The Ultimate Guide to Building a Magnetic Company Culture in Startups (1/2)

Turn your startup into a talent magnet. Discover how magnetic culture drives ROI, retention, and growth — backed by real metrics.

What Is This About?

The ultimate guide to building a magnetic company culture in startups covers the foundational elements that attract and retain top talent. Part 1 of this interview with Christian Conrad explores why culture is a strategic asset — not just a nice-to-have — for growing companies.

Introduction

Company culture is either your strongest competitive moat or your biggest hidden liability — and most founders leave it to chance. This ultimate guide provides a structured approach to building magnetic company culture that attracts top talent, retains key employees, and creates the organizational resilience needed to survive the inevitable crises every startup faces during scaling.

Building a magnetic company culture that attracts top talent and retains key employees requires treating culture as a system rather than a set of values posted on a wall. The guide covers the four pillars of magnetic culture: authentic identity, consistent experience, growth architecture, and community belonging. Companies with strong cultures experience 30-50% lower turnover and can recruit at compensation levels 10-15% below market rate because of the non-monetary value they offer. The implementation framework works for companies from 5 to 500 employees.

Turn your startup into a talent magnet. Startuprad.io brings you independent coverage of the key developments shaping the startup and venture capital landscape across Germany, Austria, and Switzerland.

This founder interview is part of our ongoing coverage of Scaleup Founder Interviews from Germany, Austria, and Switzerland.

Management Summary

In today’s competitive startup ecosystem, company culture isn’t a soft perk—it’s a strategic growth lever. This guide is for startup founders, executives, and investors looking to attract top talent, increase employee engagement, and build resilient teams. Based on an exclusive interview with Christian Conrad—author of Magnetic Company Culture—this blog reveals practical, measurable frameworks that turn workplace culture into a startup's secret weapon (Christian Conrad's Book).

🚀 Meet Our Sponsor Tide.co

Managing finances as a freelancer or small business owner can be overwhelming – but it doesn’t have to be. 

With Tide’s free business account, you get everything you need in one place: send invoices, track expenses, and handle taxes with smart tools built to save you time and stress. Plus, when you sign up with the code STARTUPRADIO, you’ll get €200 cashback after spending €500 as a sole trader, or €400 after €1,000 as a registered business. 

Don’t miss out – sign up now at tide.co/Podcastsde  – use code STARTUPRADIO

What Is a Magnetic Company Culture?

A magnetic company culture draws in top talent and retains them through purpose, emotional connectedness, and everyday engagement. Christian Conrad defines it as the deliberate cultivation of values, behaviors, and systems that make employees proud to recommend their workplace to others.

Featured Snippet Answer:

A magnetic company culture is a work environment that attracts and retains talent by fostering emotional engagement, trust-based leadership, and purpose-driven performance. It can be measured through metrics like eNPS (Employee Net Promoter Score).

Why Culture Beats Strategy (and Metrics Prove It)

As Peter Drucker famously quipped, "Culture eats strategy for breakfast." Conrad backs this up with metrics. In one client case, the eNPS jumped from 6 to 40 in just 18 months—transforming both talent retention and productivity.

How do you measure the ROI of company culture?

• eNPS: Ask "How likely are you to recommend this company as a workplace?"

• Turnover rates: Decline signals better retention.

• Engagement scores: Improved collaboration and innovation.

What Are Engagement Boosters?

Christian uses "Engagement Boosters" as core habits that improve company culture daily. These include:

• Connective Listening

• Positive Reinforcement

• Feedforward instead of Feedback

What is Feedforward and how is it different from Feedback?

Feedforward is future-oriented advice that helps improve outcomes without assigning blame. Unlike traditional feedback, it encourages growth and proactive behavior.

How Trust-Based Leadership Drives Results

Trust-based leadership begins with the principle: trust 100% until broken. In Conrad's experience, this fosters intrinsic motivation, innovation, and emotional loyalty.

Can soft skills really impact business outcomes?

Absolutely. Christian describes how teams with high trust outperform those led by fear. The measurable outcomes include higher initiative, better execution, and stronger employee advocacy.

How to Start Transforming Your Culture Today

Christian suggests a three-step blueprint:

1. Do quick eNPS interviews with 10 people.

2. Evaluate answers and prioritize 3 actionable improvements.

3. Build habits like connective listening and reinforcement.

What tools support this transformation?

