Achieving 'Company Employee Fit' - Lessons from Product Market Fit
Use 'product market fit' principles to find 'company employee fit'
Product market fit is a seminal concept in start-up’s. It’s the single most important goal for the early stages. A concept that product people have poured over. Founders obsessed about. Startup’s have studied to death.
Do you struggle to attract the right calibre of candidates? Do you struggle to get the team to connect to the mission and EVP? Does money seem like the only answer to employee attraction and retention? If so, you have a poor Company Employee Fit. Thankfully learning about Product market fit can get you out of this pickle.
By applying Product market fit principles to PeopleOps, you can form: Company Employee Fit. In PeopleOps as a product fashion, you can use product techniques to create an employment product employees are passionate about. Increasing your employee performance and engagement.
What is product market fit (PMF)?
Product-market fit is when a company's customers are buying and recommending the product. Marc Andreessen coined the term, he defines it as: "finding a good market with a product capable of satisfying that market”. Another definition is that product-market fit occurs when: “your product is something people really want to buy. And you have enough customers to support growth over time.”
Product-market fit means:
1. Your product solves a real problem or need for customers.
2. There is sufficient market demand for your product.
3. Customers are willing to pay for your product because it's better than alternatives.
4. You have enough customers to sustain growth.
Achieving product-market fit indicates you've built the right product in the right market. It's a key milestone that startups must find before scaling.
Applying PMF to create: ‘Company Employee Fit’
In the PeopleOps as a product world, employment at the company is your subscription product. Your job as a People ops person is to build an employment product that Employees subscribe to. Not only subscribe to, but a product which employees really want. An employment product they tell all of their friends about. A product that’s so fitting, the users (employee) love spending time on. Employees become power users and do the best work of their lives.
With this framing, employment is just a vehicle for employees to do great work. We need to provide tools and a canvas for employees to paint their lives work. Moving us from the framing that employees are here to serve companies. To the frame that companies are there to serve employees.
Just as product market fit is key milestone, ‘Company Employee Fit’ is a key milestone that you must find before scaling. Or you’ll suffer from these sour pickles…
How are Employee Value Proposition and ‘Company Employee Fit’ different?
Your Employee Value Proposition (EVP) is the value you will provide. The equivalent in the product world would simply be Value proposition. EVP covers how you position yourself and what you will offer. Hopefully uniquely.
This is one side of the coin, Company Employee Fit is more holistic. It encompasses how your EVP resonates with the market, the availability of talent, the competition and everything else about the market conditions. Company Employee Fit, you may have it one year and it fade away with the changing desires of employees. For example, a remote business like GitLab in 2019 would have had a strong Company market fit for folks that needed remote work. Today, the competitive landscape for remote work is much hotter, hence that Company Employee Fit will have faded.
How do you know when you have: ‘Company Employee Fit’
The easiest way to answer this is to explain the feeling of not having it. When you don’t have Company Employee Fit, it might feel like this pickle:
Offer acceptance: Candidate’s reject your job offers, the offer acceptance is below the market average of 70%.
Regrettable churn: ‘Good fit‘ employees leave in less than 2 years tenure. Some churn is good, your employment product isn’t right for everyone.
Weak values fit: Employees aren’t connected to the company values. They can’t recite the company values from memory. They’re not there for the culture.
Hybrid / in-office fit: If you struggle to get employees into the office the number of days you’d like, then you have an employment product that isn’t a fit.
Employee conflict: The people team spend a good chunk of their time on conflict resolution, then you have a bug in your employment product.
Performance management: More than 2% of your workforce is on a performance improvement pickle. Some improvement plans are inevitable, but with more than 2%, then you’re pickled.
Management problems: Whether you actually have weak management or not. When the people team think managers need more training, there’s underlying problems.
When you do have Company Employee Fit, it feels like this
Positive employee feedback: Frequent and positive feedback, including unsolicited public endorsements or recommendations to friends.
Close EVP match: a large portion of the EVP is resonating with the current employees. The EVP is well understood and employees can articulate what value they get from your employment product over the competition.
Strong employee retention: If employees remain employees and choose to keep subscribing to your product, it indicates satisfaction and value.
Job application growth: An increase in inbound interest in applicant rates, through organic traffic, indicates growing demand for your product.
High engagement metrics: employees are highly engaged in the companies, mission, vision, values, benefits. They are engaged in the long term success.
Low Customer Acquisition Cost (CAC): You don’t have to spend on lavish lunches, extended off-sites or expensive perks to keep employees happy.
Net Promoter Score (NPS): A high NPS indicates that your customers are likely to recommend your product to others, reflecting satisfaction and loyalty.
Customer Willingness to Pay: employees are willing to exchange their time and effort and would happily work overtime for employment product without hesitation.
