Culture eats strategy for breakfast (Peter Drucker). Culture is the bedrock of any organisation; a vital element of all startups regardless of size, stage, etc. Group culture is considered one of the most powerful forces on earth. Its presence and effect are seen in successful businesses, it’s evident when it is absent or even toxic and its impact can be measured. Ozan Dagdeviren defines company culture as what gives people a sense of belonging, meaning, and a common way to define themselves, conform and contribute. It is the answer to the question- How are things done around here.
Culture isn’t something automatic, it is built, intentionally. It transcends beyond company swags, perks, retreats and benefits, after all, a company can give all these to employees and still be toxic with people mistreated. The impact of good and bad experiences at work is significant and the best situations produce great work. Work culture determines if experiences at the workplace will be positive or negative.
When it comes to startup culture, perks are not necessarily culture- it is given as a result of culture. Company culture is deeper. It is identity. It is something more rooted, more like the values and ethos embedded within an organisation that shape how people work and how certain interactions and decisions are carried out. It also involves how these values are held on to as the company grows from a few people to hundreds and thousands of employees. Culture is complex and unique to every startup. It cannot be hacked or bootstrapped forever. Due to its influence on day-to-day operations, people’s lives and business outcomes, culture should be managed with the same degree of importance as other business assets. Most applauded startup cultures are known for their people-first approach; putting employees and customers first. It can be -
- How an employee feels on their first day
- What your employees should expect from their manager
- The method of correction, hiring and dismissal of employees.
Additionally, to remain competitive, startups have to differentiate themselves through meaningful work and experiences and healthy environments that are customized to their unique context. A Columbia school professor once referred to employees as internal customers who should be directly involved in the business. You build a healthy, enabling culture for your startup and the people in it and then, these people in turn build your business.
You might be wondering; why work on company culture when there’s fundraising to do, customers to satisfy and investor returns to consider? Look at it this way; you can raise all the funding you need and have a larger share of the market but without a culture that determines how you attract, hire and retain the right people, all these accomplishments can go downhill at a speedy rate. Successful companies like Amazon, Google, etc have described how their cultures have improved business performance. Putting culture in place from the onset helps ensure that you hire the right fit for your business and that customers are made a priority and not just considered as tools for income generation, among other reasons.
2. How to build a good startup culture
There isn’t a one-size-fits-all approach to establishing a culture for your startups. Culture is unique, so Startup A’s culture and approach will definitely differ from that of Startup B. However, this list explains some of the approaches we’ve seen that have enabled startups to build a solid and good work culture and you can take a clue from this;
Taking a cue from Ed Catmull (President of Pixar Animation and Disney Animation), candour is forthrightness and frankness- a subtle difference from honesty. Honesty entails saying everything without reserve, maybe telling an employee that he/ she is sloppy and does a crappy job. While this may be true of that employee, candour helps you pass this message along in a clear yet empathetic manner. It has some sort of reserve considering emotions and the message delivery method. Candour does not mean that you lie or withhold feedback because you are considerate of people’s emotions and how you look to them, rather it means, conveying truth and feedback in an honest way without hurting the emotions and esteem of the people you work with. A hallmark of a healthy culture is that its people feel free to share ideas, opinions and criticisms without holding back (due to fear, knowing they will not be heard, etc). Candour encourages people to share without restraint and within the confines of genuine respect for everyone on the team. It ensures that everyone in your team focuses on the task at hand and not some hidden agenda. Yes, they will disagree, argue or have differing opinions but candour ensures that every opinion is shared freely and devoid of hate and disrespect for team members.
Candour also helps establish trust. Everybody on the team is sure that whatever opinion they have will be considered and deliberated upon. This trust propels them to share without restraints and not hold back. They trust that even when their feedback is taken and talked about, opinions from other members of the team will be forthright and sincere but without undertones of personal attack on them.
Your approach to failure as the leader of a team determines to a large extent, the risk appetite of your team. A failure-averse culture will produce people who consciously or unconsciously avoid risk; they will seek instead to repeat something safe that has been good enough in the past making their work derivative and not innovative. To build a culture where failure doesn’t equate to being dumb or inadequate, first you need to accept what failure really means and define what happens when you or an employee fails. Do you shut down and turn inward instead of coming together with the team to untangle the cause of the problem so it can be avoided going forward or do you instead proceed to fish out the individual/ team that made the mistake and punish them for it?
