The Culture Business
Next Jump built a $2 billion e-commerce business based on its revolutionary workplace culture that values self-development above all else. And the teamwork starts at the top, with co-CEOs Meghan Messenger and Charlie Kim.
Next Jump is a tech company, but that’s not really the point of this story. The New York-based e-commerce platform makes its money by connecting employees at large companies — its clients include 700 of the Fortune 1000 — to product discounts and other employment incentives through its PerksAtWork program. But Next Jump is special not because of what it does, but because of how it operates. The company’s culture is so unusual, so deliberately different from the mainstream, and has proven so valuable that more than 1,000 people have already attended the leadership academy the company created to help export its best practices and lessons to other institutions. In order to help other companies even more, Next Jump is also in the process of releasing — for free — 50 different technologies and apps its engineers have developed in support of its own culture.
What’s so special about the place? Next Jump is a premier example of what Harvard researchers Robert Kegan and Lisa Laskow Lahey call a “deliberately developmental organization.” The company is one of three profiled in the pair’s 2016 book, “An Everyone Culture,” which is quickly becoming a new classic in the conscious business world (read it!). In practice, “deliberately developmental” means that Next Jump puts as much emphasis on helping employees learn and grow as humans as it does on any particular traditional business or revenue goal. According to Kegan and Lahey, deliberately developmental organizations reap more profits, have more satisfied and functional teams, and are more innovative than companies that don’t take this approach. “What if a company did everything within its power to create the conditions for individuals to overcome their own internal barriers to change, to take stock of and transcend their own blind spots, and to see errors and weaknesses as prime opportunities for personal growth?” the authors ask. “What would it look like to ‘do work’ in a way that enabled organizations and their employees to be partners in each other’s flourishing?” Next Jump offers one answer.
“We don’t believe you can change the world without changing work,” explains Next Jump co-CEO Charlie Kim. “Work is where we spend most of our waking hours. It’s such a central part of adulthood.” Through dozens of ever-evolving practices and initiatives (see page 48), Next Jump has created a world where constant self-improvement — and an equal commitment to participating in the betterment of others — is the expected social norm. The company sees everything employees do, from serving each other breakfast to leading meetings to the actual challenges of running an e-commerce business, as learning labs to help foster personal growth and the ability to help others — and by extension, create a better, more successful company. That idea is captured in the company’s core mantra: Better Me + Better You = Better Us.
We sat down with co-CEOs Charlie Kim and Meghan Messenger at Next Jump’s Manhattan headquarters to learn more about how they created their unusual workplace and what lessons they’ve picked up along the way.
Let’s start with some fundamentals. What is “culture”?
Charlie Kim: We get asked this question a lot. It’s basically the sum and the set of what’s “normal” in your company. What time people come in, what time people leave, what happens when food comes out. It’s all these unwritten rules.
And what drives the norms are rituals. Often as companies build, they just let rituals form on their own without being deliberate about it. It’s no different from us as individuals. If you just eat when you’re hungry, it’s not necessarily the best ritual versus maybe setting up certain times for breakfast and lunch and snacking and so forth.
What a lot of companies will try to do is create change in the classic New Year’s resolution style, which is all willpower. “I know what I need to do so I have now promised myself to do this.” A lot of times you’ll see companies focus on bringing in outside consultants, having a speaker series, all kinds of ways to drill in the right thing through willpower. It doesn’t work that way.
We obsess about understanding the rituals that occur on a daily, weekly, and monthly basis. These rituals end up being the building blocks of culture. People we meet don’t seem to understand that well enough.
How do you define Next Jump’s culture?
CK: It’s this constant responsibility to better yourself but then also have a responsibility to pay it forward and train others. The diehard conviction that human beings have an endless capacity to upgrade.
People will say “I can’t” because they’re so trained to say “I can’t.” Then they point to someone else who could or is. We always say, “Why not you? Give me the reason why not you?” And we’ll throw back at them countless examples of others who have worked through the hard training and practice, the repetition, the rituals, and upgraded. Never on our watch, in the midst of our presence, will we cap someone’s potential and believe they can’t grow beyond a certain point.
Meghan Messenger: Part of where that comes from is the fact that both Charlie and I experienced major growth. We were the underdogs in our families. We both had siblings who went to better schools, got better grades. If we could do it, anybody can do it. It’s that feeling.