Techniques to improve: ‘Company Employee Fit’
The techniques for finding product market fit can be boiled down to: speak to your customers, find out what they want, segment and iterate. I wrote about employee interviewing techniques in a recent post. Here’s my adaptation of the most popular process to improve product market fit:
Survey employees with the question "How would you feel if X company didn’t exist for you to work at?” This should be a multi choice question with the options:
Devastated
Very disappointed
Mildly disappointed
Wouldn’t mind
If 70%+ respond "Devastated" without your employment product, it indicates you’ve achieved Company Employee Fit.
Include additional questions:
Segment participants: remove the responses from participants that responded: ‘mildly disappointed’ or ‘wouldn’t mind’. It’s unlikely these employees have the capacity to reach: Company Employee Fit with your company. Ultimately it would be better for the company and the employee that they subscribed to a better suited employment product. You need to optimise for employees in which there’s some level of fit. These are the people that answered: ‘devastated’ or ‘very disappointed’ in your survey.
Create a roadmap based on responses: take the responses to when you did and didn’t do your best work questions from the remaining rows of employees. This should leave you with descriptions of behaviours and the work environment that employees would thrive in. Descriptions only from employees that have the capacity to reach Company Employee Fit with your company.
Implement changes and repeat the survey process to track progress. If the percentage of employees that are responding “Devastated“ to your survey increases. Then you are successfully increasing your Company Employee Fit score.
I wrote recently why employee interviews are a better way to collect employee feedback than surveys. But interviewing will pose a problem in this process. We need participants to remain anonymous so best to stick to surveys in this case.
I appreciate this might be controversial due to its potential to narrow fit and narrow diversity. But it is essential that you build an employment product which resonates strongly with a group of people. To ensure you don’t get into a diversity pickle you need to be very careful about what you take away from your survey. You need to ensure your inputs are inclusive. If the replies to any or the questions make reference to demographics or groups, exclude these entries.
This might seem risky to be segmenting employees. But if you don’t do this and try to speak to everybody, your employment product will speak to nobody.
Employee fit masked by money
Product market fit is about finding your fit in the market before you scale. Before you start spending lots more money to grow and attract users of your employment product. Hence you can use money to put masking tape over a weak employment product. You can create an attractive employment product through spending over the odds. The problem with using money to create Company Employee Fit is that it’s not defensible. It’s completely re-createable by every other company that has money. In the startup world, investors would not find this product attractive and would predict that they will struggle to grow and reach it’s full potential.
The problem with scaling before you have Company Employee Fit is because it’s easy to attract employees with money. Just like you can grow almost any product if you spend enough on marketing. Just spend money then you don’t have to work to hard? This seems like a shortcut but it’s actually a trap. You’ll develop an employment product which is shiny on the outside but hollow on the inner. You attract the wrong type of employees who don’t actually care about your mission or resonate with your culture.
In the startup world, many overfunded companies have fallen into this trap and got themselves into a pretty pickle. Jawbone, Powa and Cazoo are examples of companies that raised obscene amounts of money and people are shocked that they were pickled so quickly.
On the flipside companies like Buffer raised £3m and have world famous culture. They were able to differentiate their employment product by being radically transparent, this carved out their niche so they are the most attractive employee for employees who transparency is important. Basecamp with no external funding found their Company Employee Fit by indexing on fairness and work life balance.
You want to try and develop your employment product with as few resources as possible. Differentiating on the company behaviours, rituals, everything that makes up culture. This is very hard to foster and therefore hard to copy. Therefore, is a much more defensible employment product in the employment market.
You may have: ‘Company Employee Fit‘ in certain teams
Some teams may have company employee fit and others may not. If you selling the market leading customer support product. You probably have a stronger fit in the customer support function. Or if you have a hot technical product all the developers in the world want to use, then you’ll have a stronger fit in development teams. You will recognise this if you have a wide disparity of attraction and retention problems across teams. This can be mask a Company Employee Fit problem. You really want the core value or the business to be the culture, the mission the values. This drives employee subscription for all the right reasons.
Conclusion
This concept of Company Employee Fit is critical for fostering a thriving, high-performance workplace. It involves understanding and addressing the factors that lead to high offer acceptance rates, low regrettable churn, strong alignment with company values, and overall employee satisfaction and engagement. Techniques such as regular surveys, targeted interviews, and thoughtful segmentation help identify and implement the changes necessary to enhance this fit.
Avoiding the pitfalls of scaling prematurely and relying excessively on financial incentives is vital. Instead, focusing on intrinsic motivators and building a robust, values-driven culture will create a more sustainable and defensible employment product. The successes of companies like Buffer and Basecamp illustrate the power of cultivating a unique and appealing workplace culture without over reliance on monetary resources.
Ultimately, achieving Company Employee Fit is about creating an employment product that employees are passionate about and committed to. It’s about fostering a work environment where employees can do their best work, feel valued, and grow with the company. Life is like a jar of pickles; what you get out of it depends on how far you stick your hand in.