Conrad uses an AI-powered app to track leadership habits and behavior change. It supports long-term culture work, not one-off training.

People Also Ask

How can startup founders improve company culture?

Start with employee input, act on small improvements quarterly, and reinforce positive behaviors daily.

What makes a company culture scalable?

Clear values, repeatable habits, and measurable outcomes like eNPS make culture scalable as teams grow.

What role does leadership play in company culture?

Leadership sets the tone. Culture transformation starts at the top and flows through trust-based behaviors.

How does company culture attract talent?

Candidates choose employers based on purpose, flexibility, and reputation. A strong culture turns employees into brand ambassadors.

More in Our Other Blog Posts

• Startup Employee Burnout Prevention

• Trust-Based Leadership in Action

• 3 Engagement Boosters for Startups

Automated Transcript

Music:

Speaker1: Hello and welcome, everybody. This is Joe from StartupRate.io, your authority on startups from Germany, Austria, and Switzerland, also known as the DACH region. Today, we're diving deep into why company culture might be your biggest growth level or your greatest hidden cost. My guest is someone who has dedicated his career to building what he calls magic cultures. Welcome, Christian Konrad.

Speaker0: Hi, Jan. Lovely to be here.

Speaker1: Totally. My pleasure. And we're both smiling because we're going to introduce our audience to a very simple German word. It's called Fachkräftemangel.

Speaker0: Yeah, my Australian coach, Carl, always, you know, when we talk about that, he says, could you repeat that, please? That's such a beautiful word. It's impossible to pronounce for me. Fachkräftemangel. It's basically skilled labor shortage. But in German, we have that possibility to build words as we please and make them as long as we like.

Speaker1: Exactly. There are other famous German words, but we are sticking today with Fachkräftemangel. Taking a quick bio from you, you have been the former marketing director at Kellogg's, not only marketing series, I do believe, for the DACH region. You have been formally with Unilever, also a food company behind a lot of brands for cooking. Ice comes to mind and a lot of other stuff. You are the founder of Engagement Booster. You are the author, attention again, Magnetische Unternehmenskultur, meaning the book is called Magnetic Company Culture. And you're on a mission to help 1 million employees to smile by 2035. Guys, if you're struggling with retention, recruiting, or employment motivation, stick around. This episode will give you a practical framework you can apply today. So let's set the stage. Why does culture matter? What I always have in mind is that culture eats strategy for breakfast. I don't remember who did this famous saying,

Speaker0: But yeah, exactly.

Speaker1: That is always been sticking to my mind and such a lot of people are talking about company culture. I had a former employee of PayPal, Michelle here, she also talked about company culture. And I vividly remember we both talked about if you first hire people, take away their parking spots and then start talking about company culture, you completely misunderstood something. So Christian, your vision is 1 million more smiling employees by 2035. What does that look in practice, and how did this mission begin?

Speaker0: We actually measure it. We measure those smiling people because I define them as people who no longer are just okay with the place they're working at, the place of employment, but they're actually really happy or highly engaged. So, the difference between being enthusiastic and being just content is the key thing. That's why they're smiling. And what we're using is the Net Promoter Score system. So, we measure the Net Promoter Score for employees. And that gives you exactly that distinction.

Speaker1: There is a Net Promoter Score for almost everything. Can you tell us about Net Promoter Score and why do you think it is useful?

Speaker0: I think it's useful because it's simple. That's the first thing. And the other reason why I think it's useful is that it reframes the relationship between employee and employer. Basically, what you reframe is that you say that the employee is the customer for the product workplace. And you basically measure customer satisfaction.

Speaker1: And a lot of people have actually done such a survey for customer net promoter score. How likely is it you recommend the product? One, very unlikely and 10, always. That's basically it.

Speaker0: That's basically it. So it's the most simple but yet extremely powerful way of measuring employee satisfaction, which I think satisfaction is actually not what you want. you want excitement or engagement. And the people who are merely satisfied are usually on the 10 point scale are the seven and eights, you know, the, the ones that, that respond, how happy, how likely is it that you will recommend your, your employer to others, family and friends to others. And they say seven and eight and quite a lot of people say, well, that's okay. And that's exactly the problem. That's okay. and that doesn't mean you're a smiling person. Smiling faces are those people, or smiling people are those people who turn from being below 9 or 10 to a 9 or a 10.

