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The digital age has thrown up a number of surprising success stories, including Uber, AirBnB and now WeWork (part of the We Company umbrella of businesses). Agile and fleet-of-foot, they leave the behemoths of the pre-digital world at the starting gate.
At London Business School’s 2019 HR Strategy Forum, Stephanie Houston, WeWork’s director of talent acquisition for Europe, Israel and Australia, took part in a conversation with Julian Birkinshaw, professor of strategy and entrepreneurship, on the topic of leading transformation and the imperative to innovate.
Houston, who joined WeWork in 2018 after three years at Booking.com, is experiencing the dizzying feeling of heading up recruitment in a rapidly expanding company: in the past year, WeWork has taken on more than 1,000 new employees.
Founded in 2010, WeWork is a business that lets office space. That sounds conventional enough, but the WeWork offering comes with a twist. The two founders, Adam Neumann and Miguel McKelvey, both grew up in community environments, and that collaborative ethos sits at the heart of the business’s approach: start-ups, freelancers and corporates (all referred to as “members”) share workspace where they can trade expertise and bounce ideas off one another. A recent study found that third of members said that other WeWork members had given them ideas on how to improve their businesses. Facilities such as office supplies, cleaning, high-speed internet and even free craft beer are all part of the package. WeWork members have access to health insurance, an internal social network, social events and an annual summer retreat.
The company’s own staff are based in WeWork shared spaces, and community teams in each office make sure that it all runs smoothly. It’s a formula that has proved compelling: the firm now has over 10,000 employees, manages 45 million square feet of office space globally across 27 countries and has a valuation of $47bn. Birkinshaw, using a term coined by organisational consultant Warren Bennis, describes WeWork as an “adhocracy”. While a bureaucracy privileges structures and rules, and a meritocracy privileges knowledge, an adhocracy privileges action.
So how does it feel joining a company that embodies the zeitgeist so effectively? Houston says that when she worked in Amsterdam, she walked past the WeWork office every day, and was initially drawn by “how happy everyone looked.” Now she’s an employee, it has lived up to expectations: “When you walk into a WeWork, the physical space is what you see – our beautiful plants, our artwork and layout. And regardless of whether you’re in a WeWork in London or in Shanghai or Sydney, you get that feeling of community with a local stamp so that you still know and feel that culture and country that you’re in.”
Because WeWork employees inhabit the same space as members, Houston has observed how the benefits of being part of a shared community work out in practice. She mentions overhearing a conversation between founders of two separate startups: “They were talking about challenges that they’ve got in breaking through. And one of them said, ‘I wish I had a marketing mindset. I wish I knew what to do next.’ The person he was speaking to is a marketeer – that’s his bread and butter.
And so he said, ‘You know what, I’m happy to sit with you and we’ll walk through it together.’” Having joined at a time of rapid expansion, Houston has had to hit the ground running. So how hard is it to find staff who will fit into the firm’s distinctive culture? “I’m not a fan of the phrase ‘cultural fit,’” she says. “I definitely look at this as a ‘culture add.’ I think that as long as the culture that you’ve created isn’t diluted, we keep adding to that with people who embrace our values and embrace what we stand for.” The business doesn’t compromise on values: “We have spoken to candidates who on paper we’d be idiots not to hire but there’s just something about that connection that hasn’t been there.”
Because the business has to recruit staff in a number of different countries, including places it doesn’t yet have a presence, Houston has to be flexible about recruitment methods. In some cases, WeWork uses recruitment agencies, but it also headhunts through LinkedIn, targets universities and colleges, runs Boolean searches on Google and advertises in a variety of outlets to make sure that it attracts diverse candidates. IT plays an important part in decision-making and ensuring the process runs smoothly: WeWork is moving to a new applicant tracking system to improve decision making, and it’s also looking at adopting a CRM tool to help build communities of candidates.
Competency-based behavioural assessments are an important part of the recruitment process, and a good deal of care is taken to make sure that the interview process is fair to candidates from different backgrounds. WeWork “very consciously creates diverse interview panels to make sure that candidates who come in get that sense of belonging even before they answer the first question of the interview,” says Houston. The onboarding process as “frictionless” as possible, with every new hire spending one or two days working with the community teams and helping out with the front desk or events being organised in the building.
The company may have a reputation for spontaneity and fun – how many other firms happily fly 4,000 employees to a global summit in Los Angeles? But to succeed as a business it can’t shy away from the nitty gritty of spreadsheets and employment legislation. And this is where Houston’s experience comes in useful. She began her career in the oil and gas sector – a far cry from an adhocracy such as WeWork. The rules were so rigid, she says, that if an employee who walked down the stairs without holding the handrail would be given a stop card and expected to explain themselves to their manager. But working in that environment has been an asset: “Sometimes structure is a good thing – sometimes flying a million miles an hour without having a clear vision isn’t the best way of delivering or executing. One of the things I’ve learnt is that there is a magic to discipline.” In a room full of creatives, Houston is the one who draws out a roadmap that has timelines and budgets.
As WeWork grows into an enterprise, is it possible to maintain the nimbleness and agility it started with? “There’s only so long a company can say that they are a start-up,” says Houston. “But you can still operate as a start-up – that never truly goes away. If the entrepreneurial spirit is there, that will continue.”