Building a culture where failure is accepted entails that you first change your mindset and then, that of your team on what failure means. Reading about the upside of failure isn’t enough, practice must follow suit. You have to build a team where there is no shame for failure, but rather one of introspection and correction in the event of a mistake. Healthy cultures teach that failure is an avenue for growth and improvement and is an important part of learning. This does not in any way mean glossing over the mistake as though it doesn’t exist or out-thinking actions to avoid mistakes, but rather, acknowledging the reality of the mistake and the benefit of growth that can happen as a result. As leaders, ensure that you talk about your mistakes with the team and your part in it, making it safe for others to share too.
Do not misunderstand this, failure can be expensive. However, making it less expensive to fail is important. Build systems and structures where the cost of iteration and exploration is low. With this, failure can be minimized and managed and in events where it occurs, examine it from two angles- the event itself and your reaction to it. Examining the event entails that details about the mistake are evaluated with a focus on the decisions taken that caused the mistake and then your reaction. Do you bury your head in the sand or give your employees a hard time for the mistake or do you make it safe for team members to acknowledge and learn from their mistakes?
Another way of establishing a culture where mistakes are accepted is to build trust. Doing something new and unknown is oftentimes scary and so trusting your employees mean that if they make mistakes, especially when trying out a new way of doing things, you trust that they will act to help solve it. For the employees, trust means that they know you will not hold the mistake held over their heads, that you will trust them to rectify it and fix things. Be intentional about showing that your company does not stigmat6ize failure.
- Invest in building trust:
Whilst it is common to keep operations and processes shrouded in secrecy, this isn’t recommended for startups looking to build a culture of mutual trust between the management and employees and between employees themselves. A core part of building trust is embracing authenticity. It is common for founders and the management team to err on the side of secrecy, this isn’t often a wise decision. A method that should be employed instead should be a thoughtful consideration of the cost of secrecy weighed against the risk. Being secretive sends a message across to the people you work with- one that signals to them that they cannot be trusted. However, being authentic and candid tells people that you trust them and there is nothing to fear.
To confide in employees is to give them a sense of ownership over information. By so doing, employees are less likely to divulge information that you’ve confided. Sharing information and discussing sensitive issues with employees shows that you view them as partners and part-owners in the culture and so, they will not want to let you or any member of the team down. One benefit of transparency is the relationships and connections formed between everyone in the organization. It means that you know when things are going well or not, as opposed to this being hidden when employees do not trust you with information. Employees feel like they truly belong and are part of the decision-making process and so, will do anything possible to ensure that the goals, missions and objectives of the organization are met without needing external force, coercion or control.
Your business will definitely go through changes such as buyouts, mergers, acquisitions, etc and so your employees need to trust you and believe that their interests will be protected through the changes. Your words backed up by actions over time should indicate that they can trust you to make the right decision for them and the company. Investing in building a culture of high trust always pays off.
3. What makes a good startup culture?
- A good startup culture places collaboration before competition:
Knowing that innovation is necessary to the survival and success of a business, a good startup culture encourages people to collaborate and collectively discover new ways of getting work done instead of rewarding individuals who are more concerned with getting to the top and putting others down by their actions. A good startup culture rewards collaboration.
- It focuses on strengths rather than weaknesses:
There is definitely no perfect employee. Startups with a healthy work culture ensure that employees’ strengths are identified and honed rather than pointing out areas of weakness and imperfection. It seeks to create teams where people complement each other's skills, learning and growing together and, contributing these complementary skills to move the business forward.
- Good startup culture is transparent:
Here, critical decisions are not hidden or hushed but are rather shared with employees. It seeks to attach meaning to path-changing decisions or pivots and shares insight and feedback gathered with the team. Key performance indicators such as client satisfaction, state of competition, number of customers, etc are shared with the team making people care about the business as much as they care for their salaries. Long-term strategies and the roles of those involved are made clear, promoting transparency and accountability.
- It is meritocratic than hierarchical:
Hierarchies are important for maintaining order and a structured system of reporting. Healthy startup cultures encourage feedback from every employee irrespective of status or position. Promotions, bonuses and other compensations are given to individuals who work hard for it, who have proven great mastery of skill and experience and not just based on age and other metrics that are based on plain hierarchy.
- Places learning as a core value:
Startups with a healthy culture promote learning. They put personal and professional lifelong development first, equipping employees with the necessary resources they need to learn and grow. Mistakes, failures and obstacles are not just sidelined but are examined and viewed as opportunities to grow and improve.
Remember that building a healthy culture for your startup is intentional and, it is easier to start the process right from the onset rather than applying a ‘fire brigade’ approach to this. It isn’t just the duty of the HR/ People manager to do this, but a collective effort of all. A good work culture ultimately pays off, rubbing off even on business outcomes.