Speaker1: I see. So, 1 million smiling employees. When did you start and how far have you gotten?

Speaker0: We started two years ago with the first client who ran the whole program, the engagement producer program. And so far, it seems like we haven't come very far, but we have actually run the proof of concept. We stand at 65.

Speaker1: 65 smiling employees.

Speaker0: Yes. So, yeah, it's minimum viable product, product testing, and now comes the time when we build the machine because we want more smiling faces. And that means also more smiling employers because it's extremely high correlation with productivity and other economic factors.

Speaker1: Okay, that means for including this year, you have to put a smile on around 100,000 employees per year. And I assume it will go like a little bit more fewer this year, and then getting on and on and on.

Speaker0: Yeah, we're planning to sort of start scaling, fully scaling in about three years. So that's when it takes off.

Speaker1: I see. Let's get back to our favorite word. You've argued that Fachkräftemangel is often self-inflicted. What's behind this provocation?

Speaker0: Well, I think that a lot of companies, because they don't invest enough into the relationships they have with their employees, have the problem of a lack of skilled labor, of Fachkräftemangel, they're actually to blame themselves. You know, it doesn't happen by itself, you know? It's like, I don't know who said that, but if you say that, if you liken a really competitive corporate culture with climbing a high mountain. Then, you know, if you see someone on top of a mountain, you can be fairly sure they didn't fall there. So it doesn't happen automatically. You need to climb the mountain. So it usually requires a transformation. It requires investment of time and resources. And you don't get there. It's as unlikely to just happen to have a strong brand, which also everybody would say, okay, yeah, I agree that doesn't happen automatically. It takes three to five years to build a strong brand with a lot of investment and dedication.

Speaker0: And the same goes for a strong corporate culture that has a high engagement level.

Speaker1: We're talking mostly because that's a main concern of our main audience. Fachkräfte, meaning qualified employees, for example, doing marketing, most of the time doing coding or engineers and so on and so forth, highly qualified people. I was wondering when I was thinking about that, how high does it apply? So how high can you really put that in terms of level? Because most people who would be subject to this magnetic company culture would be on the employee level. But basically, you have to scale it all the way up the ladder up to the top management, right?

Speaker0: Yes, that's why you – I mean, if you run a transformation program, my belief is you always have to go top down, whatever you want to transform. And in this case, you want to increase the emotional connectedness people feel with their employer, i.e. engagement. You know, that's my translation of engagement, emotional connectedness. And if you want to transform that within the organization, you have to start top-down. So I always start with C-level.

Speaker1: Okay, we are already in your framework. Let's define your core framework. What makes a company culture truly magnetic?

Speaker0: For me, the key factor is actually what the Gallup Institute, the American Research Institute Gallup calls engagement, and I translate as meaning emotional connectedness. If you have a high emotional connectedness with your employer, you have a magnetic culture. So the majority of people have a high likelihood to actually recommend their place of employment to others. That is the highest level.

Speaker1: And many people do confuse company culture, having a good company culture with having a fancy office. Can you try to differentiate between having a fancy office and having a fancy or magnetic company culture?

Speaker0: I mean, I would say that having an office where people like to go to, whether it's fancy or not, you know, you can debate whether the fanciness actually makes people want to go there. I think that a shoddy office actually is a disincentive for people to go to the office. So if people, if companies complain that people are working from home too much, they need to make it attractive to get to the office. I think that having an office where people like to go to is very important because that's where they meet. That's where they connect. That's where they interact. I know you can feel connected when you work remotely, but a lot of companies post-COVID have actually realized that you need to be together at times, particularly when you work creatively and as a team.

Speaker1: Does your framework therefore also or only partially apply to fully remote companies?

Speaker0: I would say it applies to all companies because what it does, it works with what is, right? I mean, whatever your setup is, and if you measure how connected people are, that's where you will get some responses as to how you can improve it. And if people say, you know, because when you ask the question, how likely is it that you recommend the employer, you get a figure. So that's descriptive. All the people are asked a second question, which is, if you're a 9 and 10, what did we actually do? What actually caused you to give us a 9 or a 10? And then you get an open-ended question and people can write whatever it is that they love about the company.

Speaker1: And one of those things you do to get your employee to 9 or 10 on a net promoter score is what you also call engagement boosters. What is it? Can you walk us through and why it's so deceptively effective?

