Rick Girard: Maximizing transparency and trust. This bold step can thrust one company toward massive success. I'm Rick Girard, and welcome to the Higher Power Radio Show. Our mission is to discuss and deconstruct insights from top performing entrepreneurs and industry experts. Every week, we uncover tested tactical solutions to solve your company's most difficult hiring challenges. Today, our guest is Ville Houttu, the Founder and CEO of Vincit California.
Rick Girard: Ville was previously from Sweden.
Ville Houttu: Finland.
Rick Girard: Finland. Sorry. Oh. And actually helped to take Vincit public back in 2000 ...
Ville Houttu: 16.
Rick Girard: After the IPO, he moved to California to start Vincit California, the local city area, and during the first year of operations, he built a team of 20 developers in Irvine, and acquired OC's hottest digital brand agency Xtopoly. Is that one right? Sweet. At least I didn't get three in a row.
Rick Girard: The team operates in Irvine, Palo Alto, where they help companies such as Logitech and Yamaha, develop their mobile apps and digital services.
Rick Girard: Hey, fun fact, you also play steel guitar.
Ville Houttu: Yes I do.
Rick Girard: Welcome to the Higher Power Radio Show today.
Ville Houttu: Thank you. Good to be here.
Rick Girard: All right. So wait, steel guitar. You have albums on Spotify, and I know I don't want to embarrass you but that's impressive. It's cool.
Ville Houttu: Yeah. The albums are all in Finnish, but I'll send you the links.
Rick Girard: All right. So today, we're going to cover a couple things. You guys have built a really outstanding, really unique culture around transparency, and we're going to talk about kind of what true transparency is, proactive leadership, and how the structure attracts outstanding people. Sound good to you?
Ville Houttu: Sounds good.
Rick Girard: Awesome. So let's start with transparency, because you guys have built a really unique model. I know that I met you Disrupt HR.
Ville Houttu: Mm-hmm (affirmative).
Rick Girard: And you were giving a breakdown of how you guys did it. So, tell me a little bit about that.
Ville Houttu: Yeah. The talk I was giving at the Disrupt HR was actually about removing middle management from the organization. And how we ended up doing that, so just five years ago, we were 220 employees, and running a pretty typical organization where you have management, then you have HR, sales, middle managers, and then you have employees under reporting to the management.
Ville Houttu: And we found out that neither the managers or the employees were that happy, because the managers were actually developers who were promoted to that position and the only thing they wanted to do was to code.
Ville Houttu: And the employees, they had crappy managers because the managers didn't really want to be managers. So, we had to do something. What we did was we removed the middle management, and moved them into more value creating jobs.
Rick Girard: Got it. And so, as a result, how did that affect productivity in the culture?
Ville Houttu: Of course. When you remove middle management, the whole system changes. We sort of ... I like to say, we replaced the whole middle management layer with transparency and trust, so we-
Ville Houttu: The shift we had to make was to enable our employees to make big decisions, and by enabling, I mean they have to mandate, they have the right to make big decisions, but that they also have to have enough information to be able to do that, and that's the transparency.
Rick Girard: Okay. Now, what did you guys do specifically on the transparency side? Did you open up everything for everybody to see? Because that's typically what transparency would be, I think, from a financial standpoint, and everything else, right?
Ville Houttu: Yeah. Yeah. So, they have access to all the information they want, and on top of that, they can walk into any meetings. If it's a board meeting, or us doing a group meeting thing, and walk in, so it's an open door policy, even though we don't really have policies, but that's how we call it.
Rick Girard: Okay. Got it. Now, you were telling me that you also make things like salary available for everybody to kind of see, right?
Ville Houttu: Yeah.
Rick Girard: How does that work?
Ville Houttu: It surprisingly worked. When we opened up the salaries, we were expecting a lot of questions and we cleared our calendars for two days so that we can meet all the people when they have questions. "Why is my salary this, and why his salary or her salary is like that?"
Ville Houttu: And when we did it, we received two questions. And so, people took it really well, but I guess, the thing is, one, the reason we actually did it was once we enable the employees to recommend a raise for their colleague because they work with their colleagues, and they see how they perform. So, we want to enable that, and to be able to do that, we opened the salaries.
