Four Steps to Building Great Companies

Jim Ludema Culture, Return on Values


ROV growth chart w hand

For the last 18 months, our Center for Values-Driven Leadership has partnered with the Small Giants Community and the University of Michigan’s Center for Positive Organizations on a three-year research initiative that asks the question, In small and mid-size businesses, what is the link between culture and profit?

To date we’ve thoroughly examined the academic literature and spent days inside nearly a dozen high performing/high culture companies. Though our research is far from done, we’ve drawn a few early theories about the things exceptional companies do differently when hiring in order to build a great company:



  1. Source differently:Almost without exception, the companies we’ve studied find new hires through referrals from current employees. “Your employees know who they want to work with. They won’t let you down by recommending a low-performing candidate.”
  2. Screen for culture fit:High culture/high results companies are clear about their values and the values their employees need to possess, and use screening questions to assess a candidate’s fit.

    One company we’ve studied believes compassion is the number one value their employees need. The first question during their interview is, Define compassion. If the candidate can’t offer a suitable response, the interview ends.

  3. Let colleagues make the decisions:Many of these companies let colleagues interview the top candidates. This gives everyone a sense of buy-in to their new team member, and makes trust-building easier.
  4. Never hire a “maybe.” 

In fast growing companies, there’s often a lot of pressure to hire quickly. But the companies we’re studying won’t be rushed in making a decision. One company told us, ‘We never hire a maybe.’ There is too much risk in hiring someone who might fit.

What happens when leaders execute well on these four factors? The difference is noticeable. One human resources director said to us, “Take a look around the company. You won’t find any jerks here.”

That’s the difference hiring for culture fit makes. Once you have a strong team in place, you retain talent, innovate faster, delight customers, and meet your goals. It’s a first step in a long plan toward strong culture and even stronger results.

Is this all that is required to have a great company? Of course not. But do this well, and you’ll be light years ahead of the competition.

Want to learn more about the Return on Values project, and see short videos from the interviews? Visit 

A previous version of this article appeared in Benedictine University’s Voices magazine.

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