Speaker0: Yes. I mean, what, what, what, what I've spent a lot of time, I, I would say that I've been thinking about company culture from since I finished university. Um, the first time I ever got, got in a context with, with, with corporate culture, I was still at university because I wrote an essay on corporate culture, marketing strategy to corporate success because I wanted to win an internship with Lufthansa in New York. That was one of the prizes. Yeah.

Speaker1: Did you get it?

Speaker0: And I got it, yeah. And that set me up for marketing because I'd never studied any marketing. So actually, that's corporate culture. That's where he started. And I got to know corporate culture and worked as a consultant for many years. And now since 10 years, I've dedicated my life to working on culture and coaching leadership topics. So that's the background story. Um, but my engagement booster program base is based on, um, the, the assumption that there are always lead measures that have an over proportionate influence on whatever you, the goal you want to achieve. And the big audacious goal that we want to achieve is we want to move that fairly fluffy sounding engagement, which isn't that, which isn't fluffy at all, you know, but it's, it's like a big rock and we want to move it and what are what are key levers and those levers are behaviors that you can display daily or weekly

Speaker0: so something that you can do or whoever you are in the organization any day of the week, That's a lever.

Speaker1: Can you give us an example of such engagement boosters?

Speaker0: I have identified three, and I wouldn't say they're the only ones, but they have an over-proportionate influence on engagement. The first one I call connective listening. So that's listening with the intent to strengthen the connection. Like if I'm listening to you, not with the intent to reply, but actually with building a connection, something changes. Now, we're in an interview, so, you know, it's not necessarily, you know, we will create a connection through the interview if we also listen to each other. Um, but it's a mindset and then it's also a practice and the, the economic benefit of that is first and foremost, that you reduce, reduce the number of misunderstandings that happen. And one of the big, you know, big bad things that happen in organizations that negatively influences the feeling of emotional connectedness are misunderstandings. And it's also the biggest productivity killer. So the other thing that happens, it builds trust.

Speaker0: So on one hand, you have a very economic impact. You reduce misunderstandings and you increase productivity automatically. If everybody stops interrupting each other and people start listening to each other, really making sure they understand and they build a connectedness among each other, that productivity increases and trust increases as well. Because if you kind of put yourself in a situation where you're in conversation with someone and you realize someone is actually truly listening to me and seeking to understand me, you will open up. Thank you. And wherever trust is high, speed of execution goes up and transaction costs go down.

Speaker1: I like that idea for multiple reasons, because my next question, we'll soon get to that, is talking about emotional connections that also disqualifies. If you can measure that, if you're really serious about that, that can basically help reduce the number of bad bosses if you're not just looking at financial KPIs, which is something I really, really like. And going to my next question, the emotional connection is now a new business KPI. How can companies start measuring that?

Speaker0: Well, the simplest way that I know of is measuring net promoter score. So you measure the employee net promoter score by asking that very simple question. You can either do it yourself or you can have someone like me do it for you, which increases the likelihood if you do it externally that people will be honest about their responses. So you can do it internally, yes, but if you want to have really honest responses, you usually outsource this because then you have... The less likelihood that people would think if I am really honest about what's wrong here and what needs to change, I will not suffer any consequences. But that's what you can do. You know, you can, you can, you can measure that. You can ask that question. You could, there are other methodologies that you can use. Um, there's a Gallup engagement index. You can, you can enlist Gallup. That's 12 questions. So-called Q12.

Speaker0: That's another way of doing it. So there is a number of different ways of measuring that, But I love it if you measure it, because what you can measure, you can manage. What you can't measure, you can't manage.

Speaker1: Exactly. The thing is, I was thinking at one point, because you have an MVP, but at one point down the road, this KPI would also influence and show up in other KPIs that you then usually measure. For example, what comes to mind is employee turnover. Absolutely.

Speaker0: Sick leave, productivity.

Speaker1: What's one cultural shift you've seen transforming hiring or retention metrics overnight?

Speaker0: One of the clients that I've been working with, they report that the quality and numbers of their employees, of their, of their, um, of people that have their applicants have significantly increased within less than a year since they ran the engagement booster program, which isn't surprising to me, you know, because, because what it does, it actually, changes the way that people work with each other and that in today's world, fast-moving world, translates into social media buzz and very clearly things like Glassdoor or Canuna Ratings.

