Employees come first

I'm sure many Homestead customers, as business owners themselves, have read all of the business books which preach putting customers first, or profits first, or pursuing the theory-du-jour about "six sigma" excellence, etc.  It's not that these things aren't important, but personally, I think it's the wrong thing to focus on when building a company.  At Homestead, we've chosen instead to put employees first.  Above profits, and above customers.  It's not that those things aren't important, I just believe that great employees are the enablers that make everything else happen. 

So, we have striven to build a culture at Homestead that makes employees feel like they are the most valuable assets we have (which they are).  We don't do this simply with compensation, although it is certainly important to pay fairly and competitively.  Instead, we focus on creating a feeling of ownership and responsibility among our employees, and then empower them to make the best decisions for the company.  I am often asked how it is that we have fostered such a strong culture among our employees, and here are a few of the things that I usually answer:

1.  Make it part of your definition of success.
The first, and most important step, is to convince yourself that the single key to your success is great people, and that everything else will follow.  I believe that defining what you mean by success is actually harder than achieving that success (more on this later) and for us, having a world-class group of employees that love their jobs, behave as owners of the business, and treat our customers, employees, shareholders and community as THEIRS is the definition of our success. 
2.  Hire, hire, hire.
There is nothing harder, more time consuming, and more important, than hiring people.  In the past twelve years I have probably interviewed well over 1000 people personally, and have met with every individual before they became a full time emplloyee (we've hired over 300 people to date at Homestead).   All of the other managers at Homestead spend a significant amount of their time (probably 10%) on hiring, and the average candidate meets with about 10 people before the hiring decision is made.
3.  Create traditions, not just perks
People like traditions, whether they are with their family, their group of friends from high school or college, their church/temple, or their local community.  And traditions are a very powerful way to bind people together, create lasting memories, and mark the passing of time.  Why not have traditions at your company, instead of just perks?  Well, we do, and it all started days after I started the company in my room, when we needed a place to meet.  There was a favorite diner of mine (The Peninsula Creamery) that has served amazing milkshakes and hamburgers in Palo Alto for almost 100 years, and we decided to have a meeting there for lunch every Monday and discuss the important events from the past and upcoming week, so that everybody would be informed.  Back then our survival was pretty much week to week, and it was critical that everybody knew how we were doing, what they needed to focus on, and what the chances were that they would get their next paycheck.  Twelve years later our company is a bit more stable and we wouldn't fit in the Creamery even if we took every table, but communication is just as important.  So, we still have lunch every Monday for the entire company and all of the leaders of the company stand up and discuss what's going on, and we celebrate our triumphs, commisserate over our shortcomings, and have a little fun.  In twelve years we have never missed a Monday lunch.  Other traditions that we have established include: our annual Homestead Retreat, where we take all employees on a team-buliding trip for 3-4 days; our Homestead Anniversary Party, where we celebrate the anniversary of our founding by throwing a huge party for our employees and their guests; the Homestead Talent Show, which just occurred last week by the way, where our amazingly talented (and slightly crazy) employees put on acts for the extended Homestead family at a nearby theater (more on this soon: David Wu, our COO, and I performed a new song that just might make it on to the hold music soundtrack of our phone system); and Homestead Universities, where we have brown bag presentations--usually given by fellow employees--on topics ranging from how our software is architected to taiko drumming to ballroom dancing.

Well, I could go on, but that's enough to whet your appetite.   I'd love to hear what other people do to foster a strong culture in their company.  I'd encourage all founders or future founders out there to remember that your culture starts with you, and how you select and treat your very first employee, even if it's a contractor or a part timer.  Organizations have a way of reflecting the attitude, personality, and sensitivities of the earliest people, so choose wisely and invest heavily.  By the way, these things don't take a lot of money--in fact, they can save you money--but they do take a lot of time and thought.
--jsk

Comments

[Armande]

Hi Justin, I love reading your blog, makes homestead even more close to home for me (even with me living in The Netherlands). I have been a member since 1999 and since a few years I am able to make a living online, with my homestead-sites. Will keep your advice in mind for when I am ready to hire staff. I don't see it yet but it may be sooner than I think! ;-)

[Pat]

It would be nice if you could focus on the glitches that prevent us from logging onto our accounts to maintain our stores. It would also be nice if you had someone in customer support that would actually READ the emails we send them instead of scanning them for a keyword and sending a canned response that doesn't answer squat.

