Saying that culture is key to success is a bit of a cliché, but in the software industry we live and die by the happiness of our employees. Given the fierce competition for talented folks in our industry (or any industry for that matter) building an environment that retains and fosters the happiness of your employees is a high priority.

Often I've referred to my job as CEO of our company as that of a rock band manager--I'm here to make sure the rock stars have all the "stuff" they need to perform "the show"--even down to making sure they get what they want for lunch.

Of course you also have to do the basics: pay well, provide for professional challenges and opportunities for career growth. But you also have to provide a unique company culture--the employee benefit that keeps on giving.

Here are five ways to keep things fun, fluid, and focused:

1. Empower Employees

As an owner, you can stay in close touch with your staff but you can't be in the thick of it all the time. Instead, you need to encourage employee involvement and be willing to step aside as they take control.

At my company, CarGurus, this happens in a number of areas, but the best example is our product development process. I take an active role in the high level product direction but beyond that the actual software developers have wide discretion on how products are actually developed, including functionality, user interface, etc. We actually have no product managers in our organization, relying instead on having developers who can also make business decisions. When employees drive the product direction and culture, they feel more vested in it and loyal to the products they help create.

2. Beware of the Meeting

I hate meetings. At CarGurus we avoid meetings as much as possible. Instead of formal sit down meetings we encourage more ad hoc discussions. Our office space is wide open with very few offices, no cubicles and few walls. Desks are laid out on open floor plans encouraging two or three developers to roll their chairs together to discuss a specific feature they are working on.

The best "meetings" we have usually happen on the spur of the moment and only involve those that directly work on a project. These type of ad hoc gatherings promote quicker decisions and allow for more time to get actual work done.

We do have one company wide meeting once a week. At this meeting each employee--no matter how junior--is expected to brief the entire company on what they are working on and what they got accomplished the prior week. In this regard, our one meeting is not about reaching decisions but rather informing the rest of the company on what we each are working on.

Twice a week the company hosts and pays for a catered lunch for the entire company. These lunches are meant less for business and more for "catching up." Most of the time we talk about each other's kids, vacations, hobbies, etc. and not about work. These lunches are a great way to make sure we all stay connected as friends and not just co-workers.

3. Keep the Workplace Comfortable

Given the sheer number of hours we all put in at work, the actual physical work space is a critical element of everyone's happiness. From the beginning, our company wanted to have a "non-office park" feel. In fact we run our company out of a converted townhouse in Harvard Square because it feels more like home than work. The office has numerous couches and places to sit and catch up with fellow employees.

When we saw space getting tighter and needed more office space, I once asked my VP of engineering if it would be okay for the company to move further outside the city to a larger, more classic corporate office park. His answer......? "No." While I would have preferred moving the office closer to my suburban home and eliminating the commute for myself, I realized he was right. Our employees like our non-traditional office space, proximity to restaurants and the overall urban feel of Cambridge, Mass. In fact our office space and location is a recruiting asset that allows us to beat out many other software companies for top talent.

The location and the feel of our office space are too important to our culture. So it's true, my commute is worse, but everyone's happy. Real CEO sacrifice, right?

4. Have Fun

As a company we host many monthly activities purely to allow our employees to have fun. Once a month, we have a company wide "Fun Friday," where we close the office at noon and go do something fun --see a movie, go bowling, play pool. We have a dedicated game room where we have a foozball table, flat screen TV, X-box and Wii.

While we work hard, it is important to have places and times to let off some steam and just have some fun. Not unlike those term papers you wrote in college or high school, nobody writes the entire paper in one sitting. We all need to take a break. It improves your focus and makes the entire process more productive.

5. Stay Picky

You've found the right space and built the right culture. Maintaining it means keeping your standards high when bringing new talent into the fold. We interview about 15 people for each person we hire, and much of that final decision will be based on cultural fit. Is this someone we would enjoy working with?

We all agree that one bad apple in the environment will rot everything. The hiring process therefore involves a lot of staff input. Anyone involved in the interview process can pull the plug on a candidate if they feel something's off.

Empowering employees with important decisions only works if you have bright, self-motivated folks on your staff.

In fact, we have found that our most productive channel for hiring new employees is through employee referrals. We now have an employee referral program where we will pay a cash bonus to existing employees for each new hire they refer to the company. What better sources of new employees could we ask for than our employee's friends?

Our guidelines may be most relevant to the specific environment we've built, but they've helped us keep every employee we have hired in the last four years. The elements will vary, but don't lose sight of the fact that your talent should be interested in more than just a decent paycheck. When your employees wake up each morning, you want them to be excited to come to work.

I was at dinner with my kids recently and one of them asked me what I do "at work." I told them that actually my "work" is not really "work," that in fact I see my daily job as great fun....

Make sure your employees see work that way as well, and you're company surely will prosper if you do so.....