Kieran O’Neill and Ben Phillips co-foundedThread, an online personal style service for men (although the service forwomen is in the pipeline) that combines algorithms and AI with actual styliststo “dress well without trying.” Thread users complete a quick quiz when theysign up and are matched to one of the company’s stylists (a real, living and breathing person).

I sat down with Kieran to discuss the steps he and the team at Thread have taken to build a strong well defined company culture.

Key Highlights

•   When hiring, consider how you can get candidates to demonstrate their skills (case studies, tests etc.) rather than just describe examples of them in an interview.

•   Consider the onboarding process carefully and be creative about how you welcome new people to the team.

•   It isn't easy to fire people who don’t match the values of the business even though they are very good performers; but you must stay true to your culture and ensure that your team are able keep you accountable to do this.

•   By proactively reflecting on the values each week in a team ‘values review,’ you can embed them into the heart of the culture; this way these values become everyone’s responsibility and you can welcome new ideas that you may choose to test out.

•   Building a strong culture can be fun: values bingo, randomly assigned team lunches, and experimenting with your employees’ ideas, for example, can foster a continuously creative climate.

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Values first

Developing the culture has been intentional atThread. From the very beginning, Ben (my co-founder) and I had a clear ideaabout what we wanted to build culture-wise. Around the second week of business,we sat down and wrote down what we wanted the culture to be like and kept thisconversation going in the following months. By the sixth month we had narrowedit down to a set of seven values that we would run the business by. Those sevenvalues are:

•     Userexperience obsessed

•     Uncomfortablyfast

•     Extremeclarity

•     Candour

•     Relentlessself-iteration

•     Enjoythe journey together

•     Actlike an owner

From my experience, the easiest time to introduce values is obviously at the start of the business when you have a clean sheet of paper. Changing a culture midway through building the business is much harder than actually doing the work at the beginning.

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Defining the company’s values

I initiated a conversation with the team where wediscussed company culture and defining our values as a set of guidingprinciples for the company. We all came together with different ideas and wrotethem up on the white board, coming up with about 30 adjectives. The processfrom there was to discuss and debate them. I think we whittled it down to 10 or12 ideas in that first session. We came back in a second session and narrowedthe list again to our seven values. It was important to me that each personcould remember and actually use them, so ten or twelve was too many. We arebuilding a great company and we understood that defining our values andbuilding a strong culture is a key part of a great company.

I think candour is the hardest of our values tolive up to because in England there is a societal culture of being polite andsomewhat indirect. It’s also harderbecause it’s the one valuethat carries a form of personal risk if it’s not reciprocated. If an intern says to the CEO,“Hey, I think this could’ve gone better,” the upsideof that interaction for the intern is small. The best outcome for the intern isthe CEO thinking she’s great becauseshe gave feedback. The downside is getting fired or getting blackballed if theCEO doesn’t actuallypractice what they preach and takes offence to what was said. In order topromote candour you need to create a trusted environment where your people areable to communicate openly and honestly and we work really hard on that.

Company mission, vision and values

The mission is the “why” behind what we do, thevalues are the “how” and the vision is the “what.” They complement each other,since you are more likely to achieve the mission if you have a business thathas a great culture, which in turn is supported by the company values. In thebeginning, when there were only a few of us, the mission was reallyself-evident so we didn’t formalise the wording. We would talk about it inconversations and everyone would be part of those conversations. On the otherhand we formalised the values very quickly and they became a huge part of thebusiness. As we started to grow the team, I realised that the mission actuallyneeded to be formalised because once we had grown to 15 or 20 people it was nolonger obvious.

We went through a process of trying to write itdown and I found that incredibly challenging because for me, it’s a concept or an idea. We had to turn the ideaof wanting to dress well but being frustrated by shopping into a sentence,which then would then become the why for the whole company. If that sentence isa bit weak, then the whole company is weak. I found it very hard to findsomething as catchy as AirBnB’s“Belong anywhere” or Microsoft’smission statement during the 80s, which was “A computer on every desk and inevery home.” These are very, simple powerful messages and I couldn’t simplify what we do to that extent. We ended upwith a mission that directly explained the “why,” although it lacked the catchymetaphors I was looking for: “Help people to feel happier and moreself-confident by making it easy to dress well.”

