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Business
The Economist July 9th 2022
terms of their markets and their vc sup port. Because Europe’s domestic markets and talent pools are limited, fi rms quickly expand abroad. Veriff , an Estonian online identifi cation service, recently opened a site in Barcelona because it could not hire enough engineers in Tallinn. As a result, about 80% of European tech companies have an international pres ence, compared with 61% of fi rms based in Silicon Valley, according to Atomico. Only one in fi ve European fi rms has an offi ce in its home territory alone and just over half are present in three or more countries. In
Silicon Valley the ratio is reversed. In a cri sis, such diversifi cation is a boon. Europe’s thematic unicorn mix may also help. According to the classifi cation used by Credit Suisse, recessionprone businesses such as consumer services are less prevalent than in America. A third of European unicorns operate in fi ntech, of ten providing payment services to other fi rms, thanks to the eu’s more open fi nan cial regulations. Nearly a quarter of uni corns, the bank estimates, could be put in the bucket labelled “sustainability”—a type of business that is likely to benefi t as
the world gets more serious about fi ghting climate change. All this helps explain why the number of unicorns has risen in Europe this year. PitchBook counted another 42 in the fi rst six months, compared with 37 created in the same period in 2021. The coming quar ters are certain to be tougher. But so are Europe’s tech companies. Platform.sh re cently managed to raise $140m (the valua tion was not disclosed, but is approaching unicorn territory). And that means Mr Plais, its boss, is unlikely to have to go job hunting again soon. n
Bartleby How to read corporate culture Outsiders have more ways to understand what firms are really like
C
ulture eats strategy for breakfast, runs the aphorism. It also projectile vomits employees who don’t fi t in. In a survey conducted earlier this year by Flexjobs, an employment site, culture was the most common reason people gave for quitting. And it matters more than high wages. A study published last year by Jason Sockin of the University of Pennsylvania found that workers rated things like respectfulness, worklife balance and morale as more important to job satisfaction than pay. The problem is that culture can be very hard to fathom from the outside. It resides in quotidian interactions be tween colleagues and in the hidden threads that bind decisions on every thing from promotions to product devel opment. You need to be inside an organi sation to really understand it. But more sunlight is getting in. Firms are doing more to signal what they stand for. Job seekers have new ways to peer inside fi rms. So do investors, who share their interest in evaluating corporate culture. Offi ces are places where culture can be transmitted osmotically. Now that more workers are remote, fi rms increas ingly write down their values. Qualtrics, a software fi rm, may not believe in gram mar but it does believe in Transparent, All in, Customer obsessed, One team and Scrappy. Justworks, an hr technology fi rm, subscribes to Camaraderie, Open ness, Grit, Integrity and Simplicity. Lists like these can turn blandness into an art form, and are overly determined by what will create an acronym. They may not refl ect what actually happens inside the company. Plenty of fi rms are charac terised by Cluelessness, Rancour, Ama teurism, Skiving and Stupidity, but you won’t fi nd that on the website. But companies that codify their val
ues are at least thinking about them. And their choices can off er meaningful clues. Kraken, a cryptocurrency exchange, sets out its beliefs in ten “Tentaclemand ments”. You need to see only that one word to know whether this is the work place for you or whether you would rather be hurled into an active volcano. Updates can also be instructive. In “ReCulturing”, a new book, Melissa Daim ler lays out some of the changes that Dara Khosrowshahi made when he became ceo of Uber in 2017. The values of the previous regime, which included “Superpumped” and “Always be Hustlin’”, were overhauled for something a little less hormonal. The change from “Meritocracy and toestep ping” to “We value ideas over hierarchy” told people something useful about the aspirations of the new leadership team. Culture is increasingly readable in other ways, too. Since the pandemic, fi rms’ policies on remote working have given outsiders greater clarity on how employers view issues like worklife balance. Under increasing pressure from employees to take stances, companies are
likelier to off er opinions on political and social issues. Others go the other way: Coinbase, another crypto fi rm, has made it clear that it won’t tolerate employee activism on subjects unrelated to its core mission. That’s information, too. Windows on cultural norms are being opened by regulators, who are pushing for greater disclosure about fi rms’ work forces. Candidates seem to value this kind of information: a working paper published earlier this year by Jung Ho Choi of Stanford Graduate School of Business and his coauthors found that clickthrough rates for job postings rose for fi rms with higher diversity scores. The behaviour of ceos used to be directly visible only to a limited number of people. Now bosses are everywhere, tweeting, posting and making stilted videos. In a recent survey by Brunswick Group, a pr fi rm, 82% of respondents said they would research the boss’s so cialmedia accounts if they were consi dering joining a new fi rm. Even earnings calls off er insights. Academics at Colum bia Business School and Harvard Busi ness School have found that managers who invite colleagues to respond to analysts’ questions on these calls are more likely to work in fi rms that have more cohesive leadership teams. Employeereview sites like Glassdoor are another source of insight. These sites can be distorted by embittered exwork ers. But, says Kevin Oakes of the Institute for Corporate Productivity, a research outfi t, they are also likely to contain “slivers of truth”. And all these slivers add up. There is no substitute for being at a fi rm day in, day out, if you want to understand what it is really like. But the outlines of corporate culture are more discernible than ever. That ought to lead to fewer cases of indigestion.
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