One of the most critical but challenging things for any startup is building a high-performance team that is engaged, inspired, and motivated. Young startups often ignore this in service of chasing product-market fit, but building a company is as important as developing a product. Successful startups do both.
At Prefect, we began investing in culture and HR infrastructure very early, and have seen considerable tangible ROI for our company and our team as a result. We firmly believe in empowering our team through positive structures, as this enables them to do the best work of their careers. We trust our team to solve problems and execute, and the team trusts the company in turn to support them in their personal and professional endeavors.
We approach building a team with the same objective as our product: eliminating negative engineering, i.e. wasted time. We strive to create an environment where people are able to focus on the job they were hired to do, rather than waste time with unproductive tasks that aren't driving the company forward. This “internal negative engineering” includes frustrations familiar to many startup founders and employees: lack of direction, unclear goals, and misaligned expectations. Reducing these frictions results in a much higher-performing team, and more time freed up to focus on proactively building our company and product. In addition, these problems compound over time. In the worst case, the problems themselves become the company's culture, too ingrained to extricate. Positive structures must be put in place as soon as possible so that bad habits and cut corners don’t become “just the way it is.”
There is no easy path to achieving this, which is why many companies outsource their culture to happy hours, foosball tables, and snacks. And while those are all great, it's easy to do so much better. One of the benefits of working with the Prefect Advisory Board is that we have access to expert knowledge that lets us see the future with greater clarity. By implementing structures today that we know we'll need tomorrow, we gain an automatic advantage.
Therefore, we have condensed a lot of what we learned into an actionable plan for building internal infrastructure at the earliest opportunity. Don’t worry, we’re just as allergic to bureaucracy as you are; but we believe that positive corporate structures can and should exist to enhance exceptional teams, not hinder them. We hope you find this guide helpful on your own journey.
The Hitchhiker’s Guide to the Company
As an open source company, we believe in the value of learning in the open, which is why we’ve created this practical “how-to” guide for other companies to eliminate their own internal negative engineering. We’ve based it on best practices learned from our incredible investors and advisors, as well as our own experiences. The guide is structured in chronological order and details the steps we took to build our team:
Determine a Vision
Define Your Culture
Hire, Onboard, and Train
Step 1: Determine a Vision
All strategies at Prefect involve a “vision” and a “mission.” The vision is an idealized objective that provides a constant North Star for the strategy. Prefect’s company-wide vision is being the standard in dataflow automation. The mission is how the vision can be achieved, and is meant to be actionable and useful in evaluating decisions. Prefect’s company-wide mission is to eliminate negative engineering. All organizations, teams, and even products have their own vision/mission pairs that dictate their strategic imperatives and roll up to the company-wide ones. One trick we learned is that a good mission statement should be able to explain any decision the company makes by adding it to the end of a sentence. As a simple example: we build powerful workflow software in order to eliminate negative engineering.
When hiring, it is just as important to define a clear vision and mission. Once a vision is defined, the mission can be formed from the company’s culture: it is the way the vision will be achieved. Together, they completely guide all subsequent decisions around the nuanced task of building a team.
The Prefect Way
A North Star for Prefect’s team vision is the delivery of value to our users, customers, partners, and ecosystem. We seek a team that is deeply user-empathetic and excited to invent solutions to the painful problems that we observe. However, we recognize that as a startup, we are necessarily operating and innovating in a space that is either nascent, poorly understood, or for some reason not obvious to incumbents. Therefore, our team must be composed of proactive, intrepid, and curious individuals who can identify problems, take ownership of them, and deliver value through their compounded efforts. It is by empowering such individuals that we can excel at a high level as a team.
Our vision enables every employee to maximize their potential and do the best work of their career. It is critical for the company to ensure that each person always has an objective that is engaging but also challenging. We want to be constantly leveling up, and as a team we must therefore seek new levels and help each other achieve them. This can extend to surprising places: even our sales team has an imperative to "deliver value, don't extract it" that guides their customer interactions at a fundamental level.