Speaker1: We said that more applications, in the back of my mind, they just started a small Joe jumping up and down with the sign Fachkräftemangel.

Speaker0: Exactly. And for that company, that's hugely important because they're growing at a double-digit So that is not something that's not a small thing, you know, if you are desperately looking for highly qualified staff to fuel your growth, if you can't get them, you get what I call non turnover. You know, you get a lack of growth simply because you can't staff your projects.

Speaker1: Yeah. I'm always curious about the experiences of our audience. So I was wondering, guys, what's the smallest cultural habit that make a big difference in your company? Share it with us on LinkedIn or tag us at xbluesky or threads at Startup Radio. Christian, let's do a deep dive leadership, trust, and culture design. You speak about leading with love instead of fear. What does it mean in the boardroom? Just to be sure nobody heard this wrong. I said boardroom, you dirty minds.

Speaker0: Well, I think, I think it's a choice that every leader has, how do you want to lead? So if you, if we, we contrast the two, two, two paradigms, then leading with love would be seeing the person, um, as well as the financial KPIs and figures and leading with fear usually means seeing less the person, but just using people to achieve your means, which is a huge difference. Right? Um, and if you lead with love, it doesn't mean that you are fluffy or soft. It means that you are respectful, firm, have clear, have a clear vision, but people actually are a huge decisive factor in your, in your, in the way that you manage and lead. If you lead with fear, people are usually not really a big factor. You, I've heard people say that it doesn't really matter who we have. Anybody can be substituted.

Speaker0: So we use people, throw them away, and get new ones. And in a situation where you have Fachkräftemangel, that is something that you need very deep pockets to be able to afford. So I think it's a hugely, it's a highly economic business figure or related paradigm shift that you will see in the bottom line. If you move from a management by fear to a management by love, love sounds so fluffy, but love just means that people actually play a huge role. What does it mean? It means that you. In very economic terms, it means that you put people away from the P&L into the balance sheet. You get the point? You know, human resources are not in the balance sheet, which is why they're treated as costs. So they're treated worse than machines that are actually in the balance sheet, and that are written off. So you need to reinvest continuously in your machinery

Speaker0: equipment, and your technical equipment, because it needs to be renewed. So if you make that kind of change in thinking, you're actually moving towards the love side, away from the fear side. I mean, nobody would beat their machine up, would they, literally or figuratively?

Speaker1: Actually, what always comes to mind is the typical Machiavelli misquote, it's better to be feared than to be loved. Actually, he said you need both, but if you can have only one, it's better to be feared than to be loved. So you need both guys. More love in the boardroom, you dirty minds.

Speaker0: I mean, that's why this is provocative, and I would like to take away all the red hearts from that. But I think it is more, and I would sort of disagree with Machiavelli, you need respect. But what you want as any kind of type of leader is you want to be able to tap into the full resources of all the people that you work with. And that is something that you can't force. So if you want someone to go the extra mile, if you want someone to give you 120% or 150% of their time and energy, they will have to give that by their free will. Otherwise, they won't give it long term. They will do it for some time if it's purely transactional, and then they will leave for somewhere where they get paid more. They become mercenaries. There is no relationship. It's purely transactional. And that's,

Speaker0: you know, when you have high engagement, it's no longer purely transactional. It's relational.

Speaker1: You also talk about feed forward. Why is it more powerful than feedback in today's work culture?

Speaker0: I would say you need both. You know, I'm not at all against feedback. Feed forward is much lighter and it is forward looking. It is future driven. It is linked to potential. It's linked to growth and development. And that's why it is a hugely valuable complement to feedback. It is also easier to give. It's easier to implement than feedback. Feedback, you can do so many things wrong in feedback. So you really need to learn it. You need to teach your people. You need to train your people to give proper feedback that is useful and helpful and it builds performance. Feed Forward will always do that. Feed forward will help you build performance, will help you instill a paradigm of excellence in your organization. It will improve solution focus and solution capabilities. So there's a lot of, um, a lot of great, um, benefits of feed forward.

Speaker1: Mm-hmm. How do you help companies diagnose their culture in a way that's objective and not fluffy? I assume you first do a net promoter score and then?

