Intentional Culture and Continuous Compensation: An Interview with Austin Vance

Transcript

Shane Hastie: Good day folks. This is Shane Hastie for the InfoQ Engineering Culture Podcast. Today, I'm sitting down with Austin Vance. Austin is the CEO of a company called Focused Labs. Austin, welcome. Thanks for taking time to talk to us today.

Austin Vance: Yes, thanks for having me, Shane. I'm really excited to be here.

Introductions [00:49]

Shane Hastie: So we normally don't talk to CEO folks on The InfoQ Podcast because we want to talk to technologists, but I'm told you are deeply a technologist. So whose Austin?

Austin Vance: Yes, well I hope I'm still a technologist. I spend a ton of my time programming still. My firm is not massive and I kind of think the title of CEO is wonderful for a business card, but also probably CEO level decisions are not a big part of a midsize firm. We're not making large strategic decisions all the time. Instead, a large part of my job is setting a bar for engineering interests and engineering consideration and excellence.

And so at one point I had gotten so far from programming, I got frustrated and I decided to live stream myself programming, started doing that about seven or eight months ago, and now I have 20,000 subscribers on YouTube where I livestream myself coding, and I grew up coding and talking through the code I'm writing so a lot of just random stuff. I'm like, "I want to experiment with this API or this new technology or do a RAG", or something like that. So I try to code as much as I can, but also have a nice firm.

Shane Hastie: So one of the things that put us together was a conversation about developer onboarding. Why is it so hard and how can we do it better?

Challenges and opportunities in developer onboarding [02:09]

Austin Vance: A good question. I don't know if it's hard, might be my first reaction to that question. I think it requires intentionality and a lot of times I think when we bring people into a culture or a company, we are not intentional about how we want them to assimilate. And what happens is a company or group or a team assumes through some form of tribalism, series of notion docs or a wiki that someone will be able to figure out what's going on and then the missing portions will be hit or will be covered through managerial one-on-ones. But the truth is a culture at any company, no matter the size, is the sum of all of the people that are at the company and have been at the company.

And so as soon as a new person joins, the culture shifts a little bit and it requires intentionality to drive however that person shifts the culture back towards what you want the culture to be as a leader or as someone there. And so sitting down and really understanding, first defining what you want your culture to be and what you want... And culture' so many things we could talk about that, but what you want your culture to be and then how you can communicate that to a person so they can be the most proficient and effective is really like that's it. It's really not that hard, it just requires concentration or intentionality and sometimes we just get too caught up in the day-to-day that we aren't intentional about bringing that person in.

Shane Hastie: So what does this intentionality look like and what is the experience of being part of that in intentional onboarding?

Intentionality in the onboarding experience [03:34]

Austin Vance: I've worked at a handful of places and I think the best I've ever experienced, hopefully besides my firm, but the best I've ever experienced was at Braintree. I ran a division of engineering at Braintree and I had a great time. I came in, I was the first of a new layer of management and they put me through the same onboarding as all the developers. So developers had some that was theirs where you talked about how do we do CI and what's our testing culture and how do you do a pull request and feedback on that. So there was that kind of stuff. But then there's also a bunch of onboarding about what it means to be at Braintree.

And one of the things I really loved about that is over the course of the first, if I remember correctly, it was about a month, you spent about an hour to an hour and a half, a couple times a week with a different person who'd been at the company, and they didn't always have a big title, but a different person had been at the company for a little while talking to you about something that they loved or cared about deeply at the company.

And for engineering, like I said, it was some of the technical norms that you would expect out of the communication between teams. But then it was also what is meeting culture like, how do we communicate with each other? And then also just like what's the history of the company? Who are we? What do we want to be? And I thought that level of intentionality and that level of time where it was different people, different opinions, all kind of speaking towards one mission and one kind of personality, which was the personality of the organization, really made you feel like you were a part of something early, early on.

And, I mean, of course I got great swag when I started and other stuff like all companies do, but I don't think that swag made me feel as part of a new culture as onboarding did. We've copied that a lot. And so we over the course of a few weeks go through a handful of presentations, decks and conversations ending with a retrospective with all of our new hires on what we expect out of them, who we are, what our values are, what our operating principles are, what it means to be a developer or a salesperson or a marketer or anything like that at Focused.

Shane Hastie: You made the point that culture is the sum of everyone who is or ever has been in the organization and that you need to deliberately shift it to where you want it to go. What does that intentional culture again look like and feel like? What's the experience of being in that culture?

