Why Hiring for Cultural Fit Matters

By: Barrett D. Carlson :: January 29, 2020

Cultural fit is a concept that has had more ups and downs than a rollercoaster. One minute it’s falling out of favor. The next, it’s the secret to hiring success. According to the Harvard Business Review, cultural fit is “the likelihood that someone will reflect and/or be able to adapt to the core beliefs, attitudes, and behaviors that make up your organization.” Part of the problem with cultural fit is that it is a concept that is a struggle to define in practical terms, but yet everyone knows when it is missing. Simon Hitzig, Accord Financial President and CEO, explains the lack of cultural fit this way: “When we bring someone on board who doesn’t fit the culture, they can become the weak link in the chain. Not only is it distracting, but the wrong hire can make other team members question our direction and resolve.”

Of course, being able to fit the culture means that the organization needs to first have a well-defined culture. A snowboarding firm might prefer all employees to have a high level of enthusiasm for the sport. A voluntary organization might seek people who have a great deal of patience and tolerance. At Accord, a passion for change is what makes the company thrive. “Our goal is to be a leading expert in our field, and at the same time, embrace change and successfully adapt over time,” stated Simon. During the past forty years, the company has had several business acquisitions, management succession, and a rather dramatic change turning from a narrowly focused finance company into a broad-based lender to many different types of clients. With this never-ending pattern of change, hiring the right person is crucial to the company’s continued success. Recently, we asked Simon why cultural fit matters and how to hire with this in mind.

You recently filled two new key executive positions at Accord. In both cases, you cited "cultural fit" as the number one criteria in filling the role. You even bypassed more seemingly qualified candidates because of cultural fit. Why is hiring a candidate that doesn't fit a company's culture a problem?

All of our stakeholders, especially our clients, count on us to perform. Our clients are always faced with an immediate challenge and/or opportunity where the right financing can make the difference. Simply put, we don’t think we can deliver effectively and sustainably without the right culture. There is never a single hero who can make everything happen for our clients; financing is a team game. And the team can’t perform without complete alignment – culture creates that alignment. You can probably imagine by now that Accord’s culture includes a strong bias towards collaboration!

I do want to answer the question about recent hires. One of them was for Accord’s head of human resources, which is a role that exists right at the center of corporate culture. We needed someone to help bring six distinct operating businesses together as a unified platform. When she used the phrase “productive discomfort” in the interview, I knew we had our new leader. All six businesses worked together to craft a new strategic plan this year, but there’s no question that any “work family” of 100 people or more will have moments of discomfort. We needed someone to understand and navigate that tension.

Some say that cultural fit just means hiring someone you'd like to have a beer with. In assessing people for cultural fit, do you run the risk of hiring the same type of person over and over? You've worked hard at Accord to hire people with differing education, experience, and backgrounds. How do you ensure that hiring diversely is a priority?

I think the beer test has some merit! No seriously, our key principles revolve around putting people first, challenging the status quo and a continuous pursuit of simplification as the key to outstanding client experience. We need to see every problem from many angles – it’s the only way to do the right thing for our clients. Our people represent diverse backgrounds, encouraging free exchange of ideas, which supports our desire to constantly adapt and evolve.

There are many people who don’t want to work this way, but the principles don’t limit diversity. In fact, it’s quite the opposite. And it’s not enough to just aim for diversity in hiring; you have to create an environment where everyone is open to teaching and learning. This is especially tricky with functional experts, or anyone who has worked in the same field for decades. For example, those of who have been in this business for a very long time are working hard to learn from the millennials on our team, but you can imagine our instinct is mostly to teach.

Are there specific questions, or ways of questioning, that can get at cultural fit? 

We listen for words and phrases that show awareness of others in the work environment and an appreciation for the idea that nobody is an island. Any candidate that describes success as hers alone probably isn’t the right fit here. To go a step further, we really like people who cast a light on their teammates. Did they mentor, promote, praise others, and are they proud of that? And we love people who are confident that they don’t have all the answers. That makes me confident they will stay curious, and ask the questions they need to ask.

I think the best approach is to ask questions about how and why they did things in past roles. Focusing only on what they did won’t reveal anything about who they are and how they will fit in.

Are there times you wouldn't put cultural fit as a priority in hiring? What if you found someone who is culturally a great fit, but requires more training vs. someone who has the needed skills and could start working right away, but maybe isn't as great of a fit at the outset?

I’m going to answer counterintuitively – yes, there is a time to hire without cultural fit. A company’s vision and values shouldn’t change much over time; however, “culture” describes how a company actually operates every day. There are times when a company should gently shift its culture; such as, if forces like technology, demographics, social norms, etc. cause the landscape to change, corporate culture may need to adapt to this change. In those cases, it can be useful to hire just outside “fit,” and move to where the puck is going. We’ve done that at times – it helps to do it with people who are natural team builders.

As for skills on day one versus training – I favor training every time. Training is a great opportunity to reinforce mission, values and culture. Plus, being good at training is hugely valuable for sustaining success over time.  

Barret D. Carlson, Partner

As a Partner at CapX Partners, Barrett is responsible for capital markets, business development and investor relations.

With a background as an entrepreneur, Barrett enjoys trying to help clients grow their own business with the solutions provided by CapX. Barrett began his career working in the manufacturing and distribution industries, which gave him a strong understanding of many of the issues facing CapX’s clients.

Prior to joining CapX in 2004, Barrett was a Partner in...