How Culture Retains Employees

According to Megan, a compelling culture, the right investment in the people, whilst giving them scope to excel in various departments and roles can really impact growth. Megan believes it is important to say yes to all kinds of opportunities irrespective of whether you know if you will be able to succeed, if you're smart and hard-working, the rest will fall together.

Tune in to this episode and learn:

• The importance of culture in growing a company
• How to be self-reliant and committed to supporting others and yourself
• The importance of an open, collaborative working environment
• How to ensure your core values that resonate with each new hire you make
• Importance of growing people and their careers through development programs
• The importance of giving employees different experiences to keep them challenged and engaged

. . .

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• Megan’s LinkedIn
• Kinaxis
• Culture Deck

‍Cassy: All right. Hello, Megan, and welcome to the Hoppier podcast where we talked to leading culture builders from around the world. Why don't you start by telling our listeners a little bit about yourself?

Megan: Sure. Thanks, Cassy. Thanks for having me. I've been working in HR for about 22 years now, and culture has just been something that's really important to me. Obviously, it's important to HR, but for me, in my experience, it really sets the tone of a company. I think it's so tied to that company’s success that it's something that you've got to do right. When I heard about your project, I was super excited to be part of it and have a chance to talk to you.

Cassy: You've been the Chief HR Officer at Kinaxis for about 12 years now. How did you get into leading people, and tell us about your journey?

Megan: It's a great question. I don't think I ever set out to lead people, actually, it wasn't a goal of mine. I've asked this question in the past, I think back, and I think about being a kid. I think about being in school and doing school projects. I like to get stuff done. I like to make decisions and for whatever reason, people followed me. I just fell into leadership a little bit. It wasn't something I intended to do, but I didn't set out to lead people. It’s been a really, really great journey.

I've worked for companies that are startups, lots of startups that worked for publicly traded companies, and I think a big part of that leadership is just having the faith in yourself that you can do it, even if you don't know that you can. A lot of times in my career, I was offered to do different roles, different jobs, and I had no idea if I could actually do them or not. I think if you're resourceful and you're hardworking, you're reasonably smart, you can figure most things out. When I look back on my career, I think the reason I've ended up where I am is because I never said no. I just would give it a try and you figure it out as you go.

Cassy: What drove you to have that open mind to take on anything?

Megan: I think for me, personally, I think part of it is the way that I grew up. I grew up in a big family and we never had enough. We never had enough money. We never had enough electricity. We never had enough food. We never had enough groceries. For me, I knew early on, I was going to do everything I could in my power to make sure that I never ended up in the same situation, that I never had to rely on others, that I could make my own way, and I could support myself and support others if I needed to.

I think that drove me to having an open mind and not being afraid to try new things because I think the way that I grew up, it was like a bubble and this is all I knew and I wanted to be different. I wanted my outcome to be different and I knew the way to do that was to say yes to things that I had no idea about. I think I've been lucky. I've been fortunate, sometimes, I've been in the right place at the right time, but I think it's that drive and not having fear to just try something that you're just not sure about.

Cassy: Interesting. 12 years later now, how do you describe your journey at Kinaxis?

Megan: When I first started at Kinaxis, we were about 120 employees. We're maybe on four countries and most of our employees were in Ottawa, Canada. It was a very small and very different company, and we're also privately held at the time. Kinaxis has been around since 1984. Frankly, for a very long time, it was a pretty small company. It was successful, but I would say mildly successful, just going along and growing a little bit, but not too much. We compete with some of the biggest companies in the world. We compete with SAP, Oracle, Infor and JTA.

We are this tiny company in Canada and we had all these amazing customers. I just knew we could be so much bigger and so much better. In 2014, we had two things that really change for us at Kinaxis. One of them was we went public. We went public on the TSX and all of a sudden, all of our financials were public. That helped us compete against these big giants. The other thing that happened was we showed up in the Gartner's Magic Quadrant in the leadership category. We were on an island as the true leader and everybody else was below us.

Those two things happen in the same year within a few months to each other. When I look back, that's the change in Kinaxis and that's so changed our growth. We're just over 1,000 employees, were in 21 countries, we're publicly traded. We've acquired two companies, and it's just been a ride. It's been amazing. The thing that I love the most is that when I started at Kinaxis at 120, our culture was really awesome and even now in 1,000, that same culture still exists. That's why I've stayed there 12 years. I usually get bored so quickly and I've never worked anywhere more than two or three years. Kinaxis being 12 years is different for me and a big part of that has been the culture.

Cassy: That's amazing. How would you describe the culture?

