Discover more from OnlyCFO's Newsletter
When “Culture” Kills
A seemingly good culture can be bad for companies
We should all know by now that times are tougher in 2023 for tech companies. But most companies still haven’t really adjusted expectations of employees. Many people conflate a good culture with being excessively employee friendly and having top Glassdoor reviews.
During the ZIRP (zero interest rate policy) era employees only had to spend a small fraction of their time doing actual work to somewhat justify their inflated salaries/titles because the free money made everything easy.
The below chart shows where software employees spend their time (based on my deep research).
Companies coddled their employees and gave them everything they wanted to feel special. We created cultures where making employees feel good was more important than adding actual value to the business.
The magical “10x employee” is usually just someone who can focus on their actual job and provide business value. Companies can make a lot of their employees 10x+ more valuable by resetting expectations and changing the culture.
Many companies are trying different things to increase the “actual work” part of the pie chart:
Shopify boss, Tobi Lütke, is tired of all the employee side hustles that are distracting them from their actual job…
Shopify and several other big tech companies have tried to limit the number of useless meetings.
Zoom, who is powering the remote work culture, is pushing employees to come back to the office…
These recent examples are trying to solve the problem but not directly addressing the issue:
Companies need people who will prioritize and focus on their actual job.
In my pie chart above, people can feel very busy and important by doing a lot of those things, but they add very little value to the business. Some of these things are important, but when they overtake actual work time then something is broken.
A lot of companies that have done layoffs in the past year have felt little impact to their business post layoff and in some cases the business got better. This happens because resource scarcity causes more focus, prioritization and creativity. As evident from my pie chart…there is plenty of time to reallocate to actual work.
If the pie chart above looks like your company’s employee time allocation then it is probably not going to make it.