Article from The Start-up Hierarchy of Needs (original title: Happy living for everyone… except the British!)
“In the early days we didn’t have much money… the challenge at the time was how to attract and retain good people”
In his book Good to Great Jim Collins defines a model for taking companies that are average or good and turning them into great companies. The study found that the good-to-great leaders shared a common set of characteristics for “Level 5” leaders: they were able to build great teams and build succession into the team; they had humility and were modest, and wouldn’t stop at anything to achieve success for the business. The leaders of great companies were found to care more about their companies than their own personal success. Collins describes Level 5 leadership as the ability to build greatness through a paradoxical blend of personal humility and professional will. “It is very important to grasp that Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great… Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.”
Level 5 leaders also build a culture of discipline in their companies, which to a large degree depends on their ability to hire disciplined people who match the culture and can be leaders of and guardians of the culture in the future. “The good-to-great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system. They hired self-disciplined people who didn’t need to be managed, and then managed the system, not the people.”
Maarten Roerink is the CEO of Guidion, a company that can best be described as a Mechanic-as-a-service business. The company is headquartered in Amsterdam and works together with its partners to offer technical home improvement services to more than 700,000 customers annually.
Maarten joined when the team was 25 and has grown it to 1500 through applying and demonstrating Level 5 leadership. We discussed how when he joined the company he was completely uninterested in the business model, salary, bonus, benefits or stock options, and was more interested in the people, the culture and above all in the adventure of creating a great company.
When and how did you come to join Guidion?
‘Two executives who wanted to leave their corporate jobs founded Guidion in 2005. I joined in 2008 after working at KPN where my last role was responsible for building an internal start-up. I decided to leave the corporate environment of KPN where at that time decisions were made based on politics, power and status, never about the customer or the product. I am not the type of person who wants to fight for, or needs power or status, because it’s a pointless waste of energy. After KPN I decided to invest in a few sessions with a coach to better understand what type of environment would be the right fit for me and what I should be looking for in my next role. We had a very open, honest and quite vulnerable conversation, which clarified what I was looking for.’
‘The two criteria for my next role were.
The people in the company would have to be great people who wanted to make a difference
I would have to be able to relate strongly to their company culture
I first met and interviewed with one of the original founders of Guidion and the interview with her left a lasting impression on me. It came through very clearly that the focus of the business was on the people, I totally trusted her and bought into her vision. Even though I had a set of golden handcuffs at KPN I knew that I wanted to join a company where there was more risk but also more potential reward. I wasn’t interested in the typical things like business model, salary, bonus, benefits or stock options. I was more interested in the people and the culture and above all in the adventure of creating a great company together.’
How did you build the business in the early days when cash was tight?
‘The co-founders chose to adopt Verne Harnish’s management philosophy, which he details in Scale Up. It’s one of a number of methodologies you can utilize to grow from a small company into a large business and one of the areas that he focuses on is people and culture. This was important to us because in the early days we didn’t have a lot of money, so we paid low salaries and therefore had to make extensive use of interns and students. The challenge at the time was how to attract and retain good people; the solution was to make them happy. Our solution was to create a dynamic and interesting company culture and environment where our people could be happy and feel fulfilled in their jobs.’
How did the company develop after you joined?
‘When I joined there were a couple full time employees and another 20 interns or students in the team. The founders had developed a rapid international expansion strategy with the aim of expanding into 6 countries across Europe simultaneously. They first brought in another co-MD to run the local business. Shortly thereafter I joined and the founders focused on the international roll out. At the time the co-MD and myself were the only people above the age of 30 and the average age of everyone else was 22. It turned out that the Dutch business thrived but that the international expansion plan was too bold, aggressive and expensive, which resulted in the two co-founders leaving the business to start other companies.’
‘The second MD left in 2012 and I continued as the sole MD and built a new team around me. At the time we started to grow rapidly and didn’t have a typical division of roles. The second MD had more of an alpha male leadership style than I do. I don’t like to take credit instead I prefer to give it and I will happily give up the CEO leadership position if that’s the right thing for the company. I realized though that I needed to step up and be more decisive and that we needed to strengthen the senior management team. Finding the right skills, experience and cultural match for all of those roles was especially important as they would become examples of living our culture as well as the guardians of our culture. It is always important to ensure that the culture fit is strong for all new hires, but with these roles I knew it was critical. We are now very clear about our company culture and values and it has become a relentless focus for us to make sure that new candidates fit with our culture and values.’
‘ I now have developed a more open and transparent leadership style than back then. To be really transparent you need to be able to admit your mistakes and be open about the details of the business – like what people are getting paid. Every employee should know as much as they can about the company because they can then make informed decisions versus having to ask their manager for the information they need to be able to make a decision. To make the right decision you need to have all the available information to hand and we are trying to build a self-steering organization as much as possible. An organization where everybody can make the right decisions at any level. As leaders at Guidion it’s our responsibility to make sure they have that information and then they won’t need to work up an unnecessary hierarchical structure in search of the relevant information. From a couple of full time employees and twenty interns we have now grown to 1500 people working for the company. 500 of those are working in our office as employees and 1000 are contractors or small businesses that we partner with.’
How does Guidion make a difference as a business?
‘We specialize in onsite services, installing, maintaining and repairing solar systems, heating systems, smart meters, set top boxes, internet solutions, security systems, e-health care devices and anything else to do with people’s home equipment maintenance. We make a difference to the quality of people’s lives by making sure that the solar system or the set top box is installed and working properly and hassle free. And above all that they know how to get the most out of it. We remove the technical challenge associated with people’s homes and we contribute to happy living.’
What catalyzed your thinking around business happiness?
‘We realized in the initial stages that a happy and fulfilling environment would help us retain good people. I also started reading about and became a real believer in positive psychology and even appointed a chief happiness officer after reading “Delivering Happiness” by Tony Hsieh. We decided to really bring the fun aspect of happiness alive in the company. We have lots of parties and it’s possible to do something social pretty much every night at Guidion. At Guidion your social life can’t be boring.’
Read the rest of the article on The Start-up Hierarchy of Needs