Companies are often ready to pay top dollar for the best and the brightest employees. But what happens when a talented candidate isn’t a fit with a company’s culture?
The best way forward is to say no to them – even if those decisions are extremely difficult to make, according to the co-founder of Southeast Asian start-up Grab.
Grab started five years ago in Malaysia as a local version of ride-sharing giant Uber. Since then, the company carved out its target market in 132 cities across Southeast Asia. It is considered to be one of the biggest start-ups in the region and according to CB Insights, Grab’s latest valuation stands at $6 billion.
Today the company provides private car, motorbike, taxi, carpooling and other ride-hailing services. Last year, it moved into payments and earlier this month, Grab expanded that service in Singapore.
Grab co-founder Tan Hooi Ling shared with CNBC what she learned in the five years she spent helping to build the start-up from scratch.
The most important lesson Tan learned is to hire people who fit well with the company’s culture and values, even if that means turning down other talented potential candidates.
HIRING THE RIGHT PEOPLE
Start-ups frequently struggle to compete for talent with big corporations that have more money to woo the best and the brightest in the workforce.
Having the right people can make or break a start-up.
“It is the only reason why we are where we are today,” she said. “Because to be frank and honest, (Grab co-founder Anthony Tan) and I … are often times not the smartest people in the room, and we love that.”
Which is why turning down a talented potential hire who is not a good fit for the company’s culture can be difficult.
Tan said when she and Anthony Tan interview people, they come across potential candidates who could add a lot to Grab – but if they are not going to be a good cultural fit, the co-founders usually turn them down.
“Saying no to them is some of the most painful things,” she said. “Saying no is actually much more difficult than saying yes.” But, Tan added, she learned the hard way that it’s better to let people who don’t fit in with company’s culture go sooner rather than later.
Corporate culture has been an important topic of discussion this year amid news of sexual harassment allegations and workplace discrimination emerging out of Silicon Valley. Grab’s rival Uber, for example, suffered a blow to its image and culture following sexual harassment allegations and leadership changes.
That led Uber board member Arianna Huffington to say that corporate culture is “a company’s immune system.”
While hiring the right people can go a long way to growing a business, having the right priorities is also important, according to Tan. That can guide small start-ups to plan better for growth and for bigger companies to figure out how they’re going to stay ahead of the curve in the future with whatever resources they have.
“It’s about first having impact and executing something well before you move on the next thing,” Tan said. But it is a delicate balance, according to Tan, because “if you’re too focused, you’ll stop innovating. But if you’re too innovative, you’ll lose your focus and won’t get anything done.”
Prioritizing for Grab means deciding whether to roll out a new service in a single country first or in seven countries simultaneously, Tan said. It also means deciding whether to expand Grab’s operations beyond Southeast Asia into bigger markets such as China and India – a question that Tan and her co-founder get asked a lot. Grab has always maintained that it has no plans to move beyond Southeast Asia.
“We’re barely scratching the surface in terms of what we think our true potential value could be to everyone here,” Tan said, referring to Southeast Asia.
LEARNING FROM MISTAKES
To stand out from the competition, start-ups often need to take risks, which could sometimes prove to be costly. As a result, many entrepreneurs may prefer to play it safe. But Tan said that the “only way to continue succeeding is to continue making mistakes and learning” from them.
During Grab’s early days, Tan said she paid for making mistakes when trying to do things differently. But those instance of failures let her learn and make better decisions subsequently, she said.
For example, when Grab first launched its services, Tan said she assumed demand would be lukewarm because the company still needed to market itself to potential drivers and passengers.
“Guess what? The first day of our launch, already our old technology platform was under a lot of stress because a lot more people were using it than we expected to, because they saw immediate value,” Tan said.
In building one of Southeast Asia’s most prominent start-ups, Tan said being humble was also “incredibly important” to her personally – and something she looks for in the leadership bench at the company.
“Without humility, you will stop acknowledging the need to learn, you will stop acknowledging the need to hire the best people, and the need to continuously disrupt yourself,” she added.
Earlier this year, Grab registered its one billionth ride transaction. Tan said that the company is now profitable in some of its more developed markets and services, but she did not disclose specifics. But she said in areas such as “payments,” the company is “actively, heavily investing.”