7 Ways Next Jump’s Culture is Different
HERE ARE SOME OF THE SPECIFIC ROUTINES AND PRACTICES THAT SET THE COMPANY APART
1. Performance reviews are only 50 percent based on revenue contributions; the other 50 percent is about cultural contributions.
2. New employees, whether they are straight out of college or senior executives, spend at least their first three weeks in Performance Leadership Boot Camp, working customer service roles and undergoing a battery of tests and exercises to identify and work on their personal character weaknesses. If candidates don’t fully engage with the process, they either stay in boot camp longer or get $5,000 and best wishes on their next endeavor.
3. Every employee is assigned a Talking Partner who complements their weaknesses. Talking Partners start every work day with a session of checking in, venting, and strategizing for the day.
4. Every week, two sets of Talking Partners and a coach meet for a one-hour Situational Workshop, in which the participants use a real challenge they faced that week to learn about themselves and their problem-solving skills.
5. Every month, in an event called The 10X Factor, 10 employees give five-minute presentations in front of the entire company about progress they’ve made in culture- or revenue-building. Each employee gets brutally honest feedback from a panel of judges about the presentation — especially to what extent they revealed their learning process or were willing to be vulnerable.
6. Managers deliberately give employees roles they’re not ready for, along with coaching on how to grow into them.
7. New straight-from-college prospective hires are interviewed twice a year in an event called Super Saturday. All employees are invited to participate in the day-long group interview process, complete with an app that supports an intricate rating system. The process not only helps the company choose new-grad hires but also lets it understand which current employees are best at interviewing for which particular character traits in the long run.
Thinking back, can you tell us more about where this all started? How you came to have such deep convictions about people’s potential for growth?
CK: For me, it originates from my own father. My father is the most famous corn scientist in the world. He’s made a huge impact. I grew up with so many people, some of the best scientists in the world, telling me, “Your dad has discovered the keys to ending world hunger.” He’s been nominated for the Nobel Peace Prize five times. He used to always say, “Winning the Nobel Prize would amplify my findings and technologies; it’s like an amplifier that would end world hunger.”
But he’s not a very good presenter of his work, in written or oral form. As the oldest of three children, I grew up watching his struggles and his pain and how everybody tried to take advantage of his impediments. People would come and say, “I’ll help you edit your Nobel application, but I want to win it with you,” just for editing the application. I remember watching this, infuriated. And I had the exact same challenges as my father. I spoke too fast, I had a really bad stutter, and I couldn’t present work.
I’m 14 years old, I’m in my dad’s office correcting a paper over Christmas break, and I read a one-page article on his desk that talks about how “Dr. Kim is one of the greatest scientists the world has ever seen.” But by the end, it says, “But he’ll never succeed because he can’t present his work.” I remember it was like a dagger to my own heart, because not only did I sort of understand what that scientist was saying, I had the exact same quality.
Then, fast-forward 10 years, I’m successfully raising money for Next Jump, I’ve pitched a thousand angel investors, and I walk in one day and I’m like, “Where’s my stutter?” Just out of necessity for survival, to keep my own baby [company] alive, I learned to present. That was almost a spiritual moment. I said, “What am I doing? I’m trying to build a tech company. My dad’s trying to end world hunger. I’ve got to go leave and help him.”
I tried to leave. But 9/11 hits, the company goes from 150 employees down to four people, we have nine months of unpaid rent, six eviction notices. My own baby is on life support and dying. I can’t leave. I’m just trying to revive Next Jump, and we build and build. Next thing you know, we get back up to 200 people. The company is doing well, and before I knew it, 10 more years had gone by. I turned 43 this year. But when I turned 34, I got a phone call from my mother that my father had a stroke — he’s still alive [but not doing new work]. That same month, I met a billionaire who said the most profound thing. He said, “Charlie, I only buy art from living artists. I believe in putting fuel behind those who can do something with it.” That day, it felt like the Nobel Prize would not be an amplifier anymore, but it would just be a trophy on our mantle.
