Bruce Poon Tip started Canadian travel group Gap Adventures with some credit cards when he was 22 years old in 1990. Today the company, which offers backpacking tours in over 100 countries, has revenue of well over $150 million.
But Poon Tip says the key to the company’s success has been creating a unique employee culture. Employees are given significant freedom and perks, including regular contests with prizes such as concert tickets and a free Gap Adventures tour every year.
This company culture, Poon Tip says, is why Gap Adventures has achieved an unusually low staff turnover rate of under 3%. But he also says creating a company culture with perks and freedoms has its costs, and hiring needs to be conducted extremely carefully.
You’re celebrating your 20th anniversary this year – how is the business travelling 20 years on?
Back then, I decided I wanted to go travelling but the only choices were a cruise, or resorts, or backpacking. So the name Gap comes from fixing that gap between the mainstream backpacker and the organised traveller. That’s the concept behind the business.
My vision was very much that if you don’t want a coach tour or a cruise or a resort, you need something else. I think there’s a space for people wanting more. So I studied business in school, and at 22 I started this business. We organised tours for people wanting that grass-roots experience.
At what point did you start gaining traction and earning profit?
By 1996, we had established ourselves and that was the turning point in the business. I started the company on credit cards, no bank loans or anything, and by the time we started becoming profitable in about 1996, then things were becoming much different.
I didn’t take investment because I don’t think my ego would allow it, honestly. I don’t think I could ever listen to anyone and I’ve always been very clear about what I wanted to do. Over the past 20 years I’ve been asked about investment, but I don’t think anyone shares the same vision about what I wanted to do.
A big part of your company is creating culture. How would you describe that culture?
Our culture is all about creating freedom as we get larger: personal employee freedom, doing the opposite to what everyone else is doing. We want to make sure that as we get bigger, we give our employees more freedom, and don’t clamp down. But that means we have to maintain a higher standard in hiring, and we are slow to hire, and quick to fire.
This type of business model is becoming much more popular in the United States, but it hasn’t really caught up here in Australia yet.
And this is a big part of your business?
The issues I have in the business now are based around leadership and the multinational aspect of the business. We drive our business on this culture, and keeping it all intact is sometimes difficult. We drive company culture to engage our customers – it’s much more interesting than our travel products.
What are some examples of how you foster culture?
We have a division in our business called Culture Club. All they do is handle culture in the business. They promote our culture and the freedoms our employees have. Anyone who is going to be hired here needs to go through an interview with Culture Club, after all the regulator interviews.
To get a job here, you need to pass our Culture Fit. If you don’t, you don’t get hired. In fact, a potential senior director failed the Culture Club last week. My VP was asking me if I could hire them, and I had to say no, because they failed the test.
What happens in these interviews?
At the moment there’s a wheel that you spin, and questions come up and then you have to answer them. I believe you have to answer five questions in these interviews. They’re all vulgar, I think! I’m not quite sure.
How many people conduct these interviews?
Usually it’s about four, and it’s random people every day. There is a random generator that puts all the names together. It could be anyone. But there are absolutely no senior people in the culture club. No senior people or management or directors.
So they just give input into the business about whether that person is a particular fit or not. I actually don’t know the questions, but I hear it’s pretty intense. I don’t handle any of this; the Culture Club handles all of it.
What are some other methods you use to foster a unique culture?
We train all of our employees on Twitter. They get 10 minutes a day to tweet about what life is like at work, and then we post it live on our website. I mean, I spend a lot of money keeping people happy, and I want people to know about it.
What incentives do you offer your employees?
After our training program is done, all of our employees are offered $2,000 to quit. We offer them the cash and they can walk. But less than 3% take it. We are very precious about our culture, and we long ago gave up trying to add more trips to beat our competitors. This keeps our culture fit.
You also like giving your employees a lot of freedom, what do you mean by that?
A good example is the new Netflix policy. Employees have no set holiday time – you just take as many holidays as you feel you deserve. And that puts the onus on the business owners to run a tighter ship, and not have jackasses working for you. We think our policies are like that. We want to have the best people here, doing the right thing.
You seem to take your values very seriously.
Our culture surrounds our values. We have a set of values, and the most important is about changing people’s lives. A good example of this is that instead of doing discounts for our 20th anniversary this year, we took donations to build an eye hospital in Canberra. We raised over $100,000 from donations from customers and employees. We’re going to Cambodia to build a 20/20 eyesight centre.
And so all of this culminates in your turnover rate, which as I understand is very low.
Our turnover rate is very low, less than 3%. It’s actually too low, and it’s a disaster because no one is leaving. I want these people to leave! You get to where we have no natural turnover, and that is the only flaw in the business at the moment. I have to be meaner.
We actually had a bit more this year because we went on a drive to make some changes in the company and we pushed some people out of the business. I keep telling people that Gap Adventures isn’t forever. Everyone thinks they are there forever, but they don’t have to be! We think there is a healthy medium.
Three years ago you had a cruise ship sink. How did that affect your business, and your culture as well?
This was actually the greatest test of our culture. We had a ship down south, and some ice broke off and took the power out. We offloaded passengers, but the power didn’t return fast enough. Fortunately no one was hurt, and everyone was rescued.
But we were able to navigate that by being transparent, giving the media all the safety documents and so on. Everyone was looking for one crack in the business, and they couldn’t find it, so they started going after me personally.
My nanny was offered $10,000 for an interview; my friends in grade school were being called. And my wife was followed. And there were people outside our offices, asking our staff questions about me personally and trying to get an interview. They could have made a lot of money doing that, but clean living paid off for us.
For smaller businesses trying to create that culture, what would you recommend?
Culture is the most important thing to attract the best people. Gone are the days when you can just pay people more. They want their jobs to offer them more, and they want great places to work. If you want to maintain the brightest and the best, then corporate culture is everything.
Culture is all about trust. You can’t micromanage people, you need to let them do their jobs and you need to give them plenty of freedom and incentives and responsibility. And it is not worth having jerks around abusing that freedom for their own means, and just jerking around. When you let people have freedom, and you couple that with responsible hiring, you attract better people.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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