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Do IT Companies Need Culture Code? An HQSoftware Case Study

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Sergei Vardomatski started out in charge of a relatively small company whose offices were housed in a detached home. Now the company’s scale has evolved up to two offices with nearly 100 people employed.

This transformation to a middle-size company brought Sergei, the company CEO, and Denis, an external efficiency consultant, together to meet the new challenges the firm was facing.

Sergei and Denis talked with us about what resources and actions were needed to come up with solutions and unite the HQSoftware team.

Sergei, you decided to change the vector of management in your company. Could you define how, exactly?

It’s simple to manage a company as long as it remains small. You may talk directly to developers, communicate with your customers, run your projects. What you actually need is a team of technically competent developers that you keep in touch with directly.

Sergei, HQSoftware CEO

People in a small company have closer communication and know each other’s personal concerns. But when a company begins to grow, much has to be delegated; there are more decision-makers. And the decisions are really important.

A developer decides how to do a specific task within the defined architecture; an architect has to decide on architecture; a project manager seeks to balance customer’s needs; the chief manager upgrades the competence of the managerial staff.

You may face a paradox when you have good employees and they don’t seem to work efficiently together. A manual format for running workflow doesn’t work well since there are too many people and the company now has a multi-tier structure.

So you have to figure out why well-qualified people can’t do their work well. And to start with, you have to define what it means to “do it well.”

This idea, applied to specific practical goals, will mean different things to different people. A developer, for example, correlates doing the job well in producing a nice code; a business customer may associate it with the cost and ROI index. And even between two developers, what constitutes “a nice code” may differ a lot.

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Aleksandra Golik
Head of Sales
at HQSoftware

This is the key issue in shifting from a small to a midsize company. And then you realize that you need to develop better business processes.

If we base the business processes of the company on what you find in classic management literature, we’ll end up drowning in bureaucratic procedures. Bureaucracy will be escalated to absurd levels. A lot of companies go through this kind of monkey business.

Denis, you were the consultant brought in when this problem arose. How did you come up with the idea of the Culture Code? How did you realize that the company really needed it?

This idea sprang up after Sergei and I had discussed the challenges of building relationships in a growing company.

Denis, an external efficiency consultant

The “family” culture code that the company had at the beginning started to blur as the number of employees grew.

Basically, when you consciously manage a company’s culture you have the opportunity to create a corporate code that builds a comfortable atmosphere, one that unites all the employees with a common understanding. That is why we decided to integrate separate rules into one Culture Code.

Primarily this code is a synopsis of all the rules of the game created by the employees themselves. By incorporating the mindset and ideas of people from different departments of the company, Culture Code creates a common frame of expectations in the spirit of mutual support or teamwork.

Often, we think we know what ‘mutual support’ is, but if you ask ten employees this question you will get ten different answers.

So, if we can clarify and establish these principles, we’ll be on the same page when we interpret what we think are desirable and expected results.

I suggested to Sergei a draft Culture Code aimed at retaining employees and growing their degree of involvement and job satisfaction.

Denis, what steps were taken to implement the Code?

First, we developed a plan for implementing the Culture Code and then got down to work.

The first step was gathering a team of 50 people during the summer corporate event. This was a working group, which laid out the key principles of working together. For example, points included: “How we support each other,” “How we develop our skills,” “How we understand that we have done our tasks well.”

Working group at summer corporate event

The second step was to detail the mission of the company and the benchmarks of company progress, and to create a portrait of “the ideal employee.” After that, we had one more step to take, which was to create a list and specifications of key competencies.

This is one of the most time-consuming issues in the process since we have to decide what are the most important skills to maintain the sustainable development of the company. Every single item here is coordinated with all the employees of the company.

At the next stage of the two-month pilot roll-out, people were asked to observe and encourage the targeted behavior in each other. We included the targeted skills in performance reviews, to keep the ball rolling.

When recruiting new people, we discuss the tenets of our Culture Code with them. We check whether they share our company values and possess some of the relevant soft skills we’re after, alongside their technical skills.

The soft skills and values are prioritized since hard skills can be taken for granted. We work in a team; that’s why soft skills are so important.

Some believe that this approach is intended to encourage people to work overtime. Sergei, what’s your opinion?

Well, one may say the idea of a Culture Code is a gimmick to make people work overtime. But the idea is quite the opposite.

Overtime tends to be a consequence of mistakes. Any time you back up someone’s bugs, you are a sort of a hero. Culture Code is aimed at minimizing mistakes. The fewer mistakes we make, the less over time we have to do.

Being results-oriented is one of the ways this works out. A project manager foresees an architectural bug and announces it in advance. A developer who sees that something is going wrong exposes the problem, without waiting for the release.

We had an experience of that kind, where an error was exposed 4 months in advance and we smoothly met the deadline without having to make heroic efforts. Errors and overtime work are inevitable, but they will decline with this kind of system.

We don’t hail heroism here, though we absolutely respect heroes. We appreciate it when everything is steady and timely. Even so, our business is far from being devoid of turbulence; nothing is certain or carved in stone. But on balance, the corporate culture decreases uncertainty.

Sergei, what is special about HQSoftware’s corporate culture as compared to other companies?

We weren’t reinventing the wheel. We were trying to make use of the existing experience gained from other companies.

We started by honestly talking to people about the gaps they saw in corporate culture. We gathered everyone and explained our plan, picking their brains for their thoughts about it. As a result, we discovered something we hadn’t recognized before: the value of transparency.

We ourselves have to be committed to our code, without hypocrisy, to ensure that others follow us.

To accommodate the event, we had to rent a venue. Because of all the graduation parties going on at the time, only the Hilton hotel was available at that moment. We broke with tradition and rented a helicopter in the Aviation Museum. Of course, it took us more time but it was worthwhile.

A helicopter we rented for the event

It turned out to be an efficient and practical venue. The money we spent went toward museum support and development. It was a pragmatic decision, which benefited both the company and society. This is a reflection of our corporate culture.

What are your expectations from Culture Code?

We expect that we will avoid creating a lot of new rules.

Culture Code is very practical; it’s not just a matter of plastering the office area with posters of nice phrases from the Code. It is a vibrant business tool, aimed at minimizing rules and mistakes and maximizing the satisfaction level of both our employees and customers.

This is a tool that will synergize the interests of all three players in the business: the customer, the company, and its employees. Employee loyalty is beneficial for business because it increases effectiveness amid the reality of an outrageously competitive market.

 

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