We used to have the mantra “Build the best place to work,” as in, all the talent in the world would want to come here. We changed over the years to say, “We want to do little things so that others can do the great things they’re meant to do.” And whether it’s money for opening public after-school programs or advising and mentoring engineering for non-profits, it would only be little if our cup is over flowing. If our cup is over flowing, it’s little to us. Then we can find the right people who are making a difference and put fuel behind that. That “better me, better you” mantra is the shortened version. The phrase “Do the little things so others can do the great things they’re meant to do” was hard to remember, so we shortened it to “Better me + better you = better us.”
What are the most critical elements of improving organizational culture for most companies?
CK: Most organizations would now agree that talent is the number one predictor of future success. Everybody’s obsessed with three things around that: attracting, retaining, and developing talent.
However, the mistake we’ve seen is that it’s done in this order of attracting first; we see a lot of obsession with the hiring process. And everyone will talk a lot about retaining talent, especially top performers. Development usually gets talked about last, or not at all.
We’ve found it to be reversed in order of importance. Development is the single most important element. Priority always matters. If you’re an organization that has developed talent better than anyone, you’ll end up retaining your top talent, because if, as an employee, you get a great education, you’re actually getting more from the job than just compensation. When as a company you develop people well, you retain them, and when you develop and retain well, you attract the best ones to come into your organization. Look at sports teams that are notorious for developing the best players or teaching hospitals that are notorious for building the best doctors: there’s a line of people trying to get in there and the ones who are there are trying to stay.
Within development, we’ve found feedback to be the most critical part — the ability to build your culture and your environment so that feedback is occurring in real-time across the entire organization. People improve fastest by making micro-adjustments in real-time, whereas in most companies, of course, the opposite occurs: one- to two-times-per-year performance evals, and you’re making an adjustment maybe one time a year.
What are some of the common mistakes you are seeing company leadership make that typically negatively affect company culture?
MM: Two things. One is a lack of vulnerability in the culture, and the second is a lack of authenticity.
People believe vulnerability is showing weakness. It’s actually something that takes courage. In many ways, when leaders demonstrate vulnerability, the rest of the team looks at this as the leadership giving permission that it’s okay to fail. They model that you can make mistakes and that you can fail. It starts at the top. You can’t go in and ask your people to be vulnerable if you’re not vulnerable too. As an example, back in 2012, as a CEO, Charlie didn’t tend to lead with as much vulnerability.
CK: It was more like none.
MM: I remember distinctly there was a moment where, at an all-hands staff meeting, Charlie got up in front of the staff and shared a very personal story related to missing a graduation of his son Jackson’s, who was 3 at the time, and how that made him feel. As he was talking about this mistake he made and how upset he was that he made a decision to not be there for Jackson, the look on the faces of our staff was sort of like, “He’s human, and I can’t believe he’s sharing this with us, and I’ve done stuff like that too.” I can’t quite put the right words to it, but I look back at it as a defining moment when our culture really started to embrace vulnerability, that it’s not weakness, that it takes a tremendous amount of courage to actually share. I think vulnerability is still lacking in so many cultures because it’s looked at as weak.
The second mistake we see is a lack of authenticity, which we call the “Lying, Hiding, Faking Problem.” Being inauthentic is contagious. For instance, if you’re in a meeting and everybody’s talking about something, and you pretend to know what’s going on, everybody else in the room takes cues from that. They don’t want to say, “I have no idea what we’re talking about,” or ask questions because they fear looking bad.
This feeling that you can’t be authentic and say what’s really on your mind — that you don’t understand, or just whatever might be on your mind — is so contagious in organizations, you don’t know what the truth is anymore. We say, “You’re being judged all the time by people anyway. You’re going to look bad eventually if you don’t clarify and understand what’s happening.” We look at authenticity as a basic foundational element in life and, of course, within an organization. If you don’t have that, that’s the root cause of a lot of problems.
CK: Meghan hit the point exactly right. When you don’t have authenticity, you have inauthenticity, and both are very contagious.
What were the largest mistakes that you made at the beginning?
CK: There are so many. In 22 years...
MM: I think we probably made every possible mistake you could make because we had never run a business before. I joined four years after Charlie started the company but, oh, my God, every mistake we could have made, we made. Hiring, onboarding... CK: Firing, promoting... MM: Getting in front of our skis... CK: Strategic partnerships...
MM: Just everything.
