It’s easy to stereotype the San Francisco Bay Area as a playground for tech-savvy workers who believe that changing the world goes part and parcel with bringing their dogs to the office, taking meditation breaks, and nibbling artisanal cheese. But could there actually be something to the “Bay Area way” of working that fuels business success?
Justin Rosenstein is co-founder, with Dustin Moskovitz, of Asana, the Bay Area maker of work management software. The company doesn’t skimp on perks: it offers employees mindfulness training, yoga classes, and has an in-house culinary program with its own Instagram account and cult following.
See our 2018 list of the Best Companies to Work For in Bay Area.
More from FORTUNE
But according to Rosenstein, anyone who gets distracted by Asana’s media-friendly perks is missing the point. Per Bay Area tradition, Rosenstein firmly believes his company can change the world (like other Silicon Valley entrepreneurs before him). And he views an empowering workplace culture as a vital element of the company’s aggressive business strategy, which is all in support of the company’s mission: to “help humanity thrive by enabling all teams to work together effortlessly.”
“The bottom line is that we’re here to fulfill our mission,” says Rosenstein. “The way to achieve that mission as quickly as possible is through a fast-growing business. And the way to achieve that for the long run is providing a workplace where employees can thrive, not only by working hard, but by living well.”
Rosenstein’s approach is paying off. A recent $75 million-dollar investment in Asana led by Al Gore’s Generation Investment Management values the company at $900 million. So, what’s behind Asana’s success and what lessons can other companies learn?
Culture is not beer on Fridays
Anna Binder, Head of People Operations at Asana, says that “Culture is not beer on Fridays.”
Culture is the total of all the interactions and touch points in an organization. These range from the tone of mundane discussions, to negotiating decision-making agreements, to setting budgets and compensation.
The question becomes how to shape all the interactions and touch points to help you achieve your mission while staying aligned to your values. Leaders can let interactions develop without guiding principles and accept whatever culture unfolds organically. “Or,” says Binder, “leaders can consciously design their culture for greater agility and competitive advantage.”
Rosenstein notes that company cultures don’t have to be the same for everyone to be successful. “Facebook has a culture of ‘move fast and break things,’” he notes, as the Facebook alum who co-invented the Like button. “That works for Facebook. It would work really badly for Boeing. But every company should have a focus on defining, creating, maintaining, and growing their culture in a way that aligns with their values and reaches their objectives.”
Treating culture like product
My organization, research and consulting firm Great Place to Work, has investigated what happens to small companies as they scale. Every time a company doubles its number of employees, opportunities to innovate and employees’ confidence in leadership drop precipitously. Companies that remain a great place to work for all their people as they grow larger enjoy significant advantages in employee recruitment and retention, innovation, and customer service.
From their first week as a company, Asana has been committed to not just getting culture right, but scaling it with the growing needs of the business.
They think about designing and building culture very much like designing and building their software product. No product is perfect, but can be based on an intentional design, and improved over time through constant iteration.
At Asana, culture is thought of as a product with many different features. Each of those features has an owner, someone assigned to that area of responsibility. Within each area, the company goes through the product cycle of design, implement, measure, and improve. As with any other product, that process creates a momentum of its own. Measurement feeds into design, and the cycle starts again.
The company uncovers culture “bugs” in several ways. When they do find bugs, they use their Asana product to manage their internal culture work, just as they do for market-facing work.
For example, Asana applies their values of mindfulness and focus whenever an employee leaves the company for any reason. After a departure, management conducts a “5 Whys” exercise. They ask themselves what conditions caused the departure, and then why those conditions developed, and so on, at least five layers back. Any bugs uncovered in this exercise are then entered into the relevant area of responsibility in Asana and addressed in the next round of design.
As a result, Asana has designed a clear and transparent workplace where employees take responsibility and ownership for their work, are inspired about the mission, and operate in as frictionless an environment as one could expect in a rapidly scaling organization. One employee describes their culture as focused on “eliminat[ing] ego and practice[ing] mindfulness.” As a result, he explains, “there’s minimal politics, stress, and chaos.”
Culture pays off
Asana’s approach to culture is paying off. Last year, the company grew at blistering rate of 80% and now claims 30,000 paying customers. In comparison to other small and medium-sized companies, Asana’s employees rank them #2 among 2017 Best Medium Workplaces and #1 among 2018 Best Small and Medium Workplaces for Technology. In competing against companies of any size, Asana placed #66 among the 2017 Best Workplaces for Women.
Then there’s that recent $75 million-dollar vote of confidence from Al Gore and others who expect a return on their money.
Findings from the U.S. Bureau of Labor Statistics show that in 2017, Bay Area unemployment was 34% lower than the national average, and wages were 39% higher. This tough labor market puts a lot of pressure on companies to compete for the best national talent. Great Place to Work research finds Bay Area companies top those in other major markets such as New York, Los Angeles, Chicago, and Texas on metrics related to employee experience, innovation and agility.
Companies like Asana prove the real Bay Area way. It’s not about catered meals and pet-friendly offices. Instead, the best workplaces consciously choose to build a strong and unique culture that helps outpace the competition and generate more revenues. Then, they reinvest the earnings in maintaining and growing their cultures as a competitive advantage and mission accelerator.
Sarah Lewis-Kulin is Vice President of Best Workplace List Research at Great Place to Work, the longtime research partner for Fortune’s annual list of the 100 Best Companies to Work For and other best workplaces lists, including the Best Workplaces in the Bay Area. Lewis-Kulin is also co-author of the forthcoming book, A Great Place to Work For All.