Culture spotlight: Next Jump, the company which never fires anyone for performance reasons
Most companies claim to be reinventing something. But only few truly deserve this label. Next Jump is one of the few.
Their reinvention of company culture and management philosophy has earned them impressive accolades. The US Air Force, the CIA, and big private sector companies are now standing in line to learn from Next Jump how to become a “Deliberately Developmental Organisation” (DDO).
We met them in their London office to speak about a company that places company culture and personal growth above everything else – find out about other London Startups in our blog post.
We were mainly interested in their famous policy of employment for life (i.e. no firing for performance reasons), but it turned out to be only one of many fascinating ways how the company is run.
The uniqueness of Next Jump is obvious from the moment of our arrival. Our visit was kicked off with a culture tour, a 90 minute run through the company’s history and management philosophy given by two current employees. Not many other companies chose to spend time doing this.
We were welcomed by Vicky Cichon, Account Manager and Jasmin Lau, Business Associate, who introduced us to the main Next Jump principles. After the tour, we were joined by Tarun Gidoomal and Kevin McCoy, Co-MDs of the London office, who answered our questions.
Next Jump in brief
Next Jump was founded in 1994 by Charlie Kim. The company’s core business is an employee discount platform, used by over 70% of the Fortune 1000 to help their employees save money. Their other, younger product line consists of various apps and tools to measure and manage employee performance and company culture.
The company has around 200 employees. It is headquartered in New York, and has offices in Boston, San Francisco and London.
Next Jump entered into public consciousness when, in 2016, it was selected by Harvard Business Review to be one of only three DDOs, or Deliberately Developmental Organisations.
A Deliberately Developmental Organisation
DDOs, as defined by the Harvard scholars and authors of An Everyone Culture, are companies that have built their culture to support the development of all their people, every day. At its core is the belief that the way to become a better company is by employees working on themselves, and helping others to grow, in turn. This is crystallised in one of the most important mantras at Next Jump:
Better Me (improve yourself) + Better You (help others with what you learned) = Better Us
So, as the book says, “you could be a revenue-generating god and still be penalised in compensation if you’re not working on personal growth. The biggest bonus and salary increases go to those who improve the culture.”
The biggest bonus and salary increases go to those who improve the culture.
The following pillars are at the heart of Next Jump’s culture and management philosophy.
No HR department
Yes, you read that correctly. A company of 200 people, without a dedicated HR team. Every person has HR-related responsibilities. Employee engagement, payroll and HR policies are all distributed within the entire organisation. The leadership team decides on promotions and pay raises, taking into consideration the data points they see through their (in-house built) Performance Evaluation technology.
This does not mean that Tarun and Kevin recommend to everyone remove their HR department. Kevin says:
Our point of view was that culture should not be outsourced to a particular team to deal with. It should be a shared responsibility within the entire company.
Everyone works half their time on HR and culture, from the salesperson to the software engineer, from customer service to CEO. Of course, this means that specialists are under-utilised - a coder is only coding 50% of the time they could be. The reason this tradeoff makes sense for the company is that by practicing your decision-making on people and culture matters, your other work will become much better and you will make up for the 50% shortfall.
Decision-making is a key skill - accelerate its practice
What does work actually consist of? One way of answering this question is through the lens of planning and executing: First you decide what you will do, and then you do it. The first part, decision-making, is a skill which can be learned and developed. Next Jump believe that the best way to do that is by making many decisions, receiving feedback, learning from mistakes, and making more decisions with these lessons in mind.
But some mistakes can be costly. Trying an untested new sales approach, for example, could lose you a prospect - a very bad outcome. So there is the need to practice decision-making on things that have less potential for disaster. It turns out that HR issues are a great practising ground. If you botch the rollout of, say, a performance evaluation project, it’s not really a big deal. Sure, you may have wasted your and others’ time, but you didn’t break the product and you didn’t impact revenue. Doing the post-mortem, you will spot where in your journey you made the mistake. And that will tell you something about your decision-making and lead to lessons learned.
Next Jump use an analogy from the US Navy. Above the water-line projects will, at worst, make the ship look bad. Below the water-line project failures can be fatal.
(source: Next Jump)
Hire for humility
Next Jump don’t want to be a company of, as they call it, “brilliant jerks”. So their #1 hiring criterion is humility, as they believe that this is the most important predictor of personal growth. Coachability, responsibility, and absence of victim mentality are other key characteristics.
Recruiting for these traits means that it’s hard to fake your way into the company. The stories you tell will reveal who you are.
Feedback is anonymous and open
Started as an internal project, Next Jump has developed apps that are now being offered publicly. For example, in the Feedback app, everyone can give anonymous, public feedback to everyone else.
This is a staggering idea. It can lead to situations where the CEO gives a presentation about the company’s future, and at the end of it, he might see anonymous negative comments. And he knows that everyone else inside the company can see them, too.
Just imagine what that does to transparency and open debate.