CK: But if I had to pick one, it’s a lesson in humility in the sense of how wrong I could be. I couldn’t believe clients like Lehman and Bear Stearns went out of business. You could have never planned for 9/11 and financial crashes and whatnot. Things go wrong. That was a very hard lesson that eventually got baked into almost everything we do, including the hiring process.
Tell us more about how humility relates to hiring.
CK: We used to screen for stunningly brilliant people who were driven. Before we knew it, we built a sizable team of jerks who literally did not care at what cost they won — it was all about who was the smartest. As we dug into the research, we found that in sports teams, stars without humility are toxic for their culture. The Blue Angels, the top fighter pilots, say, “If you don’t have humility, you die.” When you start to look at the most elite performers in the world, you see how important a role humility plays, but when you start hiring, you don’t think about that. You think more about confidence, conviction, drive, or intelligence.
MM: We look for all of that, but it’s screening for that added ingredient of humility that’s been game-changing. It has also driven more diversity. There are a lot more women in leadership roles at Next Jump.
CK: When we didn’t screen for humility, 90 or 95 percent of the engineers were men. But when we screened for humility, diversity showed up. Now one-third of our leadership enrollment is female, and one-third of our engineers are women — things that you would not expect out of a tech company.
What are the practices that inspire continual improvement within your team, and how do you keep people consistently motivated to want to improve once they’ve gotten in the door here?
MM: We don’t look at continual improvement as optional. If you’re not improving over time, if you’re not growing, you’re dying, which sounds very extreme, but it’s true. If you’re not growing your knowledge or any facet of yourself, you start to burn out. There’s a misconception that burnout is working too many hours, but actually it’s more about not feeling yourself growing. I think most employees want that; nobody comes to work saying, “I don’t want to grow.”
Peer influence is one of the best motivators. We could say as leaders, “You’re not growing enough,” but when you hear it from your colleagues, it’s so much more powerful. We’ve created a culture of feedback, which is one of the most important things we do, because feedback makes you want to grow. It’s hard for people, but they actually get hungry for feedback when they see other people getting it and doing something with it and improving and growing. That’s so inspiring, motivating, and rewarding when you see other people do it; that’s what makes you want to do it.
Do you have any concrete tips for giving and receiving feedback?
MM: If you really want somebody to take advice, they’ve got to trust you and your intention. And provide context — if you’re trying to help them grow, sometimes you need to share that with them: “Here’s why I’m saying this.”
I’ve always found it very difficult to give critical feedback. I found a bit of a crutch to first say, “I’ll start by telling you how hard this is for me to tell you this, and I think it might be hard for you to hear.” It braces and prepares everybody for the difficult conversation. It takes just a few seconds and it sets the tone of “This is going to be hard.” I’ve found that if they know it’s hard for me, it’s still harder for them to hear it, but it shows vulnerability, that my intention is good and I might be nervous too.
CK: One of the most critical mistakes in giving feedback is that you don’t express and explain the potential. As a rule, we don’t give any feedback to someone we don’t believe has more potential. If they’re already done, they can never get better, so why would you give them feedback? It’s just mean. It’s cruel. But if their potential is here [raises hand] and they’re down here [lowers hand], you’re giving the feedback to bring them up to their potential. The mistake occurs when you give the feedback without actually expressing the potential you see in the person.
The other big error we see more in companies is not creating the practice-ground to “do it bad.” You first learn how to take advice badly before you learn how to take it well. You first give feedback badly before you do it well. Every organization wants to skip that bad step and jump straight to doing it well.
When people take advice badly, it’s usually one of two errors. They get angry, typically at the form of delivery. “That feedback was good, but I don’t like the way you said it, so I’m just going to reject all of it.”
It’s the job of the recipient to find the pearls of wisdom in the feedback regardless of how people deliver it, because most people are very bad at delivering feedback. The other side is a thoughtlessness to how you take advice: “I’ll just follow it blindly, word for word, with no thought of my own.” Where giving feedback usually goes bad is you coddle or you go brutal — there’s no in-between.
The hard part is realizing you have to accept and tolerate those four things — angry feedback-taker, following-blindly feedback-taker, coddling advice-giver, or brutal advice-giver — showing up a lot before you get good. But because organizations usually feel like “We cannot have that!” you’ll never develop a culture where people are good at either taking or giving feedback.
