Lubo Smid (STRV): How I shared CZK 20 million with our employees

In this episode of the CEO na ostří nože podcast, we talk to Lubo Smid, CEO of the technology company STRV, which builds digital products mainly for US clients. The company has been around for eighteen years, has grown almost every year and now has around two hundred people. Smid joined around 2011, when it had a single principle: find people you’ll enjoy spending time with.

STRV doesn’t have values; it has principles. They came out of discussions with a large part of the team a few years ago about why people stay at the company. The first is “Strive for more”, which also gave the company its name: never be satisfied and keep moving forward. The second is “Self-reflection over ego”, because anyone who can’t keep their ego in check won’t get far in a company without office politics. Others include continuous learning and sharing knowledge, “Caring with an open mind”, meaning looking at problems from different angles, and “Filtering out the bullshit”. The industry, Smid says, can be “a bit bullshitty”, so STRV refuses to sugar-coat things for clients. “We’d rather lose the business if it doesn’t feel right. And that happens all the time,” he says. Relationships built on honesty, he believes, end up much deeper.

Smid defines company culture as the average behaviour of the people on the team. It changes with who you bring in and who you let go. That’s why he doesn’t believe in rules pinned to a noticeboard, no matter who writes them. Culture has to build up gradually, which is why companies that grow too fast struggle to keep one. The final round of hiring is no longer about technical skills, only about whether the person fits the team. Roughly one in ten candidates is vetoed at that stage. Parting ways with someone over culture, Smid says, is one of the hardest things to do. With performance, there are facts and numbers; with culture, it’s a feeling the manager has to assess and stand behind. He also knows how a culture can split. When a key leader in the US wasn’t aligned with leadership in Prague, two cultures emerged within the company. Smid had to fix that, because a company needs one global culture with the same principles for people in California and in Prague.

When STRV had its first year of really strong results, Smid shared more than CZK 20 million with employees without having promised anything in advance. “STRV’s success is everyone’s success,” he says, admitting he had tears in his eyes when he announced it. He spent the whole year working out the mechanics with colleagues. The split took into account salary, length of service and leadership roles, so not everyone got the same amount. The company shared the formula with everyone, even though salaries at STRV aren’t public. He says there was no negative feedback, because nothing had been promised and people saw the reward as a gesture. He’s also open that it won’t happen again this year. It’s a tougher year, and the company doesn’t want to boost profit by making drastic cuts to the team.

What else will you learn in the podcast?

• Why STRV has principles instead of company values

• Why company culture is the average behaviour of the people on the team

• Why the company would rather lose business than sugar-coat reality for clients

• Why letting someone go over culture is harder than over performance

• How to stop a culture from splitting between Prague and the US

• What formula to use to share CZK 20 million among employees

According to Lubo Smid, there’s no single key to a company’s success. It’s a thousand small decisions that have to fit together. A leader’s job is to know what the priority is at any given moment in that tangle and to communicate it clearly to everyone else.