True, in most traditional organisations, it could be humiliating to be criticised publicly by your colleagues. And yes, you may have a troll who will badmouth everything you do. But the idea itself is fascinating because it puts the money where many companies’ mouth is: It forces unprecedented levels of accountability. You can’t hide behind vague phrases and empty pep talk anymore. You will get called out because, suddenly, any risk that normally comes with criticising the powerful has been removed.
The app is also inspired by an insight from primary schools: Children are more open towards feedback from classmates than from a teacher or parent. Tarun says that it’s the same with employees: “They are more likely to respond to feedback from their peers than from their manager. And the Feedback app provides an easy way to give candid, peer-to-peer input.”
No Lying, Hiding, Faking
When providing updates, most company cultures lead to people window dressing their results. Next Jump noticed that and changed the question from “What have I done this week?” to “What’s the thing I don’t want you to ask me about?”. Their shorthand for these difficult topics is Eggshells. Focusing status updates on Eggshell topics leads to a more open culture where problems get solved faster.
Kevin mentions the recent example of a junior employee who, in her third week of employment, bravely voiced a sensitive Eggshell: Other employees were showing up late or not at all to candidate interviews she was organising. Her moment of courage was praised, the problem was fixed immediately, and the effect of the event rippled throughout the company: Because the positive comments she received were public, now everyone will feel encouraged to speak up in the future.
Everyone has a buddy
Or, As Next Jump calls it, a Talking Partner. Someone you can bounce ideas off, someone close who can tell you when you’re on the wrong path. You get your Talking Partner from among people who get hired at the same time as you. If you don’t gel with him or her, you can always change.
No firing for performance reasons
Next Jump introduced a No Firing Policy in 2012 – offering a commitment of lifetime employment for their employees – “the ultimate safety at work”, as Tarun says. He goes on to say:
Aside from increasing our hiring standards, this was a signal of intent for employees to show that you can expose vulnerabilities, weaknesses, and faults without the fear of losing your job.
Performance is not binary, i.e. “either we fire you or promote you”. Because Next Jump put so much effort into finding the right talent, they will go to great lengths to support you when you stumble and provide options to help you succeed: Change your Talking Partner, sharpen existing skills or acquire new ones, or find a new role in the company.
If, after several attempts and remedial actions, it’s still not working for either party, Next Jump will help you find another job.
That last point, though, sounds like a gentle nudge out the door, doesn’t it? Are Next Jump being disingenuous here?
It may be true that this “help you find another job” ultimately amounts to unilaterally asking someone to leave. But consider this: If someone tells you that you’re not living up to expectations, but have done your best, and you have plenty other job options - wouldn’t you want to leave? Why would you stay in a situation that doesn’t make you happy either? You will not be hanging on for the sake of a salary, will you? You will leave on your own terms and it won’t be a firing.
Next Jump use the football metaphor of a “bench”: Tarun says “It would be crazy to expect a football coach to have the same team lineup in every game. Yet in business, we somehow believe that the team is static. You have to be more flexible than that.” So when a team member is not performing, he or she can change positions or go on the “bench” and do something else for a while. Their time will come again.
Recognition for the biggest helper
Next Jump have learned that recognising only the people who make the most amount of money for the company leads to a culture of self-centeredness. And so they instituted a policy whereby the biggest bonuses and highest form of recognition (the Avengers Award) go to those people who have helped others the most.
This fosters a culture of teamwork and is the logical next step if you abide by the idea of better me + better you = better us.
Linking culture with business results
Next Jump is a privately held company, but Tarun claims that their sales have increased fivefold to $2.5bn since 2012 when they set culture as their primary business strategy. They have also seen an impact on other metrics like profitability and retention of leadership (which is at 10 years – unusually high for a technology company).
But while everyone we met at Next Jump was smart, passionate, and inspiring, the company’s Glassdoor rating is a disappointing 2.8 out of 5. Tarun comments on this humbly, admitting that whenever you’re striving for something new, you will make mistakes: “We are proud of where they are today. But in reality, what starts off with the best intentions can be messy, and it took many iterations and experiments to make it work. It’s the cost of innovating and experimenting”, he says and adds: “We teach what has worked for us, but we are also very open on what has not worked so that organisations can learn from our mistakes.”
Do try this at home - but be careful
*Want to find out more about startups? Check out our complete HR checklist. *
We left Next Jump’s office inspired. Their ideas and concepts - Eggshells, Accelerated Decision-Making, No Firing and the Bench - are very convincing and had us nodding in recognition throughout the culture tour.
But before you consider implementing some of these ideas yourself, be mindful that these are not tactics that you can just try out for a month or two. For example, in a company that is not used to transparency, starting using the Feedback App in all its brutal honesty could lead to disaster. The company needs to be ready for it, the ground needs to have been prepared.
Next Jump’s concepts are highly interdependent parts of a deliberately cultivated company culture. Besides long term-commitment, you will need to plan very carefully how you introduce them, especially when aspects of your existing company culture are at odds with the principles that underlie NextJump’s philosophy.
But fortunately, Next Jump are very open to share the secret to their success, either on culture tours they organise in their offices, or in the book An Everyone Culture that covers them in great depth.
Find out more resources right here:
- HR for startups
- Early-stage startups: a Revolut story
- HR basics for small businesses