Rick Girard: That's a really bold move, and I'm sure right now that if any CEOs that are listening to us right now are probably falling out of their chairs. How did you guys come to that decision?
Ville Houttu: It's like many of the things we've done, and will do, is we will come up with an idea, and we'll execute it. And if it doesn't work, we'll change it pretty fast. But, this thing happened to work. I'm not saying it’s going to works forever. It might change, but for now, so far so good.
Rick Girard: That's very cool. So, I would imagine that the employees are a lot more engaged because of it, because they don't really have to guess what Johnny over there is making compared to me. They already know.
Ville Houttu: Yeah. It sort of removes the gossiping, or the need for gossiping.
Rick Girard: Yeah. And I would imagine too, the other thing is, it would kind of create a system of checks and balances, where if I know that so and so's making more than me, maybe I can work a little bit harder in order for me to get to his level, or vice versa. Right?
Ville Houttu: Yeah. That's a really good point, because when you want a raise, it's easier for you sort of benchmark yourself against other people and their level of competence.
Rick Girard: So, the other question that I would want to pose is has there been a challenge on the hiring front though, as far as attracting people? If you get people who have over-inflated salaries, like you get here in California.
Ville Houttu: No challenges as such, but I think our work culture is not for everybody, and we have to acknowledge it. So, some people like to have more management, more direct orders. They like to report to someone, and they don't like free flexible work time, and so on. And I'm really happy to be able to say that, don't apply if you like that. The way we work is with a lot of flexibility, trust, but also responsibility.
Rick Girard: That's awesome. That's awesome. So, you eliminated middle management. You put out kind of all the salary information. Anything else on the transparency side that you guys are open to?
Ville Houttu: Yeah. I think one of the things companies would be easy to pilot, would be the credit cards. So, just to add to the trust factor. So, in our company, all of the employees who want a company credit card, they can get one.
Rick Girard: Oh really? That's brave too.
Ville Houttu: Not all people do. But, most of them have company credit card, and they can make any purchases that are taking us further into becoming a better work place.
Rick Girard: Business related.
Ville Houttu: Yeah.
Rick Girard: They're not going out and buying shoes with it.
Ville Houttu: Sometimes they do, but we'll deal with it later.
Rick Girard: I need a new wardrobe. All right. Very cool. So, I can see how this transparency would kind of maximize trust, and then you kind of are building in the trust factor by offering a credit card, which would kind of further solidify it. What do you do on the leadership side? Like, what are you doing to kind of build that trust even more?
Ville Houttu: I guess like the whole way we see management is we don't believe in the top down model, where you assume that all the employees who are actually individuals have the same needs, because they don't.
Ville Houttu: They are individuals with different needs, dreams, and visions for their future. That's why we created something we call Leadership As A Service. LAAS.
Ville Houttu: And so, instead of sort of leading with policies and restrictions, or rules, we listen, we try to listen to the employees and react to whatever they need, or want, and we created a product for that. It's a platform where all the employees, they have an easy way to sort of order these management services from me
and the other managers at the company.
Rick Girard: Doesn't that create a lot more work for you though?
Ville Houttu: No. You would think that thought.
Rick Girard: Yeah.
Ville Houttu: But actually, it's less, because let's take performance discussions as an example.
Ville Houttu: Not all the people want to have twice a year performance discussions.
Ville Houttu: But usually, it's what companies do.
Rick Girard: The dreaded performance review.
Ville Houttu: Exactly. And we've noticed ... but then again, so we don't have that twice a year discussion we discuss every time when an employee wants to discuss.
Ville Houttu: So, just sign up using the LAAS tool, and ordering a chat, or a discussion, you'll get one. So it's less work than you'd think.
Rick Girard: Because you're actually getting the employer to be proactive in their own career, right?
Ville Houttu: Yeah.
Rick Girard: I like it.
Ville Houttu: And if something is broken, you can fix it. Like, if you don't have coffee milk you like at the office, you can just order it. Instead of getting an approval for ordering it.
Ville Houttu: For managers, it's less work, because they don't have to do simple things like that.
Rick Girard: Now, do you find that people are willing to do that? Because a lot of people just don't speak up, or they don't say anything.
Ville Houttu: It does need a push.
Ville Houttu: In the beginning, and especially I think because there aren't that many companies who operate like us, so when people move from a company to our culture, it takes them half a year.