We recognize that our vision can only come into fruition by hiring a team diverse in thought, background, makeup, and experience. In order to make decisions under uncertainty, this diversity is crucial in order to bring different perspectives and ideas to the table. It’s essential to build this into your hiring as early as possible. As with other facets of culture and team-building, issues compound over time, and become incredibly difficult - if not impossible - to fix later on.
Once we developed a notion of how our team should operate, we independently met with all team members, seeking to understand their perception of the company and vision. This allowed us to tackle the next steps from a place of mutual understanding, and ultimately helped foster the team’s buy-in and engagement. A basic tenant of our philosophy is that people support what they help create.
Step 2: Define Your Culture
If the vision supplies the idealistic North Star, the culture is the mission statement by which we move forward. It defines our aspirations and benchmarks our progress. It ensures that we work together effectively to achieve our company’s own objectives. We think of culture as the “operating system of the company:” always running in the background, it instructs how people collaborate, interact, and make decisions.
There is no “right” culture; every company is different. Ours found inspiration in concepts both serious and playful, but all in service of helping our company quickly and positively make decisions under uncertainty. Two books that we found especially influential are Ed Catmull’s Creativity, Inc. (which describes the iterative and collaborative environment that empowers Pixar to be one of the world’s greatest companies) and Douglas Adams’ The Hitchhiker's Guide to the Galaxy (which represents our positive spirit, as well as the importance of really understanding the Question, not just the Answer). Therefore, every Prefect job offer is accompanied by a copy of Creativity Inc., to show the environment we aspire to build; and every new employee is greeted with The Hitchhiker’s Guide to the Galaxy, because it has the words “Don’t Panic” inscribed in large friendly letters on its cover.
In addition to these cultural touchstones, we embrace ideals like transparency, iterative experimentation, diversity, safe spaces to share ideas, terrible terrible puns, rapid and inexpensive failure, curiosity, problem-solving, and our mascot Marvin the Duck. The amalgamation of these concepts creates our culture; however, saying culture and building culture are two very different things. Some companies stop at the concept stage, but we will walk you through how we transformed this melting pot of ideas into our culture reality.
The tangible parts of our culture are codified in two categories: values and standards. Our values are aspirational, and our standards are what we must uphold every day. Most startups declare a set of values and stop there; we found that because values are aspirational, they are not actionable and don’t provide the team with a clear set of expectations. Having only nebulous values is like having a vision with no mission. Therefore, we created our standards, which are how we hold ourselves accountable. These standards are baked into every facet of our company, but they are not static; we revisit and modify them as needed to ensure that we are performing at our best.
The Prefect Way
We defined our company’s values early on: Learning, Empowerment, and Execution. These were carefully considered based on our vision, and how the team understood our culture (and how they desired it to be). Nebulous and numerous concepts are difficult to communicate and uphold, which is why naming a discrete set of them is a critical step.
Learning: As a startup building innovative solutions, we should constantly be encountering new ideas or decisions. We do not expect our employees to arrive with every answer, but we do expect them to know how to discover them. Working at the forefront of technology, being able to adapt to new information is a critical skill.
Empowerment: We do not operate as a strict hierarchy; we expect every employee to be empowered to make decisions about their role. Moreover, we expect everyone to be constantly pushing the envelope by seeking new means of value delivery. The goal of our transparent culture is to assist in making those decisions by providing guidelines for aligning one’s self with the company’s objectives.
Execution: Ultimately, execution is what matters. All the learning and decision-making in the world won’t matter if we can’t execute and deliver the right solutions at the right time. Execution is the point on which the entire company balances.
Our next step was to develop a list of standards. We call this document “The Prefect Way,” because it defines the manner in which we conduct ourselves on a daily basis and hold each other accountable. The Prefect Way provides the team with a clear set of expectations; as we did with our values, we named every expectation so that they can easily be communicated and upheld. Here are a few examples:
Saying “I don’t know.” It can sometimes be difficult for people to admit the limitations of their knowledge. However, it is critical to do so, as one of our aspirational values is learning and we welcome the opportunity to improve. The worst outcome would be pretending we have expertise where we don’t. Therefore, we made saying “I don’t know” a core standard at Prefect; if you’re not saying this on a daily basis, your work isn’t interesting enough.
