly), and it does vary tremendously by industry, but a general rule of thumb is 30% of first-year earnings.
Obviously, that means executive hires that go poorly because of perceived cultural fit are much bigger issues cost-wise. In 2017, SHRM called the cost of a bad hire -- while even noting the problem of cultural fit -- “astronomical.” Forbes has also, correctly, pointed out that most organizations don’t even realize how high the cost of a bad hire truly is.
Remember: every bad hire can mean you need to start a new process (costs), find a new person, bring them on-board, and deal with any knowledge or context that walked out the door with the last hire.
The founder’s vision needs to stay clear and focused. Staff turnover can cloud the longer-term direction of the venture as founders are diverted by hiring mistakes. Larry Page found a time-consuming, but important, “hack” for this as Google scaled: he personally reviewed every hire the company made.
And actually, while we’re discussing cultural fit and bringing up Google, one of the more famous stories from the growth of their culture is about the development of the ads business (which is most of their revenue). One day, before they had launched AdWords and related products, Page was reviewing ad prototypes, got frustrated, stormed out of his office, tacked the ads to a wall, wrote “These Ads Suck,” and left. It’s true that he was a big boss/founder, yes. But in a place too reliant on cultural fit, that move would be a lot harder to pull off. And that move spurned Google to one of the biggest ads businesses in human history.
Stanford University argued in 2018 to “look beyond cultural fit” in hiring, using as is basis a paper by four academics on alignment at work. The academics had gained 10 million+ emails sent between employees of a tech company from 2009 to 2014. They applied linguistic analysis at scale to the emails, looking for cultural fit clues, under the thesis that language use was intrinsically related to how successfully (or not) people fit into work environments. Individuals’ emails were measured against those email addresses with whom they had the most contact.
Here’s what happened:
While an employee’s cultural fit at the time of entry was loosely connected with outcomes — those who fit well from the outset tended to perform well — a much more powerful predictor of success was an employee’s ability to recognize and internalize standards. “We find that what predicts who will stay, who will leave, and who will be fired is not so much initial level of cultural fit as much as their trajectory, the degree to which they adapt,” Goldberg says. “There are important differences between individuals insofar as they are capable of reading cultural code and shifting behaviors accordingly.” The authors refer to this malleability as “enculturability.”
Thus, a new term in the cultural fit discussion canon was born: “enculturability,” meaning employees can read the cultural codes of an organization and adjust their behavior accordingly. This plays into acronym usage (very important in many jobs), respecting of hierarchy, how quickly projects can be pivoted, and much more.
Within this research, it’s less about what music you like, where you went to college, or your hobbies outside of work. Instead, it’s about reading and reacting to the moment once you get inside an organization. That’s what “cultural fit” really is, although here we are calling it “enculturability.”
Above, we mentioned some of the risks with cultural fit, including a lack of team diversity. “Diversity” has been debated conceptually for the last half-decade in terms of what aspects of diversity an organization should be looking for: gender? Race? Cognitive? The short answer is: all. But the bigger answer is that a focus on cognitive diversity gets you to more innovative, collaborative solutions faster, as framed up here by a Facebook VP of Engineering:
“The ultimate goal is cognitive diversity, and cognitive diversity is correlated with identity diversity. That means it’s not just about [getting] women in tech. It’s about broad voices, broad representation. But we can’t step away from the idea that in the workplace, diversity also looks like identity diversity. You have to get to the place where you aren’t made comfortable by the fact that everyone is the same, but rather feel inspired by how different we are. We get better problem-solving that way.”
Feel inspired by how different we are. Isn’t that the best case against our standard notions of cultural fit?
A few possibilities include:
These questions help you get at someone’s ability to solve problems, ability to think differently, ability to collaborate, how they feel about self and motivation, how hard they like to work, how they parse apart their week, and more. It gives you an idea of how they would fit into the existing team structure and culture.
If time and cost allows for it, finding a true cultural fit does involve a degree of team-based hiring, whereby the entire existing team gets to interview top candidates, ask them about their work style, and maybe even do sample projects with them.
This brings up another important point about cultural fit: it’s very hard to establish some degree of true, effective cultural fit if the entire hiring process is run by the recruiter and the hiring manager. You need to involve the team, because the team is who will be working with the person, i.e. fitting with them. Team-based hiring can be costly and time-consuming, so some organizations run screaming from it, but it’s important to find people who fit with the existing team and not just the boss of the team.
It’s time to review the notion of cultural fit and start hiring for human, soft skills that are specific to the task. Soft skills can now be analyzed and scientifically measured as part of an overhauled recruitment process.
Also, consider that once you can determine the soft skills each individual offers (and your own bias) you can bring in the benefits of team diversity like increased creativity and better customer engagement.
Importantly, these attributes boost your bottom line as diverse teams tend to be more productive and innovative giving you an edge over your competitors.
And thinking a bit longer-term, this knowledge can help you develop a more sophisticated and informed HR function. You can then plan for the training and development needs of the team to minimize that costly staff churn. Plus, you can build for the future as you can map the skills required for any particular point in your venture’s lifecycle – both now and down the track. This is especially important as the needs of startups change.
Now there’s a better, data-driven way to find the sought-after magical ingredient for world-class hiring. If this means you get a great team and don’t waste time on fixing bad hiring mistakes, that’s got to be a good thing, right?
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