What does ‘cultural fit’ really mean?

Theoretically, it makes sense: hiring managers want candidates who will be naturally aligned with the company’s mission and values.

Presumably, it’s good for candidates, too — working in a place where you fundamentally don’t fit in is miserable.

But as “cultural fit” becomes a top priority for assessing potential hires — and according to one study, mentioned in the New York Times, more than 80% of hiring managers say it’s their number one concern — a new problem arises: managers aren’t hiring based on company values.

They’re hiring the people they’d most want to grab beers with. And the potential result is a dangerously homogeneous workforce.

It’s not that focusing on cultural fit is necessarily wrong, writes Lauren A. Rivera, associate professor of management and organizations at Northwestern University’s Kellogg School of Management, in a Times op-ed.

“When done carefully, selecting new workers this way can make organizations more productive and profitable,” she says, citing Southwest Airlines (where they look for “willingness to provide a wacky experience”) and Bridgewater Associates (where they seek out candidates who can take criticism) as examples of the system working.

But too often, Rivera’s research suggests, the system isn’t working. She writes:

To judge fit, interviewers commonly relied on chemistry. “The best way I could describe it,” one member of a law firm’s hiring committee told me, “is like if you were on a date. You kind of know when there’s a match.” Many used the “airport test.” As a managing director at an investment bank put it, “Would I want to be stuck in an airport in Minneapolis in a snowstorm with them?”

The problem is that the people you’d most like to be stuck in the Minneapolis airport with aren’t necessarily the best employees — more likely, they’re the employees most like you. She continues:

Discovering shared experiences was one of the most powerful sources of chemistry, but interviewers were primarily interested in new hires whose hobbies, hometowns and biographies matched their own. Bonding over rowing college crew, getting certified in scuba, sipping single-malt Scotches in the Highlands or dining at Michelin-starred restaurants was evidence of fit; sharing a love of teamwork or a passion for pleasing clients was not.

You can see where this is going: not all competitive rowers or single-malt Scotch fans share a demographic profile, but it’s likely that they do. And that, Rivera says, can “keep demographic and cultural diversity low.”

But a too-homogeneous workforce — whether that’s a classic good ole boys club or a bunch of 20-something white dudes in hoodies —  is actually bad for companies. And it’s not “just” a PC issue; it’s a financial one.

Study after study has shown the diverse groups function more effectively.

BloombergBusiness points to a 2009 study that showed companies “with the highest levels of racial diversity” reported an average of 15 times more sales revenue their less diverse competitors. Slate highlights another study that suggested companies with women on their boards perform better. Rivera cites research finding that groups with “out-group newcomers” — new people who don’t belong to the same social network as the existing team —are significantly better at problem solving.

So what should the search for cultural fit look like? In the Times, Rivera suggests a four-pronged approach:

1.  Be clear with potential hires about the organization’s culture
2. Make sure the way you’re defining cultural fit is “closely aligned with business goals” (mutual passion for scuba/whiskey/puppies doesn’t count).
3. Create “formal procedures” for assessing fit, so it’s not all up to the gut feeling of the hiring manager.
4. Limit the amount fit is factored into hiring.

It may be human nature to want to hire people who are like us, but it’s a bias worth overcoming. And take comfort: if you and your new hire are ever stuck in the Minneapolis airport, you can use some of your new earnings to buy a magazine.

This article is published in collaboration with Business Insider. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Rachel Sugar is a careers reporter for Business Insider.

Image: Unemployed Belgian Mohamed Sammar (R) answers questions during a simulated job interview, which is recorded to help him get feedback afterwards in Brussels July 2, 2013. REUTERS/Francois Lenoir.