Can you speak a little about the importance of failure?
MM: We look at failure as required to do anything, or to learn anything. There’s no straight path to success and growth. You’re not born knowing how to swim. You’re not born knowing how to drive a car. You have faith that you’ll figure it out, but you have to fail a little bit first before you do.
CK: One of the biggest struggles in most companies is how to become more innovative. How do I get my people to take more risks? How do I get more creativity in the company? That’s a common problem for most people, and I think most companies now say, “If you don’t innovate, you’re going to die.” It’s that important, and yet they won’t tolerate failure.
If you can’t tolerate failure, it’s like saying “I don’t tolerate any experimentation,” because, by definition, an experiment has to have the ability to fail or it’s not an experiment. In most companies, the fear of failure is so predominant that the company has been built to never let failure happen: Failure hurts your brand, your reputation. It leads to shame. It leads to being labeled. But we’ve found if you want to learn how to be innovative, if you want to learn to succeed, you need to create the space for failure.
Word on the street is that Next Jump doesn’t fire people. Would you talk about that? How do you get people to not be on autopilot? What if someone turns out to be terrible at their role and you’re just decreasing efficiency as a result of being beholden to this policy?
CK: I can’t tell you how many startups and companies we’ve met that get inspired by the no-fire policy and say, “Oh my God, I’m going to institute a no-fire policy right away!” I’m like, “No, no, no. That is not a level-one program. That is a much later stage.”
As companies consider this, the questions they really need to ponder are how good is their hiring process? How good is their onboarding process? And how good is their development process? It took so many other programs to be in place before the no-fire policy kicked in.
We used to adopt the Jack Welch model of getting rid of your bottom 10 percent. We did it for years, but we still kept hiring better and better. We got to a point in 2012 where we found that there were surveys going around the office of who was going to get fired by the end of the year. But at that point we had hired so well we actually hadn’t planned to let anybody go. I remember we sat down as the leadership team and said, “What would happen if we didn’t fire anyone? What if that was the one lever we didn’t pull, but we could press every other lever, what would happen?” It took us around six months to ponder, think through, and experiment, but then we went in front of the company and declared this no-fire policy.
People always ask what happens if someone does something unethical. There’s a line you cannot cross: If there’s a criminal, ethical, or moral issue, we’re getting rid of you instantly. But if your child came home with Cs, would you say, “That’s it!” and put them up for adoption, or would you work on helping them develop?
Firing, in many ways, is the easier option. Choosing to commit and develop someone is the harder choice. It forced us to get better in our practice of developing people and developing leaders.
I was curious about the co-CEO situation. When did that happen, why did that happen, and how is it happening successfully?
CK: The official title didn’t change until earlier this year, but we’ve been running the company together since around 2008. The title we initially put for Meghan was chief of staff. Our thinking was, when you watch the president of the country, the chief of staff and the president run the country together. But everyone thought Meghan was head of HR, everyone thought that she was my assistant. We went back and forth a lot on the idea that I would be CEO and she would be co-CEO. But imagine saying “I’m a parent and you’re a co-parent.”
We actually believe one of the biggest mistakes in airplanes is using the terms pilot and co-pilot. I think it was Malcolm Gladwell who wrote in the book “Outliers” — and this is embarrassing because I’m Korean — that the airline with the worst safety record is Korean Air Lines. It’s a cultural thing: Most airplanes are built to be flown by two people. But Korean culture is so strong in prescribing that the senior person, even when doing something wrong, can’t be vulnerable and admit to it, and the junior person, seeing an error, won’t correct them. The co-pilot will literally watch the plane crash, killing everyone including themselves, because culturally they cannot correct the pilot.
What we’ve found — similar to flying a plane or even parenting — is that leadership is a two-person sport, because decision-making is that difficult. Imagine if Meghan was the co-CEO but sat behind the cockpit, behind the door: she would only see what I explain to her, as opposed to seeing it for herself. How many people have you seen read the same article and highlight two completely different parts? We have different points of view and that’s critical to decision-making.