We must avoid inertial thinking, and quickly adapt to new situations. Inertial thinking is the belief that we should do something because we are already doing it. It is a very seductive trap for startups, but it results in making decisions that remain permanent even as new information becomes available. Given the novel nature and inherent uncertainty that surrounds young company, we must constantly re-interrogate every assumption. Our company grows by multiples every period; it’s not possible for the choices we made in one year to remain optimal the next. Inertial thinking is the death of a startup.
Constructive feedback is crucial for our growth. Our entire team has been trained in how to provide feedback, which we view as essential to empowering our team - it enables them to upskill, solve problems, and own the solutions.
We rolled the values and standards out to our team in separate all-hands meetings and devoted full sessions to brainstorming and Q&A. Our goals were to ensure aligned understanding, and enable the team to “think like an owner” by having a hand in building out culture. We were thrilled when the team proactively formed a culture committee responsible for launching new initiatives and events.
Standards don't have to be "big ideas" to be effective. We once noticed that when people were a little late for meetings, it was frustrating to others but always felt disproportionate to call out. Even in a company that prizes transparency and feedback, saying "Please don't be three minutes late" seems quite egregious. However, these minor frustrations can compound into real workplace frictions. Therefore, we added a "punctuality" standard: we show respect for our colleagues by being on time. This idea was uncontroversial and universally applauded, and simply having this standard codified has resulted in much better outcomes.
As a final tip here, emphasize your culture continuously and bake it into your company’s DNA in every way possible; otherwise, it will be forgotten. As Jeff Weiner (LinkedIn’s former CEO) states, you want it to be a consistent drum beat for the team. A few things we do here: bi-annual mini-conferences (we call ours "A More Prefect Union") to lay out strategic plans, lunch and learns, culture carrier shoutouts, weekly all-hands kickoffs.
Step 3: Hire, Onboard, and Train
Now that your framework - vision, values, and standards - is in place, you can find exceptional people who can climb this ladder to maximize their potential. Actually finding and vetting the right hires can be challenging, and some of the most talented candidates may not match your values and standards. Having a solid framework allows you to truly assess them - many companies use the vague term “culture fit” to explain why they passed on a candidate, which is nebulous and often a cop-out, and can allow bias to creep in. Our clearly-defined standards and values allow us to more objectively assess fit and, perhaps more importantly, explain why. It also allows candidates to more accurately decide if Prefect is the sort of company they would want to join! (This is one of the reasons we include Creativity, Inc. with every job offer.) Once you’ve found the right people, a solid onboarding and training plan both demonstrates the company’s investment in their long-term growth, and sets them up for success by setting clear expectations and providing the necessary tools.
We must acknowledge that hiring is especially difficult for young companies, as they do not have easy access to wide pools of candidates. Most companies, including our own, begin by pulling from their own networks. One of the benefits of having robust infrastructure is that it allows your company to graduate from this crutch earlier, and begin to hire from more broad talent pools more easily. This makes it even more important to ensure interviewers are trained in vetting candidates for their fit with our clearly defined values and standards, as opposed to just a vague “culture fit.” In order to build a team diverse in thought, background, and skill, bias cannot be allowed to enter the hiring process; without clear and objective standards, this is incredibly difficult. If your team makeup is the same, creating an environment where different ideas can be developed, shared, and debated is nearly unachievable. Companies need to continuously innovate, and having a team diverse in a variety of ways is crucial to avoid inertial thinking.
The Prefect Way
Positions are opened only after a clear job description and 90 day plan for the role are developed by the hiring manager. The job description lists core responsibilities while the 90 day plan consists of achievable and actionable milestones. Producing both items accomplishes the two following key objectives, while hiring without them often leads to significant and unnecessary internal negative engineering:
There are no surprises, and new hires enter the company knowing exactly what is expected of them, both in regards to the role itself and immediate projects.
The hiring managers are forced to have a clear vision for the role and truly understand what problem the role will solve.
Onboarding & Training
The objective here is to ensure new hires will be successful in their role and have a strong positive first impression of Prefect.
New employees are given a welcome package, which, in addition to sweet Prefect swag, includes their schedule for the first few weeks, lists of internal resources, links to shared learning at Prefect (ex. lunch and learn presentations, our CEO’s media interviews, etc.), and a complete checklist of administrative tasks to complete.
