Simple CEO Josh Reich
Simple CEO Josh Reich speaks at TechFestNW.

Josh Reich regularly hosts executives from other companies who want to learn how his startup creates a healthy culture and work environment that drives innovation. After seeing the ping pong tables, the kegs, and the open-air office without cubicles, some think that if they implement similar amenities, it will automatically improve culture and the pace of innovation at their own companies.

Not so fast.

Reich, CEO of Portland-based banking startup Simple, spoke at TechFestNW earlier this week in the Rose City about creating a culture that keeps employees happy and encourages success.

Reich, who moved his 300-person company from New York City to Portland in 2011, outlined three pillars that Simple leans on for its culture: Listen to customers, create an environment with freedom, and have a shared purpose.

Listen to customers

Reich said that lots of companies like to say that they listen to customers, but then outsource the customer interaction tasks to a remote call center. Simple uses internal employees to speak with customers on a daily basis. Reich said these conversations are extremely important to help your company continue innovating its product on behalf of the customer.

The CEO also showed off this chart that highlights all the internal conversations happening between Simple employees on GitHub, which is used to manage source code, brainstorm product ideas, and discuss culture.

“It’s a big mess and it’s awesome,” Reich said.

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Each circle represents an employee; the red ones are customer service team members. Reich noted that the red circles are spread throughout the map, which he likes.

“It tells me that the customer stories are shared across the company,” he said.

Work environment that creates freedom

Reich said that many companies say they want to hire smart, talented, and creative people, but when they do, they put them at a desk and give them specific tasks to complete.

Simple does it differently. Instead of giving an employee a solution to implement, it tells them about a problem that needs to be solved — and then lets the employee figure out his or her own way to go about doing it. Reich called it “servant leadership.”

“The reason this is important is because you want people to have pride of ownership over their work,” he said.

Reich noted that leaders should create ways for employees to be involved during the ideation stage. This will ultimately help the company come up with better solutions to problems, he said.

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Strong shared purpose

At the beginning of each year, Simple has an all-hands meeting where the company sets clear annual goals that outline what it wants to achieve. This gets everybody on the same page and helps establish focus.

Reich said that you can have an environment with freedom, but without a shared mission, things can get out of control.

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“We want people to use their creativity to drive us toward a common connection,” he said. “Clear goals help with that.”

Reich said it’s also important to have a strong value system — Simple’s values are about empathy, curiosity, craftsmanship, and efficacy — but he said it’s not enough to post these values around your office and call it good. Leaders must think about how the values are unique to the company, and how you integrate them into what it means to be an employee of that company.

“How do you integrate values into your hiring process?” he explained. “How do you integrate them into performance feedback?”

Part of having a shared purpose also means having transparency, Reich added. He said he shares information and slides from his board meetings with employees at Simple’s weekly all-hands get-together. It’s not just about good news, either.

“We don’t only celebrate our successes and wins, but we speak openly about our failures,” he said. “We have a really strong culture of blame-free learning when it comes to failure. We acknowledge that it happens, we do our post-mortem process, and we ask how can we learn and how can we get better?”

Added Reich: “Transparency is a shortcut to building trust.”

Reich noted with the amount of customers Simple added last month, it would have required 900 branches, 6,000 employees, and a payroll of $180 million for a traditional bank to achieve the same growth rate. Simple employs 300 in Portland.

“We are supremely efficient because we have a culture where people are highly-engaged to do their best work and drive the mission forward,” Reich said.

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