Rick Girard: Yeah. Oh, for them to settle in?
Ville Houttu: Yeah. To settle in, and sort of learn to work the way we do.
Rick Girard: See, when I heard your talk, I love things that are disruptive, and so I was totally thrilled to have you on today, because-
Ville Houttu: Thanks.
Rick Girard: I think that wow, doing this whole paradigm shift like this is what a lot of companies need to do, but they just are too afraid to do it.
Ville Houttu: I know. Yeah. It is. It is a change.
Ville Houttu: And it works for us. I'm not saying it works for everybody or every company. But for us, it works.
Rick Girard: Well, I think it works too because you've already come from that. You're the leader of the company, so you're already a living example of it, right? So I would imagine when you take a seasoned leadership team that's not really used to it, and you're trying to put this in there, I would imagine that it could be disastrous.
Ville Houttu: I'll have to try it once.
Rick Girard: It might be a fun experiment. We're talking to Ville Houttu, the Founder and CEO of Vincit California. We're going to take a quick break, but when we come back, we're going to talk about how this translates to the interview process, and what kind of results you should get. Be right back.
Audio Recording: You're listening to Hire Power with Rick Girard, giving you access to recruiting techniques that will help you hire key talent to build your company towards real success. Rick is a recruiting executive and entrepreneur who's been successfully recruiting in the aggressive Silicon Valley technology landscape for the past two decades. After a very successful stint at Apogee, he founded Stride Search in 2012.
Audio Recording: Based on a lean efficiency model, Stride is uniquely positioned itself as a leader in retained search for the most critical talent hires within a small organization. Whether you're a start-up executive, or recruiting professional, by listening to Higher Power with Rick Girard, you will walk away with skills to help you attract and hire great talent. Now back to Hire Power with Rick Girard.
Rick Girard: Welcome back to the Higher Power radio show. I'm your host, Rick Girard, and our guest today is Ville Houttu, the Founder and CEO of Vincit California. So, we just discussed transparency and trust, and kind of some of the unique aspects of how Vincit puts those cultural values into play. Now, we're going to explore how this kind of translates into the hiring process, and what kind of results you get.
Rick Girard: So, let's talk about hiring. I would imagine when you bring in somebody new, and you're explaining these concepts, it might be a little bit of a sticker shock.
Ville Houttu: It is, and that's part of why we have three step interview process.
Ville Houttu: We have three sessions with the candidate, and we can explain these things. So, I think a part of it is for giving them an opportunity to interview us, more ore than us interviewing them, and-
Rick Girard: Making it two way.
Ville Houttu: Yeah.
Ville Houttu: It's the cultural fit is the most important thing we try to figure out.
Rick Girard: Yeah, absolutely. So, I always kind of ... I always stress the fact that it's got to be a fit for both people. You can't try and put somebody who doesn't fit your culture in there because they have skills into a role, and expect that that's going to work out well. It may, but probably won't.
Ville Houttu: Yeah. I feel like it contains everything else, except the culture.
Ville Houttu: And all companies have a unique culture. They are all different.
Ville Houttu: So you either fit, or you don't.
Ville Houttu: All the other things you can teach.
Rick Girard: Yeah. It's like putting the start-up person into a large company culture. They're not going to probably work out well for whatever reason, right?
Ville Houttu: Right.
Rick Girard: So, what would you say would be, when you first started hiring, and you started kind of building your team out here, what was the kind of first shock moment for you as far as kind of what you learned in this process?
Ville Houttu: No, I've been saying we were extremely lucky having the first four employees really successful hires.
Ville Houttu: And it all sort of showed us the other way we've been on now, hiring one or two employees per month.
Ville Houttu: But we really haven't changed anything, so you would think coming from Finland, Scandinavia, it would be all that different, but it is not. We really haven't changed the interview process at all.
Ville Houttu: And we have the first interview, which is with the HR, and a developer or designer.
Ville Houttu: Depending on which position you're looking for. The second interview will be technical.
Ville Houttu: And it's a team situation where you would solve a problem.
Rick Girard: So it's a collaborative effort?
Ville Houttu: It is and it's a dialogue. And so it's more like, again, trying to find out whether the culture will fit. And the last interview's with me, with just us.
Rick Girard: Okay. Very good. And so, the important thing here is you have a process and a structure in place, and most companies don't. Right?