Integrating the values into the hiring process

Very few companies have unique hiring practicesand if you do the same things everyone else is doing, you’re hiring average candidates. Our 17th employeewas an incredible recruiter who was at Facebook in the early days and hadhelped build out the team there. She was the first person I would go to foradvice in the early days when I was building out the Thread team, and at somepoint instead of asking her for advice I approached her to join us. Mostbusinesses would hire a full time recruiter when they had grown to 30-50employees. Bringing her in at 17 employees was a commitment to quality andbuilding a process where we would be able to hire the best people.

Three-stage hiring process

There are three stages to our interview process,which we designed in house. Firstly, there is a remote test; if the applicantpasses that, they do an onsite test where we evaluate their functional skills,and then there’s a second onsitewhere we interview them for the values match and culture fit. By the time we’re interviewing them on values, they’ve already passed the functional tests, so they’re already a hire in that regard. The interviewis standardised so that we can compare the candidates on a like-for-like basis.

The interviewers score the candidates against thequestions they ask and for each answer they’ll give a score between one and seven, whereseven is excellent, six is very good, five is good and so on. The interviewergives a score as well as indicating their confidence in that score. We have aminimum score of five out of seven for all the values. We don’t expect perfection everywhere, but below a five is serious and we would have a conversation abouthow much we could realistically coach them on that value. It’s definitely a no if they’re below five on multiple values.

We also build a custom exercise or a case studytest for every role we hire for. If it’sa brand new role, we ask people from outside the business, who we know areexperts, to help us refine the exercise we’ve developed in house. Everycandidate that we put through the process will do the bespoke exercise and werule out 80-90% of the candidates from that exercise. We invite the ones whopass the custom exercise test to onsite interviews.

We also create a hiring spec document, whichlists out what we’re expecting andhow good out of seven they should be in each of the role specifications. Wetake each criterion and either design standardised interview questions orcreate an onsite exercise around it. We believe that you can asses some thingsin an interview format, but that there are many areas that you can’t. Interviews are limited in their value and arenot nearly as valuable as passing range of tests we’ve devised as part of the hiring process.

For example, when we were hiring for our Head ofFinance, their first round onsite consisted of three exercises and twointerviews, having already done the remote exercise as well. At the end of thatfirst round, the candidates had done four different tests covering the differentkey areas such as strategy and analytical thinking. Our process gives us aclear indication of how good the candidates actually are at these skills,whereas an interview simply shows whether people can describe examples of whenthey had to be an analytical thinker.

Hiring Mistakes

We have had to let people go because they didn’t match our values in the past, even though theywere good performers. For me the biggest test of how much you live your valuesis in whether you reject a candidate who is awesome at his job functionalskills but who has a big question mark over the values. It’s easy to let go of somebody who is bad at both.It’s hard to say, “Hey Mr Engineer, you are incredibly brilliant and productive,but I amsorry — you don’t match our values.” That has happened at Thread. The team haspushed me on it and I’ve pushed them onit. It’s not just about me as CEO being the ‘values guy’; it’severybody’s responsibility.

Onboarding

Once an offer is accepted, we’ll find out what equipment they want so that whenthey start, everything is set up from day one. We send a copy of the valuesdocument and company handbook so they’vegot that internalised before they start, too. Before they start, their hiringmanager writes what we call an Excellence Document, which lists out whatexcellent performance in the job looks like.

On their first day, the new joiner is paired witha buddy, someone who has been in the business for a while who they can justchat to in a relaxed way. The buddy will take them around and introduceeverybody in the team.

On their desk they will find a computer, a set ofoffice keys and we give them two books: The Lean Startup and Delivering Happiness. They also get a mug with their initials on.Their inbox contains an email from their hiring manager with useful links tothe intranet.

On their first day every new joiner sends out anemail to the whole company to introduce themselves and we also have a linkwhere they can read everyone else’sfirst day emails.

We will have already lined up about 10 meetingsfor them over the first few weeks where they get to meet the key people in theteam. They have three one-to-one’swith their manager in the first week and weekly one-to-one’s for a while and then fortnightly once they arefully onboarded.

Every new employee starts with a development planbased on feedback from the interview process, so from day one they’re improving and getting better. We basicallyreview the candidate’s interviews andwe take the weaker areas that we identified in the process and we turn thatinto a development plan. We’llsit down with them and discuss our feedback and thinking. We’ll say something like “When we were discussinghiring you we felt that you were strong in these areas, which is why we hiredyou, and we thought that you could be develop further in these other areas.What resonates with you and which ones would you like focus on as areas todevelop and grow?” Then after about three weeks our Head of Talent willinterview them about the onboarding process to figure out how to improve the itfurther.

