The light-bulb moment drove him to quit his job and dive into research about how a company’s culture affects its bottom line.
Along the way he met Tim Wolters, who was following a similar interest and had a background in data analytics. Then, they met Natalie Baumgartner, who was consulting with top executives about how to align people with culture.
“Boulder is a cauldron of entrepreneurship. It’s a rich ecosystem for startups,” Wolters said. “We got extremely lucky to meet each other.”
In May 2009, the trio launched RoundPegg Inc., a company that helps organizations hire, develop and engage employees in alignment with their desired culture. The objectives are met by starting with a five-minute survey that reveals conflicted values, subcultures and core values.
RoundPegg’s software then leads recruiters and managers through steps that align employees with company cultural values.
By measuring, managing and monitoring a company’s culture, RoundPegg gives an edge to better hiring, employee development and employee engagement.
One of the carrots for using RoundPegg is the statistic that says strong, well-aligned cultures are six times more successful than their competitors.
RoundPegg starts with having employees take a survey that brings their work values to the surface. How they match the values of co-workers helps determine what tools, or behaviors, would help them align more.
Values include characteristics and preferences for things such as risk-taking, organization, supportiveness and professional growth.
“Values are hard wired once we’re adults, and they predict our behavior,” said Baumgartner, RoundPegg’s psychologist. Looking at a person’s nine most important values and nine least important give a broad picture of how that person will behave in the work setting.
“If someone doesn’t value opportunities for growth, for example, they get ways to interact with others without stepping on any toes,” she said, referring to how RoundPegg’s web-based tools and culture alignment applications drive business performance.
“It all starts with data collection to create action-oriented guides,” Daily said.
He used the example of looking at hiring someone who likes to keep information close to the chest in an organization that values transparency and sharing information.
“The guide says what questions to ask to see if hiring would be a risk,” he said, “and the software give ideas for both parties to bridge the gap.”
One idea in this scenario was that, prior to sharing information that came from this new hire with the group, it would be good to talk with him first — saying what will be shared and why it’s being shared.
“This way he won’t be blindsided and feel his values are being violated.”
In addition to helping with hiring and sidestepping conflicts, RoundPegg’s solution helps managers tailor their coaching to fit employee needs according to their specific values.
RoundPegg offers two models. “Baseline measures core values, what values are in conflict and how well aligned they are,” Daily said. The recurring model gives access to the entire suite of RoundPegg’s culture products, allowing a company to hire, develop and engage employees according to its culture.
The baseline model, a one-time measure, starts at $5,000 for a small company. The recurring model starts at $18,000 annually.
RoundPegg started out with $3 million in venture capital. “We’ve grown about 130 percent year over year, and this year we’re raising a round of capital to put into sales and marketing,” Daily said. “We’re looking for $4 million.”
He expects the company’s revenue growth for 2013 to be 300 percent.
RoundPegg retains 11 employees including the founders and one contractor at its Boulder location. The company has worked with about 45 clients to date.
“We’re wanting to own the culture space and be the software company that does that,” Wolters said. “There’s a gap in that area, and we want to fill it.”