Speaker0: Well, then what that enables you to do is to actually get a status of this is where we are. And the good thing about net promoter score is that you can actually benchmark yourself against others. So you know where you are in relationship perhaps to similar companies that you want to compare yourself with. And that means that you have a baseline that you can then formulate objectives against. So that's the first thing that we do. When we look at the results from the survey, the next step is to say, where do we want to go? Where do we want to be in six months, 12 months, 18 months, 24 months? We don't have to look any further. We could say, okay, what's our five-year vision? That's possible. But then I would be very operative. I would say, okay, let's look at the next 12 months. What do we want to achieve and how do we get there?

Speaker0: And then we define measures how to get there based on the responses that we get.

Speaker1: Let me talk a little bit around my next question. And it's about the hidden cost of disengagement that most companies underestimate. So basically, if you do that thoroughly and well, get people more engaged, you will see KPIs going up. But what is the downside when you don't have engaged people? You can say basically all KPIs are going down, but do you have some experience of your limited experiments that you did? Which KPIs are going to improve by rule of thumb or something that people can get an idea of what they are underestimating with the bad company culture there?

Speaker0: Well, for instance, let's take turnover, employee turnover. Employee turnover, there is some turnover that you want to have. You want to have some movement. But the unwanted turnover is something that costs companies huge amounts of money. And if you can reduce that, and that will reduce if you increase the number of highly engaged people, because they will not want to leave as easily as, as people who have not got any strong emotional connectedness. And so that is one that people underestimate the company companies underestimate how, because there is no line in the PNL for turnover, but they underestimate how much it costs them. Often what they do is they say, okay, how much money does the average person, do I pay the average person? What are my costs? And what I always challenge them with is do you actually hire an employee to just deliver the value that they cost? That would not be good business.

Speaker0: Good business is you need to get a return of a minimum of two and a half times the investment that you give. So let's say someone makes 100,000 Euro and you have what we in German call another nice word, so all the other costs associated, another lovely German word, very long, all the other costs associated with the employment is usually between 25 and 50%, depending on the number of benefits, et cetera, et cetera, that you get.

Speaker1: We made add for our audience around 80, 85% of our audience is based in the Dach region. So nonetheless, we added for like the 20, 50,000 that are listening to this interview without knowing that. So there's social security in Germany. And most of it is split 50, 50 between employer and employee. That means if you pay an employee 5,000 euros, he'll have something like 500 euros social security costs that you need to match.

Speaker0: And the minimum loan-eben cost in Germany is 22.5%, but most companies have more. So let's say it's 50% just for simplicity's sake. Then if someone, let's say it's a complex job, so it takes you one year to get up to speed, right? You hire someone and from the day of hirement and the first day in the office until they are as high performing as their colleagues in the same job who've been there for two years, let's say it takes 12 months. Quite often it takes longer. Anybody who's in sales or whatever knows that. But let's be very simple. Then a lot of people would say, okay, then turnover of one person will be 150,000 euro. But that's not true because the minimum that you have to have is two and a half times that much. So two and a half times that much, you know, simple maths is 250,000,

Speaker0: 325,000 euro, right? That's the minimum. If you have a company where the turnover per capita is higher, like many software companies, whether it's 500,000, 750,000, 1 million, you know, then it's that figure. That you need to calculate with. So if you have a 100-person company where you have 10% turnover at, let's say, $325,000 a person, that's $3.25 million a year. So if you can reduce that by 50%, you've saved half of that. You've saved 1.65 million.

Speaker1: Let's give a short break to all the C-level executives and founders who are now doing some calculations in their head.

Speaker0: And that's just one of the metrics. Another one would be sick leave, and you can do the same calculation. What's the average? You go to your HR department, you look up how many sick days do we have on average. In highly engaged companies, they're really low, and that is also a huge one. The biggest one, though, is if you're a growing company, and I know there are lots of startups listening here. If you're a growing company that grows double digit every year, and that's your business plan, that's how you're working. And you cannot realize that growth because of lack of staffing. Then if let's say you are growing by a business, you're growing your business by 10% a year, and you can only realize half of that growth. Well, the difference that the turnover and the profit you don't make is actually what it costs you not to have the right people on board.

Speaker0: And the third metric is productivity. The people who are highly engaged are usually way more productive than the average productive people in a company. And I spoke to a CEO once and I said, oh, my assumption is that the highly engaged people are 20% more productive than the average. And he said, that's not true. It's a lot higher in my experience. It's a lot higher in my experience. McKinsey says that the top qualified people in a company make between 400% and 800% more, are 400% to 800% more productive than the average. Now, I think that's a little steep. I don't know exactly what they base their figures on, but take something between 50% and 100%.