Finally, it'd be nice to know what it is that I'm paying for since the system seems to be down more than it's up.

Thanks so much.

[Justin]

Pat,
I'm not sure what login and system problems you are referring to. Niether our website or our storefront systems has been down in many, many months, except for rare scheduled maintenance, which happens very late at night.

Also, 100% of our emails are answered by LIVE people, and it's unusual to hear a complaint about them. If you email me directly at ceo@homestead.com and describe the problem you are having, I'll make sure somebody gets back to you promptly.

In the future (and for other readers), if you want to escalate a complaint, just drop me an email at ceo@homestead.com instead of using the blog.

Thanks!
--jsk

[eric butler (moonglum01)]

A friend of mine who is a prof at UCLAs Anderson Center was explaining to me the corporate talent show thing (they make the MBAs do one) - I have to admit the concept was a bit lost on me :)

I have to wonder what your Yankee transplants think of all this - sounds so west coast! Do you see cultural difference between the way businesses are run east vs. west?

[Matt]

Hi Justin! Nice blog!

This is a great post for anyone wondering why people stay at Homestead forever. The core team I used to work with-- like John, Gordon, Greg, etc.-- are still there after 7 or more years, give or take. And these are young engineers with no shortage of opportunities in the area. I guess they can speak for themselves, too, but I sure had a blast working there. :)

[Phil]

Justin's comments about putting employees first aren't just talk; the culture at Homestead is one of the strongest I've experienced or heard about. I loved the four years that I spent working at Homestead, and I learned a lot that I've been able to use in new roles since then. As Justin said, Homestead really encourages collaboration and shared responsiblity for the success of each project (and the whole product). It was a great experience to be involved at such a high level on many projects, and it definitely helped me grow. Above all, its a fun and rewarding place to work - everyone is encouraged to be involved in the local community, to have fun together, and to get to know their customers. I'm working on getting my current company to focus on some of those same strengths. Oh, I had a blast, too :)

[Mike Myatt]

Hi Justin:

This was a great blog post and I concur with both your premise and your conclusions. You may be interested in reading a recent blog post entitled: "How To Win The War For Talent" which can be viewed at http://www.n2growth.com/blog/index.php?p=33

[jen]

Hi Justin,

I agree with you completely about your priorities. They are in line with my own and my company. I spend a lot of time creating a learning culture. I invest a great amount of time in training and helping my staff build skills they didn't have before they joined the team. My promise and a perk of the job is, if you stick with it long enough, you'll leave this company with a wider and stronger skill set than before you started. I recruit people who are serious and passionate about learning and then I challenge them every step of the way. Results are productivity and personal empowerment.

[Adria]

Hi Justin,
From what several people have said in this post, it looks like I am very lucky to be starting at Homestead on Tuesday. I look forward to meeting you soon!

[Jerome Alexander]

Several years ago I wrote a book on the subject of workplace culture and employee morale. It is as relevant today as it was then. Employee morale is directly linked to the interaction of employees with line managers who are charged with executing the policies and strategies of companies. Unfortunately, many of these managers subvert the good intentions of the organization to meet their own personal goals and agendas at the expense of their peers and subordinates. This management subculture is a result of a corporate culture of ignorance, indifference and excuse. Better corporate level leadership is the key. Read more in "160 Degrees of Deviation: The Case for the Corporate Cynic." Do not let your organization drift off course!

[Employment Finder]

Sure, employees always come first but some comanies tend to think their profit moe than empoyee benefits

[Miami Air Conditioning]

yes, in all the classes I've been they told us that the customer service comes first,
but the persons who recives the clients are the Employees, so we need to educate the employees, and give them all the attention possible

[Indian T.v Serials]

It’s all connected. Employee satisfaction (and retention) creates an environment that customers enjoy connecting to. Satisfied customers become loyal customers – those that not only return for more business, but bring others along with them. These behaviors of loyal customers cause the business to grow. As the business grows, they invest more in the people that make it happen. As employees feel invested in, their satisfaction with the organization increases, and so on… and so on…
At the center of all of this is the supporting leadership structure that makes sure policies are customer-centric and easy for the employees to work in.
Easy to describe – difficult to construct and effectively maintain.