"If you do the same things everyone else is doing, you’re hiring average candidates."

Kieran O’Neill and Ben Phillips co-founded Thread, an online personal style service for men (although the service for women is in the pipeline) that combines algorithms and AI with actual stylists to “dress well without trying.” Thread users complete a quick quiz when they sign 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 at Thread. From the very beginning, Ben (my co-founder) and I had a clear idea about 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 this conversation going in the following months. By the sixth month we had narrowed it down to a set of seven values that we would run the business by. Those seven values are:

•      User experience obsessed

•      Uncomfortably fast

•      Extreme clarity

•      Candour

•      Relentless self-iteration

•      Enjoy the journey together

•      Act like 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 we discussed company culture and defining our values as a set of guiding principles for the company. We all came together with different ideas and wrote them up on the white board, coming up with about 30 adjectives. The process from there was to discuss and debate them. I think we whittled it down to 10 or 12 ideas in that first session. We came back in a second session and narrowed the list again to our seven values. It was important to me that each person could remember and actually use them, so ten or twelve was too many. We are building a great company and we understood that defining our values and building a strong culture is a key part of a great company.

I think candour is the hardest of our values to live up to because in England there is a societal culture of being polite and somewhat indirect. It’s also harder because it’s the one value that 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 upside of that interaction for the intern is small. The best outcome for the intern is the CEO thinking she’s great because she gave feedback. The downside is getting fired or getting blackballed if the CEO doesn’t actually practice what they preach and takes offence to what was said. In order to promote candour you need to create a trusted environment where your people are able 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, the values 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 that has a great culture, which in turn is supported by the company values. In the beginning, when there were only a few of us, the mission was really self-evident so we didn’t formalise the wording. We would talk about it in conversations and everyone would be part of those conversations. On the other hand we formalised the values very quickly and they became a huge part of the business. As we started to grow the team, I realised that the mission actually needed to be formalised because once we had grown to 15 or 20 people it was no longer obvious.

We went through a process of trying to write it down and I found that incredibly challenging because for me, it’s a concept or an idea. We had to turn the idea of 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 is a bit weak, then the whole company is weak. I found it very hard to find something as catchy as AirBnB’s “Belong anywhere” or Microsoft’s mission statement during the 80s, which was “A computer on every desk and in every home.” These are very, simple powerful messages and I couldn’t simplify what we do to that extent. We ended up with a mission that directly explained the “why,” although it lacked the catchy metaphors I was looking for: “Help people to feel happier and more self-confident by making it easy to dress well.”

Integrating the values into the hiring process

Very few companies have unique hiring practices and if you do the same things everyone else is doing, you’re hiring average candidates. Our 17th employee was an incredible recruiter who was at Facebook in the early days and had helped build out the team there. She was the first person I would go to for advice in the early days when I was building out the Thread team, and at some point instead of asking her for advice I approached her to join us. Most businesses would hire a full time recruiter when they had grown to 30-50 employees. Bringing her in at 17 employees was a commitment to quality and building 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 applicant passes that, they do an onsite test where we evaluate their functional skills, and then there’s a second onsite where 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 interview is standardised so that we can compare the candidates on a like-for-like basis.

The interviewers score the candidates against the questions they ask and for each answer they’ll give a score between one and seven, where seven is excellent, six is very good, five is good and so on. The interviewer gives a score as well as indicating their confidence in that score. We have a minimum 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 about how 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 study test for every role we hire for. If it’s a brand new role, we ask people from outside the business, who we know are experts, to help us refine the exercise we’ve developed in house. Every candidate that we put through the process will do the bespoke exercise and we rule out 80-90% of the candidates from that exercise. We invite the ones who pass the custom exercise test to onsite interviews.

We also create a hiring spec document, which lists out what we’re expecting and how good out of seven they should be in each of the role specifications. We take each criterion and either design standardised interview questions or create an onsite exercise around it. We believe that you can asses some things in an interview format, but that there are many areas that you can’t. Interviews are limited in their value and are not 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 of Finance, their first round onsite consisted of three exercises and two interviews, having already done the remote exercise as well. At the end of that first round, the candidates had done four different tests covering the different key areas such as strategy and analytical thinking. Our process gives us a clear indication of how good the candidates actually are at these skills, whereas an interview simply shows whether people can describe examples of when they 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 they were good performers. For me the biggest test of how much you live your values is in whether you reject a candidate who is awesome at his job functional skills 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 am sorry — you don’t match our values.” That has happened at Thread. The team has pushed me on it and I’ve pushed them on it. It’s not just about me as CEO being the ‘values guy’; it’s everybody’s responsibility.

Onboarding

Once an offer is accepted, we’ll find out what equipment they want so that when they start, everything is set up from day one. We send a copy of the values document and company handbook so they’ve got that internalised before they start, too. Before they start, their hiring manager writes what we call an Excellence Document, which lists out what excellent performance in the job looks like.

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

On their desk they will find a computer, a set of office 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 to the intranet.

On their first day every new joiner sends out an email to the whole company to introduce themselves and we also have a link where they can read everyone else’s first day emails.

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

Every new employee starts with a development plan based on feedback from the interview process, so from day one they’re improving and getting better. We basically review the candidate’s interviews and we take the weaker areas that we identified in the process and we turn that into a development plan. We’ll sit down with them and discuss our feedback and thinking. We’ll say something like “When we were discussing hiring you we felt that you were strong in these areas, which is why we hired you, 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 to develop and grow?” Then after about three weeks our Head of Talent will interview them about the onboarding process to figure out how to improve the it further.

The weekly values review

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

To kick the session off in the first week I introduce the subject matter and the team then breaks off into small groups of about 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 a representative from each group summarises the conversation they had and highlights any problems, insights or ideas that came from their discussion. We then define what we believe the biggest problem is that we are facing with that value, and we make sure to capture notes and share them with everyone in the business.

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

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

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

It’s a challenge to ensure the culture is lived consistently in the warehouse as well as the office. It doesn’t just happen automatically. Having a strong, values-orientated culture in one location doesn’t mean you’ll automatically get the same in the second location. Before we separated our headquarters from the warehouse, it wasn’t an issue because the fulfilment team would have lunch, attend some meetings and interact with everybody else on a daily basis. When the two sites split, we needed to figure out how we recreate that shared culture. Many people in the warehouse see the job as a great way of earning extra income, but don’t see Thread as their long-term career plan, which is totally fine, as long as they’re happy, work hard and we provide them a great environment. The tricky part for us was to figure out how to get buy in to the values 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 we have a specific values channel where people celebrate other people for achieving success or living the values. People name each other all time and add an emoji icon to say thanks or well done.

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

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

We offer unlimited vacation. We also have a 10-year exercise window on equity, instead of the standard 90 days, as I believe the standard exercise window is unfair to less wealthy people. We provide catered lunch three days a week, and have team lunch on Thursdays where you get randomly assigned into a group of 6-7 people and you all go out to eat lunch in a restaurant together. This encourages getting to know one another.

Growing the team

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

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