Entrepreneurs' identities are closely tied to their businesses, so it's not surprising that companies often absorb many of their founders' personality traits. A founder-driven culture can be a good thing. Steve Jobs's design ethos, for instance, helped mold Apple into a successful business. But when founders fill companies with their clones, it can lead to problems.
That's what happened to Todd Morris. When Morris founded BrickHouse Security, a New York City-based company that sells hidden cameras and other surveillance products online, he was determined to keep the company lean. For the first few months, he worked alone. Over the next two years, he gradually added a handful of employees. Morris picked people who were a lot like himself: driven and independent.
But as the company grew, collaboration became increasingly important. Employees started complaining that there was a toxic work environment. It had become like something out of Lord of the Flies, says Morris. "You couldn't leave them alone, or they'd be at each other's throats," he says.
Morris wasn't sure how this had happened. With complaints mounting, he hired a consulting firm, PI Worldwide, to help fix the culture problem. The firm administered personality tests to the whole company, including Morris. The results were clear: Certain employees refused to listen to the ideas of others and were clashing with the rest of the group. And those troublemakers were mostly Morris's early hires. For the sake of the company, Morris had to ask those employees to leave.
Like Morris, many entrepreneurs fail to consider team dynamics when launching their businesses. "The Stanford Project on Emerging Companies," a study of nearly 200 Silicon Valley start-ups from 1994 to 2002, revealed that most CEOs put little thought into their hiring strategies. As the companies grew and evolved, the CEOs discovered that many employees no longer fit in. "People have the idea that they'll cross that bridge when they come to it," says James Baron, who co-directed the study and is now a professor at the Yale School of Management. "They seriously underestimate how costly and difficult that is."
Without a deliberate hiring strategy, founders often unconsciously gravitate toward job candidates who share their personality traits. "Sometimes we use ourselves as a yardstick," says Linda A. Hill, a professor at Harvard Business School and the co-author of Being the Boss. But, she says, people tend to overestimate their strengths and downplay their weaknesses. So, by hiring people like themselves, business leaders may inadvertently populate their companies with CEO-level egos.
These days, all job applicants at BrickHouse are required to take personality assessment tests before coming in for an interview. Morris looks for signs that people work well with others, and he is cautious about hiring candidates whose test results indicate big egos. And Morris meets with prospective hires only after they have already received a thumbs-up from a department manager and a couple of potential co-workers.
The changes have already had a noticeable effect. Its 55 employees are getting along, and turnover has dropped 10 percent. And Morris has gained a greater understanding of his own weaknesses. "I had, through narcissism, hired people who were similar to me," he says. "It created an environment where there was too much conflict and not enough cooperation."
Be strategic about the company culture. Identify the company's core values and long-term goals. Hire employees who embody and uphold those values.
Involve key managers and employees in the interview process to ensure that new employees will work as well with their bosses as withtheir peers.