Each new hire is trained on our values and standards by their peers, ensuring those expectations are not only clear but understood in a common way. Our team automatically sets up trainings with members across the organization, where they learn about each area of the business. This allows the new hire to meet teammates they may not normally work with (which is great for remote culture and working cross-functionally), and gives the new hire the tools to begin thinking like an owner, echoing our vision. Trainings are hosted by almost every member of the organization, from peers to executives, and are a great introduction to how we operate as a whole.
Also, in the first week, new hires meet with their manager to discuss role expectations, their 90 day plan, set up both short and long term career goals, and set up a recurring weekly one-on-one. Due to our hiring process, we are all the more confident that the role strongly aligns with a new hire’s career goals which leads to early successes and ultimately long term retention.
Step 4: Performance Management
To maintain the continuous drum beat of our culture, we developed a framework to understand how we’re tracking, which allows us to course correct when necessary and benchmark ourselves against our goals. Having clear, communicated standards and expectations, as well as a universal understanding of how they are applied, makes this far more effective -- and less frightening -- than employees may be expecting.
Once the employee has been successfully hired and onboarded, they now enter an environment of constructive feedback we’ve intentionally created in a few different ways. As with the other steps, the goal is to eliminate negative engineering in order to enable the team to do their best work.
The Prefect Way
Each new manager is trained in setting expectations and providing constructive feedback (another one of our standards), ensuring consistent and productive management across the company. The book Radical Candor is an excellent training tool, as is having managers actually practice giving constructive feedback to each other. Our goal in providing feedback is to help employees continuously grow and improve, and ensure there are no negative surprises, or that negative performance gets out of hand.
As an example, let’s say your employee has missed deadlines twice in a row. You can either become frustrated, or simply state what expectation was missed and offer help in fixing it: “I noticed you’ve missed two deadlines in a row. Let’s discuss what’s preventing you from completing projects on time. As a friendly reminder, one of our company standards is [insert your standard here].”
As briefly mentioned in the Onboarding section, each employee develops with their manager long-term professional goals which should align with their current role and trajectory. If they do not, this is a great early indication that the role is not a good fit. These long-term goals are then broken down into actionable objectives so that employees have a clear path to upskilling themselves.
No system is perfect, but having a simple framework in place goes a long way towards ensuring fairness in comp across the company. Our process is our ultimate tool in accountability around our values, standards, and role expectations.
We conduct 360 style performance reviews at year-end - this is a scalable process that allows managers to assess all areas of a direct report’s performance they may not have seen. A 360 review entails each manager writing a review of their direct reports which incorporates feedback from peers, managers, and the report themself.
Managers are given a matrix to determine if employees are exceeding, meeting, or below expectations - the matrix includes not just role-specific performance, but how the employee embodies our values and standards. The same matrix is provided to employees to ensure transparency. All managers meet with our Compensation Committee so that we can ensure all employees are being assessed in the same way. Performance incentives are tied to where an employee falls in the matrix, which includes role, values, and standards expectations. We do not stack rank, as this creates a competitive environment that we do not want. Any incentives are long-term focused (i.e. equity and raises vs cash bonuses), as this is aligned with our vision.
One of our core beliefs is that if you make average decisions, you get average results. For startups, this often means failure. Building great teams takes considerable effort and energy, and there aren’t any shortcuts. Putting a strong corporate infrastructure in place early will pay enormous dividends down the line; waiting too long may make it impossible to begin. These investments will let your team thrive when it gets tough, tackle the unexpected, and build an environment where people are excited to work. In order for your employees to support your company, you must in turn support them. Having the right infrastructure in place to give the team a common goal and support their growth is a critical part of that.
Just as we leaned on our advisors to help us develop the philosophy we’ve outlined here, we hope this post helps you discover an approach that works well for your team. At Prefect, we are especially grateful to Matt Tucker, Keith Krach, Michael Haft, and Harrison Suarez.
We may not be perfect, but we're doing it The Prefect Way. We hope you find your way, too!
And of course if you'd like to join our team, let us know!