Ville Houttu: Right.
Rick Girard: So all right. Transferring that ... so how do you screen for skills? You have this discussion. Most companies hire based on skills. You're hiring for culture first, skills second. So, how does that look, or what does that look?
Ville Houttu: Yeah. I think what I've seen here, there's a fundamental difference, small, but important difference, which is we never hire for a project need.
Ville Houttu: But we always hire when we find a good person to fit in the culture.
Rick Girard: Boom.
Ville Houttu: So, that's like ... it's been kind of hard for some of the people in hiring positions to understand. So do you need people? No, but we still keep hiring, and we hire all the good people.
Rick Girard: Yeah. So, what you're doing is you're being proactive in keeping your pipeline flowing, and as you find good people, you hire them.
Ville Houttu: Exactly. That's the way -
Rick Girard: That's a great way to build a company.
Ville Houttu: It is. And it's the only way to build a service company. An agency, so that's the only way we grow.
Rick Girard: And you know, and I think a lot of ... it's funny. I was just having a conversation with an entrepreneur this morning, who was saying, "Well, you know, I'm not sure if I have the budget, or the project for it." And so, you guys just kind of go for it, and-
Ville Houttu: Yeah. That's one of the things we don't do, is budgeting. So, we don't have budgets.
Ville Houttu: So then, you can't really hide behind the budget, because it's just an excuse.
Ville Houttu: You need to come up with better reasons not to hire or to hire.
Rick Girard: Yeah. And it's funny because I find a lot of people kind of come up with the reasons, especially entrepreneurs, why they shouldn't hire as opposed to why they should.
Ville Houttu: Yeah. It is. When the business reasons drive your decisions, you're going a little bit south. So, for example, instead of focusing on growth or revenue, you should focus on the things that make the growth possible, and in our case, it's people.
Rick Girard: Focus on the things that make the growth possible.
Ville Houttu: Yeah. For example, our KPIs, the things we measure, are employee satisfaction survey results, and client satisfaction results and it means growth for us.
Ville Houttu: So instead of the profitability or revenue, we focus on the things that actually make these two possible.
Rick Girard: You focus on value, or finding value.
Ville Houttu: Yeah. Or growth enablers.
Rick Girard: Yeah. Yeah. Okay. That's fantastic. So, I think you had mentioned earlier too collaboration, right? So, how big is collaboration in your company culture? What's the impact of that?
Ville Houttu: A little bit of what we do, so we build mobile applications and web systems.
Ville Houttu: And we work in teams which are all the way 2 to 10 people a team, but it's always collaboration.
Rick Girard: Depending on the size of the project.
Ville Houttu: Yeah.
Rick Girard: So, that's why if you're asking about the hiring process or the interview process, that's why we want to have a team situation where we also look at the way the problems get solved, or they don't. So sometimes, the problems don't get solved, but it can be a good thing.
Rick Girard: So, we know how the person reacts, how quickly he and what kind of questions he's able to ask, and willing to ask. so sort of raising a hand that I can do it. And that's a good thing.
Rick Girard: Yeah. You know what? And I would imagine you have to get that person really comfortable in the conversation so they can feel safe about asking those questions, because a lot of people don't want to look dumb in an interview process, especially technical people, right? So, they want to look like they're smart, so they'll try to solve it without asking the questions sometimes.
Rick Girard: How do you get past that?
Ville Houttu: Yeah. Having the human interaction all the way from our our job ads. If you look at them, you'll see the employees, the developer, telling about their day-to-day and if you're trying to reflect, give a good idea of how the day-to-day is, and if you have questions, you can contact this person directly, instead of contacting a hiring manager.
Rick Girard: Oh, so you opened up the transparency for new employees too, your potential new employees.
Rick Girard: Hey, reach out to so and so, and ask him about what it's like to work at our company.
Ville Houttu: Yeah. All the way from the job ad, so you can ask questions. And when you come in to the interview, you'll meet this person who was posting and looking for a new colleague.
Rick Girard: That is super cool. I love the fact that you guys are just doing everything opposite of what everybody else does.
Ville Houttu: Is it?
Rick Girard: Kind of, yeah.