Intentional culture design [05:57]

Austin Vance: I mean, the most human answer is when you're at a place where culture is intentional, it feels good, right? It does. It just feels like things work. When you come into a place where culture doesn't feel intentional, it can feel chaotic, it can feel misguided. When culture is intentional, what you see is you see common traits between all of your colleagues, coworkers, professionals around you. And it's the work ethic, it's the ethos that is the company. It's not that you all have the same background or you all went to Harvard or you all have an MBA. That stuff doesn't matter as much. It's like you all approach work with the same level of rigor, the same level of thought, care, and even more so maybe the company takes the same level of care to how each other approach each other's work.

It doesn't mean that there's a good culture or a bad culture. Some places might be super cutthroat, action oriented, top dog wins, eat what you kill, and that can be okay if that's what the company wants. And if someone comes in there and they enjoy that culture, they will feel like they belong because it's obvious what that is to them. And other cultures could be more like team oriented, collaborative, when we win, I win kind of thing, and when I win, we win. And other people might love that, but a person who's a top tier non-collaborative performer might feel really ostracized or feel like they're not getting the recognition they deserve. And they would maybe select out if the culture's intentionally towards more collaborative or more the other way, a more winner takes all kind of culture or something like that.

Shane Hastie: So what is the culture that you've tried to instill at Focused Labs and how have you communicated that culture?

Communicating culture [07:31]

Austin Vance: It's always evolving. Like I said, it's a sum of all at the company and all that have been. And part of that is the people that come and go really shift the culture too. I never really liked values as a thing that companies had. I've worked for companies that had values and they essentially were Wi-Fi passwords, so why do we have them? Excellence or something like that. And people are probably really familiar in this podcast with the Netflix culture deck, Netflix has this great culture deck and it starts with values are not something you just put on a wall, they are the litmus test for who you hire, who you fire and who you promote. And that really hit me in a real way. And so really early in the days at Focused, I sat down with my team of, I think at the time we were five or six people and I was like, "Who are we? And then who do we want to be?"

So values can be slightly aspirational, but they can't be so aspirational that they're not true. And we landed on three and so our three values ended up being love your craft, listen first and learn why. A lot of times you see companies with values that are like one word, it'll be like excellence, integrity, that kind of stuff. And we picked those three because we thought they were a little bit more action oriented. When I see love your craft, I want to work with people that love what they do. And in tech that's so easy or maybe not so easy, but in tech we see it a lot. I'm very familiar. I came the Ruby community and I'm really familiar with the software as a craft kind of thing, but I want my recruiters to treat talent acquisition like a craft.

I want where they're honing how and where and why and what they're doing to find the best talent. And I want my sales teams to treat customer acquisition like a craft where they understand messaging and communication and empathy with all their customers and my support teams to treat support like a craft. And I want my design teams to treat design like a craft. Just every practice at my company should be treated like a craft from the top down. The leader should be a master craftsman where everybody else is learning from them. And the lesson first falls out of that where in order to hone your craft, you have to be open to learning.

And it's funny, I'm on a podcast where I spend most of the time talking and not you, but my firm were consultants and I have a story actually from Braintree, it might be one of the more embarrassing professional experiences in my life where I sat down in a room really early at Braintree and I had a large organization and a big title. And I sat down in a room full of principal engineers at Braintree and I was on cloud nine because I was a big boy on the organizational chart and they were pitching moving Braintree's APIs from REST to GraphQL for some specific things, and it was pretty early in the GraphQL days.

And I kind of was like, "Well, that's stupid, GraphQL's never going anywhere. No one even knows what it is". And I kind of talked my way into sounding like an asshole. And I left the meeting and one of the principal engineers pulled me aside and told me that I talked my way into sounding like an asshole. And over the course of the next few weeks he was like, "I actually think that GraphQL's probably the right choice. You should spend some more time learning about. It's your first meeting, ever hearing about it. Maybe you should spend some more time figuring out what's going on here".

And over the course of the next few weeks, understanding how people use the Braintree APIs, understanding what was going on, understanding more depth around GraphQL, I came to believe that GraphQL is the right decision too. And I wish I had listened first. And so not that we can't have opinions and shouldn't, but I think one of the important decisions that we make as individuals when we communicate on teams is like, when do we listen and when do we share our opinion? And then finally learn why is at the very end of all that is this deep and entrenched curiosity and how and who we are.

And so coming back to your question, I think the most important thing about honing a culture is really knowing what you want it to be and then being able to really clearly articulate how someone embodies those traits and then constantly repeating that, that is the most important thing. And I really do believe that if you can articulate, repeat, and share that, performance follows really quickly, actually, like the results just speak for themselves.

Shane Hastie: No, I know from our conversation before we started recording that these values are one side of it. You also then have something else that makes it more concrete.