Speaker1: Paul Jay They base it on their daily rates, Otherwise, you cannot justify them. I'm sorry for my company.

Speaker0: But I'm just giving examples. And when I work with management teams to understand the dynamic, the business dynamic of engagement, I usually use turnover and productivity as a sort of example because it kind of highlights A, the cost, but B, the potential. If you could drive productivity by 5 or 10 percentage points in your organization, what will that mean for you? And it means that investing in engagement is actually a business case. How much money do you need to invest to drive engagement is relatively modest in comparison to the potential gains that you have. Yes, it requires commitment, time, a certain budget, that's for sure, but the rewards are usually 10 to 20-fold.

Speaker1: We've been talking a lot about KPIs, but psychological safety is everywhere in theory. How do you embed it, especially for your clients, how do you recommend they embed it in their daily operations?

Speaker0: That's a good link to the second engagement booster behavior, which I call positive reinforcement. And positive reinforcement is not the same thing as simply telling someone, good job. You know, that's what some people think is positive reinforcement. Positive reinforcement means exactly that. It means linking as a leader or manager, you observe what are the psychological needs that people have. And the most basic one is psychological safety. I mean, the whole notion of psychological safety came up through a research project that Google did with Harvard University, Amy Edmondson. The project was called Project Aristotle. And what Google wanted to find out together with Amy Edmondson was what factors drive high performance in teams. And I isolated a number of factors and the most basic factors, the foundational factor was psychological safety. And if you take a step back, it's easy to understand why, because if you feel

Speaker0: safe psychologically, you will share whatever is on your mind. You will not be afraid to make mistakes. That will drive you. As a team, you will find out if things go wrong, much, much better. Trust will go up. people will be able to share both their strengths and weaknesses and teams can form. Performance goes up but that's the basic basis and if you manage by fear going back to our discussion before people will not feel safe so they will hide um they will either withdraw you know fight flight or freeze you know those are the those are the results of if you're scared if you're if you're in shock if you're in fear and you will not give your full potential to your team.

Speaker1: Far from it. I see. Can you explain how the Kano model applies to employer branding?

Speaker0: The Kano model is a model from customer satisfaction. So it's a Japanese model. Kano was a Japanese, I think, engineer. And he said that there are three factors that constitute customer satisfaction. The basic factors, which is basically, let's say you have a product like a washing powder, and the washing powder has a basic thing that it should do, a basic job to be done. And that job to be done is to clean something. So if washing powder doesn't clean, that basic factor is actually violated, and people will be unhappy with the performance of the washing powder. You cannot substitute that basic service that the washing powder gives with something on top like, oh, it washes at 30 degrees as well as 60, 60 degrees. If it doesn't wash, it doesn't matter. Now, let's say you have a washing powder that is doing a really good job.

Speaker0: It washes perfectly. And in addition, you can actually turn down the heat on your washing machine. So you save some energy. That is a performance factor. So that performance factor will actually differentiate yourself at least for some time from the competition. After a while, others will adopt and we'll say, okay, and then becomes maybe even a basic factor. But the key thing in a, in a product or a brand that you want to achieve is the kind of excitement factor that people are excited about your product or brand. And that is something that's not easy to achieve, but if you achieve it, you have more competitive insulation, you have less price sensitivity, and people are excited about your product or brand. They will be linked to it. They will not easily switch, and they will stay with you because you continuously surprise them and excite them. And that's the same thing.

Speaker0: If you do the reframe now, okay, let's say the, the, the, the, the job is actually the product. Um, the question for you as the product designer, as the manager or HR department or people, culture department, whatever, how can we decide, design the culture with the job is in, in a way that people aren't just. Basically satisfied with the pay they get the safety they have as a basic factors right, um all the all the all the benefits that they get the performance factors but how can we get create the kind of excitement that people feel emotionally connected that they feel they have friends at work they have a place where they can be they can belong They can fulfill their dreams, their mission. They can feel that they are part of something bigger than themselves. Those are potential excitement drivers that actually create that kind of emotional,

Speaker0: high emotional connectedness. So that's how the Kano model kind of relates to the Net Promoter Score model as well, because usually you find those excitement factors with the nines and tens.