The weekly values review

We’vebeen reviewing the values every Friday for about three years now. Every Fridaywe spend 30 minutes doing a whole company weekly retrospective on whether we’re getting closer to or further away from ourideal, from a values point of view. We spotlight one of the values that we needto explore and think about further, and we will then spend two weeks on thattheme. In week one, we go deep into the problem and in week two we focus oncreating a solution.

To kick the session off in the first week Iintroduce the subject matter and the team then breaks off into small groups ofabout four or five where they spend 20 minutes talking about the chosen topic.Next we bring all the groups together and for the last 10 minutes arepresentative from each group summarises the conversation they had andhighlights any problems, insights or ideas that came from their discussion. Wethen define what we believe the biggest problem is that we are facing with thatvalue, and we make sure to capture notes and share them with everyone in thebusiness.

During the second week, each team comes up withan idea for an experiment to improvethe biggest problem we defined the week before. At the end of week two thegroups each propose one experiment to solve the problem and the chair selectsthe experiment that has the most support. Each experiment runs for up to sixweeks and we discuss the progress of the experiment every Tuesday at lunch aspart of our company stand up. At the end of the six weeks the owner of theexperiment gives an update on how things are progressing. If the experiment hasimproved things, we keep it. If it hasn’t, we don’t.

As you can imagine, there are a significant numberof experiments that we tried which have remained part of our businessprocesses. For example, during any meeting with substance, we always end the meeting five minutes before it isdue to finish and one teammate says what went well and what could have gonebetter, in reference to one of our values. We call this “five minute feedback.”

How do you ensure that your culture is livedconsistently between your office and your warehouse?

It’sa challenge to ensure the culture is lived consistently in the warehouse aswell as the office. It doesn’t just happenautomatically. Having a strong, values-orientated culture in one location doesn’t mean you’llautomatically get the same in the second location. Before we separated ourheadquarters from the warehouse, it wasn’tan issue because the fulfilment team would have lunch, attend some meetings andinteract with everybody else on a daily basis. When the two sites split, we needed to figure out how we recreate that sharedculture. Many people in the warehouse see the job as a great way of earningextra income, but don’t see Thread astheir long-term career plan, which is totally fine, as long as they’re happy, work hard and we provide them a greatenvironment. The tricky part for us was to figure out how to get buy in to thevalues when somebody wasn’t going to be here for the long haul.

Acknowledging when the values are being lived

We use Slack for internal communications, and wehave a specific values channel where people celebrate other people forachieving success or living the values. People name each other all time and addan emoji icon to say thanks or well done.

We also have a fun thing where one of our opspeople created a bingo card with different values-based actions on it, forexample “I improved a process” or “I gave feedback to somebody who wasn’t on my team.” When you take one of thoseactions, you can tick it off on your card and when you have a full house, youshout “Bingo” on Slack. It’spretty cool.

In the all hands meeting on Friday afternoons wefinish with “well done” and “thank you,” where team members can acknowledgeeach other. This is a great way to end the week on a high.

We offer unlimited vacation. We also have a10-year exercise window on equity, instead of the standard 90 days, as Ibelieve the standard exercise window is unfair to less wealthy people. Weprovide catered lunch three days a week, and have team lunch on Thursdays whereyou get randomly assigned into a group of 6-7 people and you all go out to eatlunch in a restaurant together. This encourages getting to know one another.

Growing the team

I try to avoid hyper-growth because I think itwill be toxic for our culture. It’sreally hard to maintain the quality of your culture through hyper-growth and we’re not in an industry that requires a land-grabapproach. If a business is a process innovation type business, whether it’s technical or not, it is often a land grabbecause you need to be the first person to get to scale in that marketplacewith whatever it is you’re doing. WithThread, building a stylist AI is a very hard technical problem to solve, so it’s less a land grab and more about nailing thequality of the product experience and then scaling the business.

I feel like my brain’s always churning, trying to solve a puzzle. Ithappens involuntarily and is non-stop. Sometimes it’s working on strategy, sometimes product, butoften it’s team andculture. I’d say maybe 30% ofthe time I’m thinking about and reflecting on culture.