Megan: Really, I think our overriding theme to our culture is that people matter at Kinaxis. I have a CEO who really gets the strategic value of HR which makes my life a lot easier. He genuinely cares about how we treat our employees and how we treat our people. Also, our overriding theme is people matter at Kinaxis. We have a set of six core values that we live by. We hire on these core values. These are values that we expect to have in every person that works at Kinaxis.

Now, with those values cascade into is three promises that we make our employees. One is that they'll have challenging work, two is that they'll work with great people, and three is that what you're working on will have a global impact. That's our employee value proposition, if you will, that we promised all of our employees that they'll get by working at Kinaxis. It's a very open environment, very collaborative, very helpful. You really feel like everybody's working towards the same goal, and that hasn't changed. When we were 120 people, it was like that and it's still like that now.

It wasn't by accident and it wasn't easy, and especially as you grow so quickly and you absorb new companies, you have to be really careful about it. You have to be intentional and deliberate, but I'm really pleased that we've been able to do that.

Cassy: I think that's a pretty unique aspect of what you've been involved in compared to some of the other guests that we had on the show. From an acquisition's perspective, what are the actions that someone can take to ensure that you don't have a culture misalignment when you are acquiring a company?

Megan: That's a great question, Cassy, because if you look at the stats, I think it's something like 78% of acquisitions fail. They don't recognize the value of that acquisition and in my experience, the biggest risk factor is that culture. You have to remember, when you're acquiring a company, those people didn't interview with your company. In our kit, if you're buying a startup, this is an example and you’re not a startup, they interviewed with that startup and there's something about working for a startup that a lot of people love.

They probably don't love that they might miss payroll or they don't know if there's going to be layoffs, so there're good things that the acquiring company can offer. You've got to communicate what those perks are, what the benefits are, the stability that I think a lot of people are looking for, especially if their company was in a distressed state. You really have to make sure, through your due diligence process, that the cultural alignment is there. You're never going to find a company that's 100% the same culture as you would doesn't exist. You've got to make sure, in my opinion, that the core values are similar because if they're not, you're never going to keep those people.

You're going to acquire this great company full of great talent and they're going to realize quickly that what this big company they joined is just not what they signed up for. To me, it's really through the due diligence. You have to be so careful and you really have to get to know the company and culture, talk to different people, and make sure what's being presented to you is actually what is. That's the hard part because in acquisitions, it's a very small group of people in the beginning that's involved in case it goes sideways.

You're relying on others to see, is the culture what they're saying the culture is?

Cassy: Is there anything that you do actively to ensure that you continue to build on that culture that you have at Kinaxis that's maybe unique?

Megan: Yes. I think, like I said, it was intentional and it was deliberate. It wasn't by accident that we've been able to keep this culture. One of the things that we did last year was we actually hired a company to help us define our culture and help us articulate our culture, and also help us recognize what's some aspirational parts of our culture that we need to have for us to get to a billion-dollar company because there are a lot of great things that were part of our culture when we were 120 that we can do even now at 1,000. It was a really great exercise for us.

Some of the things that we always do, I mentioned those six core values. My recruiting team knows what those values are and they hire to those values as best they can. Then once people are hired, our rewards and recognition is all about our values, our promotional process. We look at our values. Sure, that person might be a great performer, but do they live our values? Well, if they don't, they're not going to be on our payroll for very long. We really, really hold them near and dear.

We'll invest in people and we'll train them, but core values is something like you have it or you don't. Are you somebody who's self-empowered? Are you somebody who believes that you're stronger together as a team, or are you somebody who believes that you're stronger as an individual? If you're stronger as an individual, you probably wouldn't love working at Kinaxis, and you should probably work somewhere else. I think we've made sure that our core values, they're almost like the fabric of all of our programs.

From the beginning of the candidate relationship through to retirement, we make sure these are woven in. I think that really helped us make sure that it's a culture that's living, breathing, evolving, and it's true. I think we've all worked for these companies where you walk past the wall and there's like, "Here's our core values," and they don't even resonate. What's on the wall does not equal the company that you live in every day. I think we've done a really good job of being open and honest about who we are and who we aren't, and making sure we promote that. It's sort of a constant.

Cassy: I think it's amazing that you think about the moment that a person joins Kinaxis to the moment they retire. I think most people think, "Oh, if I get two years out of this person, that's incredible." What are you doing to develop those people as they progress in their career?

Megan: It's a good point because we have long tenure. Our average length of tenure, I think, right now is about 6.8 years, which in tech is a lot. That's long. I know in other industries, that's nothing, but in tech, it really is a lot. My former companies I've worked for, you're lucky if you get two years of the people. We believe in growing careers and growing people, and we believe in investing them.