Speaker1: I had to smile when you talked about jobs to be done because you are in company of Tony Ulwick, the inventor of jobs to be done, made famous by Clayton Christensen. We link down here in the show notes to his interview.

Speaker0: I love Clayton Christensen's description of jobs to be done. You know that video where he talks about the milkshakes? Yep. Yeah.

Speaker1: I'll try to link this here down in the show notes.

Speaker0: So you could say, obviously, what's the job to be done with a job, right? What's the job to be done for the customer, i.e. The employee? You know, you as a, you as an entrepreneur or as a manager or as a, as a director, you will, you will, you will, yeah, well, the job to be done is that they perform a good job for the company, but turn it around and say, okay, front table, change the perspective to a customer perspective and not to a supplier perspective from, from a supplier to a customer perspective and say, what is the job to be done for, um, my potential employee that they want to attract. And it changes the way you think.

Speaker1: How do you address founders who say we're too small to care about culture yet?

Speaker0: I think that's a fallacy. I mean, that's as if you would say, I want to build a house and I'm too early on in my building process to lay the foundation. I would say that if you don't think about that from day one, you will have a hard time because then you will have to change something again. I mean, you have to change the whole setup perhaps. I think you need a vision for the culture you need to drive your business model. So it is one of those strategic decisions that you have to make early on. Uh, to ask yourself what kind of business, what kind of environment do I want to create and what, and I, I would be very, I would be very business oriented. You know, what's the business environment that is best suited for my business model to achieve my vision, my goals, my business objectives, um,

Speaker0: and really try to ask your potential employees, the ones that you would love to hire, what kind of environment I need to be at the best. And then you then you build the culture accordingly begin with the end in mind you know, that would be my take you know i think i think it's you can't start too early um to to think about culture and that's something that good kind of incubators would tell you you know, acquaintance of mine um jörg reinbold of of of the um apx incubator in berlin i mean he's a great fan of helping people, helping small, young startups get over the first hurdles, you know, and he's a great fan of creating a strong culture from day one.

Speaker1: Speaking about culture and soft skills and leadership, what would you say with soft skill in leadership is now a hard edge for competitiveness.

Speaker0: Well, I think that excellent listening skills will give you an edge in many, many ways. You want to drive innovation? Be a good listener. You want to find the secret of fast-growing, of fast-tracking your growth? Be a good listener. Train your listening skills. You want to have high engagement, build that muscle. It's a huge lever that you have in building business.

Speaker1: Christian? Yeah. It was a pleasure having you. We originally envisioned this to be one podcast, but we are now recording for 15 minutes. And I think we'll take a short break and make this a two-episode interview for the very simple reason that the way to work of most of our listeners is not that long. Would you agree to come back to the next recording?

Speaker0: I'd love to. I'd love to. I appreciate your questions and being able to hopefully answer some questions that are relevant for the audience. That's the key thing.

Speaker1: Great. Thank you very much. It was a pleasure having you as a guest.

Speaker0: Thank you.

External Links

• Gallup: State of the Global Workplace

• Christian Conrad's Website

• Christian Conrad's Book

Relationship Map

• Jörn "Joe" Menninger → Host of → Startuprad.io

What is this article about: The Ultimate Guide to Building a Magnetic Company Culture in Startups (1/2)?

Turn your startup into a talent magnet. Discover how magnetic culture drives ROI, retention, and growth — backed by real metrics.

What are the main takeaways from this discussion?

The ultimate guide to building a magnetic company culture in startups covers the foundational elements that attract and retain top talent. Part 1 of this interview with Christian Conrad explores why culture is a strategic asset — not just a nice-to-have — for growing companies.

How does this topic connect to the broader startup ecosystem?

Company culture is either your strongest competitive moat or your biggest hidden liability — and most founders leave it to chance. This ultimate guide provides a structured approach to building magnetic company culture that attracts top talent, retains key employees, and creates the organizational resilience needed to survive the inevitable crises every startup faces during scaling.

About the Host

Joern "Joe" Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.

Support Startuprad.io

Startuprad.io delivers expert guidance on building the culture that attracts investors and retains top talent. Our interviews with leadership experts and successful founders go beyond theory into actionable frameworks. Subscribe to our podcast on Apple Podcasts, Spotify, or YouTube for weekly conversations on what makes DACH startups thrive.