Drawing conclusions

Paul Stannard was sick of hiring employees and then having to fire them within a year.

“I felt like I was just rolling dice,” he says. “I would hire someone who would seem to have all the right qualifications, and then it was evident pretty quickly that the person wasn’t a good fit. I could have thrown darts at a dart board and probably had the same success rate.”

After consulting with executive organizations, the founder and CEO of SmartDraw.com learned that his software company had a firmly entrenched competence culture and that not everyone is wired to succeed in that environment.

Since refocusing his efforts, Stannard has reduced his turnover and grown SmartDraw to 2007 revenue of $11 million.

Smart Business spoke with Stannard about how to keep employees who fit your culture and why sometimes the only option is to clean house.

Q. How do you create a culture in which employees are empowered?

The corporate culture is a total reflection of the CEO, which is me. It’s just the way I am — maybe to a fault. Once I have confidence in someone’s abilities, I’ll basically just give them the reins of what they’re doing and assume they’re going to go off and take care of it. Now, I’m pretty unhappy if they don’t.

There is a name for this: What we have at SmartDraw is called a competence culture. A competence culture is one where the power is with the person who has the most competence in the area we’re talking about. It’s not a hierarchical culture.

If we’re talking about trying to improve shipping, the shipping guy who does this every day [so] everyone in the room is listening to what he has to say. That guy has the expertise, so he’s the one everyone is listening to.

It doesn’t matter what the hierarchy of who reports to who is. So if we’re talking about software development, we’re listening to the software developers.

That’s a competence culture, and the cardinal sin in a competence culture is to not have that competence. If that competence is lost, if the person knows what they’re doing, they’re gone.

If you’re a person who feels confident about what you do, and you have expertise and you want to be able to run with it, SmartDraw is a great place for you. If you are a person who is not all that good at what you do and it comes to light, it isn’t a great place to work and you won’t be here very long.

In that sense, it’s a sink or swim sort of thing.

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