Now, we're really fortunate because financially, we've been successful. We're a SaaS company that has really strong revenue growth and really strong profitability, which is really hard to get. I fully recognize we're in a great position financially so we can afford to invest in our people. We've got a great training and development program. We've got career paths and ladders, and we help people figure out where they're at and what they need, where their gaps. How can we help them get from level one to level three, or whatever it is.

We just believe in investing in our people, we've seen it. It's a software company and the cliché, biggest asset is your people. It's all in their heads. We hire really smart people and that's what makes our products so great, that's what makes our marketing so great, that's what makes our HR so great. If you're going to hire really smart people and not invest in them, just don't hire smart people. You're wasting your money, right? They're going to go somewhere else.

We've just recognized that you've got to invest in the people, and also recognizing that growth isn't always upwards, right? It can be lateral, it can be expanding scope, or taking on different teams or different projects, stretch projects, and it's not always going to be lateral. I think we've done a good job in doing that. That's part of the reason that people stay so long at Kinaxis. You've got a great culture and then you've got a company that's going to invest in you, and you're working on really tough projects and it's challenging with great people.

I don't know. I'm very fortunate. I love working at Kinaxis. It's not perfect, there's lots of things that we need to do better and differently, but from a culture standpoint and from a people standpoint, I think we've done a really great job.

Cassy: I think the tenure, that's incredible. Six plus years out if someone is-- That's unheard of in tech. I'm curious, that's a great lagging metric, but to wait six years to understand if you're having improvement in that metric, are there any other ways that you're monitoring or tracking whether there is success among some of those programs and ways that you continuously improve people within your organization and support them?

Megan: Yes. I don't know that we fully figured that out, to be honest, Cassy, but one of the things that we do track is something called positive internal mobility. Basically, that is, what percentage of our employees are either getting promoted every year and or getting transferred, so transferred to a different department, to a different role. It's not just a change in title. It's a true different job that they're doing.

Our goal is 15% of our employees, that's the goal that we shoot for. It's only this year, we actually started measuring it and right now, we're on track for that which is great because you've got to give people different experiences to keep them engaged and to keep them learning. That's one way that I'd say we use metrics to track that. I guess another way, although it would be-- It's kind of at arm's length, it's not a direct metric, would be your engagement scores and then also, of course, your retention. What does your retention look like?

We're running really well. Our attrition rate is generally voluntary and involuntary, 10% around there. I think for our industry, it's around 15%. That also tells me that if people aren't leaving-- Again, it's indirect, but if they're not leaving, then they feel that we're investing in their career, it's growing, and making an impact.

Cassy: Amazing. It'll be interesting to see that metric in one-year time and to see how it progresses. I'm sure with that legging, that metric being so strong, it's going to be just as strong or even stronger. I guess you've seen a direct benefit linked to employee growth at Kinaxis, and I'm sure you are a perfect example of that as someone who has become one of the most senior leaders in the organization.

Megan: No, I agree. I didn't start out as their CHRO, what was my title when I started? I don't even remember. Maybe it was director of HR or senior HR. Man, I can't remember. I was head of HR, but it's very different. I was reporting into the CFO who's a great guy, but HR, in my opinion, if it's going to be strategic, should not be under finance. I had one person on my team, there were two of us in HR, so I did everything. I think now on my team, I've got 27 HR people in four different countries.

I do a lot of work with our board of directors, with our compensation committee, a little bit with our nomination and governance Committee and a little bit with audit, but mostly, compensation. Mainly, I work with our executive team because I've got other people on my team that are managing the HR programs, that are managing recruitment, and that are managing the other business units.

Even though I started as the head of HR and I'm still the head of HR, the scope that I do is so different, and the impact. The job is night and day. It's really cheap. I think you're right. I guess I'm a good example of certain progression and how we do that at Kinaxis.

Cassy: Any advice that you can give other HR leaders that are looking to grow with the company? A lot of people think about, okay, you have a founder that grew with the company and they remained as the CEO from when it was just one person to a thousand plus employees. You continue to grow in your career from about 100 employees to a thousand plus through an IPO, through a pandemic and also, through the beginning of the financial crisis in 2008. Any advice you can give to young HR leaders that are starting their careers and looking to grow with the company?

Megan: It probably goes back to what I said at the beginning. Just don't be afraid and don't say no to things. You've got to know your limits. Obviously, if somebody said, "Hey, Megan, can you operate on this person?" I would say, "No, I cannot operate on somebody." You won't know if you can do it until you try it. The first time I became an HR manager, I was just an HR advisor working for a great person, but she didn't get along with the CEO. The CEO fired her and gave me her job.