Rick Girard: You'd be surprised. A lot of companies here are very you have to go through these channels in order to get there, and jump through these hoops, and it's almost a very difficult situation to try and get hired in a lot of companies here.
Rick Girard: Yeah. So, what have the results been so far since you've been here?
Ville Houttu: Yeah. I think the results ... so, of course-
Rick Girard: Whatever you can share.
Ville Houttu: Yeah. I can share almost everything, but it's like we only have two years of operation, so in California, but we really don't have attrition at all.
Rick Girard: That's what I was going to ask you.
Ville Houttu: Yeah. It's record low, but I guess what we can say already at this point, the engagement is there. Self management. The team, in a way, works towards the same goals we have to have happier clients and happier employees tomorrow than we have today.
Ville Houttu: So, that's the goal, and it's easy enough for all of us to understand. And they make big decisions.
Ville Houttu: Like how I see it, the lower level in the organization, big decisions are made, the better we have succeeded, if that makes sense.
Rick Girard: So you're not having to make the decision on everything. You just empower your people to make it.
Ville Houttu: Yeah.
Rick Girard: And they do as a collaborative effort.
Ville Houttu: Yeah. As a manager, it does feel like almost things happen automatically.
Ville Houttu: So when people take responsibility and make decisions, and things just happen.
Rick Girard: Are you surprised by it sometimes?
Ville Houttu: I'm surprised. I'm surprised over here how well the whole community welcomed us to Orange County, which is because I started the company in the Bay Area first.
Rick Girard: Oh, did you really?
Ville Houttu: And I moved it down to Orange County after six months, and-
Rick Girard: That was probably a wise idea. I do a lot of recruiting in the Bay Area, and it's brutal up there.
Ville Houttu: It's brutal up there.
Ville Houttu: But of course, like what people told me is okay, you have well-established companies, but it's hard to get into the Orange County. But, I'm surprised how welcoming the companies, clients, and the developer community has given us, so it's a positive surprise.
Rick Girard: Well, I think when you do great work, then you get recognized for it, right?
Ville Houttu: Hopefully, yeah.
Rick Girard: Yeah. So, wow. That's awesome. Hey, I want to salute you for what you're doing. Awesome job. I hope that other entrepreneurs that are listening right now can learn from this, and actually implement some of these into their company, because I think it's the way in which companies need to grow.
Ville Houttu: I appreciate it.
Rick Girard: So, we're just about out of time for today's show. Ville, thank you so much for being here today, and welcome to the Hire Power Radio.
Ville Houttu: Thank you. My pleasure.
Rick Girard: Yeah. So now, I'm sure that there's going to be some people that are going to be interested in working for you. How do they reach you?
Ville Houttu: I think the easiest way is to go to our website. That's vincit.com. V-I-N-C-I-T.com.
Ville Houttu: And you'll find the job section if they're browsing through the other content.
Rick Girard: Okay. And then, you want to give a little plug on what your company does? Just so people can ... if somebody wants to hire you guys, give them a better outline of that.
Ville Houttu: Of course. Like in the beginning, you mentioned so we build mobile applications and web systems for companies like Yamaha, Logitech, and a few others.
Rick Girard: Can a smaller company use your service?
Ville Houttu: Yes. We have a lot of start-ups local, also from the Bay Area. But, I think the key is we work locally. And like to work with the clients.
Rick Girard: And you should go to their website and check out their new office, because it's super cool.
Ville Houttu: Yeah, we like it.
Rick Girard: So, I want to thank our listening audience for tuning in to today's episode of Higher Power. Quick thanks to our team, our engineer Paul Roberts, our producers Andrea Balin, Ashanti Rial, and Kim Iverson. To listen to this show, and any past episodes, you can check us out on hire. That's H-I-R-E. Powerradio.com. Or follow us on iTunes at Hire Power Radio. You can also check us out on LinkedIn, Facebook, at Hire Power Radio Show, or you can follow me on Twitter at Rick_Girard. So, we have another great show for you guys lined up next week. Our guest is going to be the illustrious Rick Franzy, Founder and CEO of the Critical Mass for Business Podcast, and radio show here on OC Talk Radio as well.
Rick Girard: I'm your host, Rick Girard, and you have been listening to Hire Power Radio Show. Aloha.
Audio Recording: Thank you for listening to Hire Power with Rick Girard on OC Talk Radio.