MM: The shared responsibility when you’re both co-CEO; it’s the shared stress, just like parenting. You don’t want to be just like each other, though. As I always say, I’m a bad version of Charlie and he’s a bad version of me. From a character balance point of view, he would definitely skew towards what we would call more arrogant because he’s over-confident. I would skew more towards what we call insecure because I’m over-humble. But we can both play the other side. It’s not that I’m insecure in everything, it’s just that under stress, I would tend to not speak up. He would speak up.
CK: There are many differences between Meghan and I but there are two things that we share in common. One is —
MM: How important rituals are.
CK: Not only in holding to rituals but constantly pruning the ones that don’t work and adding new ones that work. Both of us look at rituals like religion. It’s that critical. It’s the foundational root cause of most problems but it’s also where the magic occurs and it’s where we’ve spent the most time.
The second thing is tied to “Better me, better you.” We feel a strong sense of being a hypocrite in teaching, sharing, and coaching someone in something that we haven’t tried ourselves and seen success with, which usually means we’ve traversed through failure.
MM: Not willing to be a hypocrite.
CK: Leading by example and especially going into danger first and trying it and learning and then teaching as quickly as possible is something that we share in common.
What are the top pieces of advice that you guys have for other entrepreneurs or business leaders?
CK: One of the biggest lessons I’ve learned — and why I’m even a co-CEO — is if you want to do anything big in life, you can’t do it alone. There’s a formula of “team before mission,” but the two are very interrelated. The greater the strength and size of your team, the greater the mission you can tackle. A one-person team can only do so much.
Also, business schools, in general, teach you that decision-making is a logical thing; analytical, critical skills. But if you look at all the poor decisions ever made by anyone, it’s always on what we call emotional tilt. “I was angry,” “I was sad,” “I was feeling shame.” Ego. So how do you train people to deal with that? One of the bigger discoveries we had, with the help of a guy named Jim Loehr, was that emotions and character traits are pretty much like muscles. If you exercise them, you can actually get stronger. When it comes to character, people will say, “Well, I am who I am. I can’t change.” You’re telling me you can’t become kinder? You can’t become more confident, more humble? With training, you can — but like exercise, if you don’t train, it atrophies. You can actually train these things, and that leads to better decision-making, which makes better leaders, better companies.
MM: There’s another framework and thought that we’ve been coaching our teams on, which is the difference between doers and thinkers, and the need, as an organization is growing, to have more people who are thinking as opposed to doing.
As the business gets more complex, you need more people at the top thinking, and it’s hard to make that shift because usually what happens is the best doers are promoted into more leadership roles where they’re responsible for more thinking, but they struggle because it feels like you’re not doing anything.
We’re trying to solve that now, where we actually set up an environment that helps you block out, let’s say, the hours of 2:00 to 5:00 on Monday afternoon, to set up thinking time, because you need an open-ended window to do that. But that feels so hard for leaders — or for anybody — to do.
CK: One of the key insights on it is that if you are a very good doer and you actually peel back “What is the driver of that?” you’ll see that there is a set of rituals; it’s almost like machine rules that have been written that allow you to be in your norm, your groove, of doing really well.
If you want to raise the bar in being a good thinker, a strategic thinker — planning, making the right decisions and judgments — you first need to start to prune some of your doing rituals, in order to start to add thinking rituals. That is something very hard for people to grasp because they’ll say, “But it’s what made me successful to date.” They’re scared to let that go.
We all have the same number of hours in a day. I always think of it like going to a buffet. Everyone has the same size plate. If you don’t first create some space on the plate...
MM: For vegetables.
CK: You won’t eat vegetables. The same way, if you don’t actually reduce the rituals tied to your doing, you can’t increase and work on rituals to be a thinker.
What is giving both of you hope for the future?
CK: I think we’re sort of in the future now — that you can do good and win big. The days of the bad guys winning — asshole leaders and companies — are numbered. Because talent is the number one asset, and the good people, the talent, aren’t going to go work for leaders who are assholes.
MM: What gives me hope for the future is I believe leadership is a two-person sport, and I think a lot more companies will have co-CEOs, this partnership of men and women that will create a better team. Men tend to skew more confident, women tend to skew more humble, just by gender. To win at the highest levels, more and more organizations are going to need that balance, that team dynamic, the agility to be confident and humble, to be courageous and vulnerable, to be patient. I think you’re going to see a lot more partnerships and teams with men and women, especially at that senior level.