Suddenly, I've got three years experience, I'm the HR manager for a startup of 74 employees. I've no idea what I'm doing, but you just figure it out. I knew my limitations and I networked and I lean on others who I respected. I think don't say no. Then the other thing is get some mentors. I think they're so important, you can learn so much. People in general, I think people are really happy and excited to share their experience and their lessons learned.

If you get some mentors, I think that also really can help you. I know for me and my career, it's been super important. I think it's important to be a mentor, but also to get a mentor. I think both of those things are really important. That would be my big advice. Then I think the other piece of advice, when you start leading a team, that's always a little bit hard because you're used to doing everything.

Just recognize that if somebody does it differently than you would do it, it doesn't mean it's wrong. I know for me, that took me a few years to really let go and figure that out. Just because they do it differently, it's okay, and maybe it's better than your way. Maybe it's a little bit worse, but as long as it's not bad, it's not wrong. When you become a new leader, that was a good lesson for me. I wish I'd figured that out sooner. You just have to recognize, they're not going to do it exactly the same as you and that's going to be okay.

Cassy: Great advice. We'll go ahead with the quickfire round now. Just first thing that comes to mind, I'm going to ask you five quick questions. Number one, what is your favorite culture-related resource?

Megan: People are going to say, "That's so old," and maybe I'm showing my age but honestly, my favorite, even today and I still love it is the Netflix Culture Deck. It's amazing. I love it. I had the opportunity to meet Patty McCord in person. I had lunch with her. I was doing this program at Stanford which was a great experience and she came to our class to talk. She wrote this Culture Deck.

She happened to talk to her class right before lunch. She stayed for lunch and I made sure I sat at their table. It's amazing. She's like an anti-HR person. Her golden rule is like, "Hire adults, treat them like adults. If they don't like it, act like adults, fire them." It's just like no bureaucracy, no bullshit. She was just like, "Think of the business. You're not here to make people feel happy, you're here to run a successful business. If you run a successful business, you invest in your people, they'll be happy. You don't need these rules and policies and guidelines. There's so much stuff in HR that's useless. It's so useless."

Her Culture Deck or the Netflix Culture Deck is my all-time favorite cultural resource, I would say.

Cassy: You might have answered my next question, but which people leader would you most like to take for lunch?

Megan: I would like to spend more time with Patty, but since I don't want to get greedy, if we'd really love to go out for lunch with, if there's one person, it would be Gerry Schwartz. He's the CEO of Onex. He's not necessarily known for his people leadership, but he's just such a great business person. He's Canadian and he's self-made. If I could have lunch with any business leader, it would be Gerry Schwartz, for sure.

Cassy: Single piece of advice you would give to a new people leader?

Megan: I'm going to reuse what I said. Just because your people are not doing it exactly like you would, let it go and just be okay with that. Just recognize that they're doing it differently, and it's totally okay for that to happen.

Cassy: Favorite team building activity?

Megan: This is going to sound a little bit weird, but I actually think that teams that eat together have this bond. It's not an activity, but I think spending time with your team outside of work where you can actually have a nice meal and talk about things that are about their person. Not about their work, but it's about their person. Because it's like when you're in the dark days, like you're going through a hard time, say your company is on the brink of bankruptcy or it's the pandemic, or who knows what's going to happen, you need to trust that person who's beside you. It's really hard to trust somebody if you don't know them.

The more you know about a person, the more you trust them. I've always found that my closest teams have been ones where we take the time to go out for lunch or go out for dinner, spend my time getting to know each other outside of work. That would be my favorite team building activity.

Cassy: What do you do when you're not leading people, Megan?

Megan: I play a lot of tennis. I like to drive fast cars. I really have that penchant for driving fast. I love reading. My Kindle is always in my purse, I'm always, always reading. I have a dog, her name is actually Cassidy, and I spend a ton of time with her too. I should meditate, I should go to the gym, but those are the things that I [inaudible 00:26:51] doing.

Cassy: Great. Is there a way that our listeners can follow you?

Megan: That's a good question. I'm on LinkedIn. I'm old, Cassy, I'm sorry, I'm really old. I'm on LinkedIn. I have a Twitter account that I use once in a while. I'm happy for anybody to connect to me, for sure. My contact info is on LinkedIn. If you want to reach out to me, I'm happy to connect with anybody.

Cassy: Great. All right. Thanks so much, Megan. Thanks for being on the Culture Builders podcast.

Megan: No problem. Thanks so much for having me. This is a lot of fun.