From values to operating principles [11:52]

Austin Vance: Yes. So values, they're still a little high level I guess. And so what we wanted to do, and this is specifically for our engineering teams, but we've defined a series of operating principles and these operating principles, I kind of think of them like you have the Boy Scout motto and then the things that make a Boy Scout, a Boy Scout like thrifty, kind, clean, reverent, those types of things. And our operating principles are kind of like the things, I forget what part of the Boy Scouts it is, but they're like the things that make a Boy Scout, a Boy scout. And so we try to define a little bit more clearly what it means outside of a value, so a personality trait or what you should be doing.

And so one of my favorite values that we have is be exothermic. And so since we're an engineering world, I get so much feedback on this operating principle because everybody's like, "What is exothermic?" But since we have a lot of nerds on this podcast, I think most people know what it means. But it means when given energy, you create more heat than you have or you're putting out heat. And in a professional world, what I think that means is bring energy to the situation.

In Wedding Crashers, they say fit in by standing out. And so the way you come into a meeting is not by being quiet in the corner but come with a passion and energy and a charisma that makes other people want to care as much as you do. And that becomes infectious. And so we have these series of operating principles that are guiding principles on how everybody can interact with their customers and each other, and that's really important.

Shane Hastie: I know that you also have some pretty unusual approaches to compensation. Can we dig into that?

Continuous compensation management [13:26]

Austin Vance: Yes, I absolutely despise the way traditional compensation is managed. The majority of my career, before I started my own firm, I worked at big companies, big, big companies or small companies that were acquired eventually by big, big companies. And so we dealt with compensation in a really traditional way. And if people aren't familiar, the way compensation is traditionally managed is some sort of raised budget is designed for departments and the whole company.

And that gets kind of passed down through tiers of upper and middle management, distributed in some kind of finger in the wind sort of way based on performance investment and being reasonable based on a 2% raise generally for the mass set. And then on the other side of that, a manager and peers do reviews of each other and they do some form of meets expectations, exceeds expectations or falling behind. And then this manager has a raised budget and they get to dole that out to say they're 10 or so direct reports based on meeting expectations or not, and it happens once a year. That's the last thing. Happens once a year.

And I've always found that to just be a absolutely horrible way to manage performance. I have spent so much time in my life sitting in rooms with leaders at enterprises convincing them that they de-risk their software by releasing often nightly, daily, weekly if you want to de-risk the release of software, which means that if there's any failure, you can fix it quickly or we can manage it quickly the same should be true for our people, by releasing often. And a big way we release often or a company releases with its people is by rewarding the people that are being excellent and managing the people that are not proactively. And the easiest way to do that is through not or by giving or not giving raises to people. If I find out only every 12 months, whether or not I'm doing well or not, it's probably a pretty bad way to live and bad way for the company to handle reward and promoting.

So the way we do it, we run a raise cycle every 6 to 12 weeks for every single person in the company. So we have managers collect feedback constantly through one-on-ones. We have peers, we do daily pair review, feedback sessions, that kind of stuff. We have well-defined job description and growth pathways as you move from senior to staff engineer or junior to normal engineer or whatever. And every 6 to 12 weeks we say, "Where's this person fit?" And we think they've gotten really good, they took a leadership position over these set of features with this customer, they're actually performing now at this level, and we give a small raise.

And that raise doesn't have to be thousands and thousands of dollars, instead it could be a few hundred or a thousand dollars or something like that. But if you get that every six weeks, it compounds throughout the year as a good job, a good job, a good job, you're on the right track, you're on the right track, and you watch over the course of the year, your compensation increases dramatically, but you've also continued to get pushed in the right direction, "Here's what you're doing well".

Also allows us to correct really quickly for anyone who's not performing, "Hey, we're not going to give you a raise this time because we were really seeing you disengage. You've been showing up late a lot, it's been really hard for you. You've been cameras off and not talking to the customer. You had a feature that you were stuck on for a few weeks and you didn't communicate that". Whatever it is, let's get that fixed and in six weeks they fix it and they come back, they get a raise, right?

Compensation follows so you can actually correct behavior more proactively and bring employees back who might be lost versus I'm kind of sitting in this negative cycle for at most 12 months and then being lost. There's a really positive way to manage people is through compensation and all the conversations that surround that compensation change. And so that's how we do it. We continue to hone it. We tried to do it every four weeks. That was way too much overhead. We've found somewhere between 6 and 12 is right.

Shane Hastie: Completely different to I'm sure most organizations and potentially disruptive. I wonder you've made the point Focused is a relatively small company at the moment. How do you think that's going to scale?

Can this approach to compensation scale? [17:41]

Austin Vance: I think it scales phenomenally. And the reason I think it scales phenomenally, and I get this feedback a lot, but the reason I think it scales phenomenally is management at scale is the formulation of abstraction layers over complex people systems, right? The same way we create an interface to talk between services, we create interfaces, which are managers, to talk between teams doing individual and important things. And if through culture, training, onboarding, onboarding of managers, everybody understands the value of the lean compensation model or continuous compensation model, then at each level the managers really understand what's going on and it scales horizontally fairly simply.

The harder part about it and what has been interesting through the tech cycle recently is we anchor the midpoint compensation for each of our titles in the market average, well the 60th percentile or 65th percentile of the market. And so over the course of my career, the 65th percentile of the market has only gone up until about three years ago. And so watching how the mean compensation for a staff engineer has changed was always like, well, you could stay staff engineer and your comp could continue to go for the last 15 years, but then the last three, maybe it plateaued or maybe even a staff engineer off the street would make a little less than someone who was hired five years ago.

And so managing those conversations and understanding that has been a really interesting and really difficult part of the lean compensation, but it's actually done really well because helped us proactively talk about whether or not the talent that we have has stagnated or is growing. And then the people who maybe are sitting at the same level they had been for a few years, how can we push them to grow more or is that the right talent for the firm?

Shane Hastie: Another thing that I know you have opinions on is the role of management. What is the role of a manager in a tech organization?

The role of the manager [19:41]

Austin Vance: Well, hanging off of compensation, I think a lot of places I see management fit into two buckets. One is very paternal style management where you do a lot of like how are you feeling at work kind of thing and then there's other places that do a lot of performance style management. Are you hitting your numbers and your metrics? I think management can be both. But I see often organizations lean one way or the other. The first thing I'd say is at Focused and me in general, I believe that management, in order to be an effective manager, you must control the compensation of your direct reports. It is the primary means in which you communicate performance to them.

You cannot be a good manager or you cannot be an effective manager saying, "You're crushing it. I'm so happy, you're doing so well, you've grown so much, but I'm only able to give you a one and a half percent raise this year". Because if that's the case, all of a sudden what you've done is the manager is no longer representative of the firm. They're just a friend of the person and they created a common enemy, which is the company.

And so to me, what management is, is the person who is most responsible or solely responsible for creating predictable attrition inside of their team. And so what I mean by that is their job is to retain the best talent and understand why they are being retained and to exit their poor-performing talent proactively and understand why they are being exited. A poor-performing manager is someone who has people leave their teams and their groups without being able to predict it and or does not remove people from the team who are not high performers. And so that is it. That is a manager's sole distilled job, but all this stuff falls out of that.

So people are like, "Well wait, so my only job is to fire and give raises to people?" No, no, no, no, no. Your job is to retain the best talent because of the right reasons and exit the correct talent for the right reasons and know when that's happening. And so how do you do that? Well, your best talent needs new challenges. They need new opportunities. They need growth. They need compensation. They need more leadership. They need maybe a new tech stack. Your most high potential talent needs coaching. It needs one-on-ones. They need mentorship.

Your bottom-performing talent needs direct feedback, needs, needs active management, need performance improvement plans. Like all of the stuff that managers do centers and boils down to I want to keep or exit to the right people at the right time. And so that's how we train our managers. But all of the tools that we learn about in the manager tools, books and podcasts and all that stuff, those are all for that and we should be using all of those tools to do that. That's my take on management at the end of the day.

Shane Hastie: I suspect that there's not many management training classes that teach you about that.

Austin Vance: I think they hide from it. They don't, and I think they hide from it and we take it head-on in our first management training materials. We say that and we say it's not heartless. I was sitting around at dinner yesterday talking about this, and people are like, "When I finally have made the decision to let someone go", the whole team is like, "Wow, why'd it take you so long?" And managers often are the last to make that decision because they don't have the proactive conversations with each other about how to curate and cultivate the appropriate talent. And no, I don't think they approach it directly.

Firing is one part of it, but firing is a very dramatic and last resort answer to a lot of other failed things. An interview failed, coaching failed, one-on-ones failed, performance improvement failed. But those things had to be tried and eventually it's kind to allow someone to go someplace else or makes it so so they can go someplace they can be successful because normally they're not because the culture's not right, not because they're bad.

Shane Hastie: Austin, a lot of deep and interesting thoughts there. If people want to continue the conversation, where can they find you?

Austin Vance: I am pretty active on social, so you can find me, Austin BV on LinkedIn, X, all over the place, but any social with that handle is me. So reach out, please. I'd love to talk to you.

Shane Hastie: Thank you so much for taking the time to talk to us today.

Austin Vance: It was an absolute pleasure. Thanks for letting me ramble.

Mentioned:

• Austin Vance’s YouTube Channel
• Austin Vance on LinkedIn
• Netflix culture deck
• Scout Motto