New companies tend to think that their startup culture isn’t as important to focus on in the early days as other aspects of the business, but in my experience, it’s critical at every stage.
Company culture is one thing I would be more focused on and diligent about if I could do it over.
Culture starts with basic principles. Those principles become the foundation of everything else you build. So take the time to ask yourself, “What principles will guide how we run this business?”
Values need to be an area of focus right from the beginning. Every business tends to start with one person or a couple of co-founders, and these values should align with who they are.
The core of the company and culture are its values, and those values need to make a statement.
Remember that your values may differ from other companies’ values. That’s a good thing, so don’t blindly copy a company’s value even if you love the company.
Your values and guiding principles need to be things that someone can disagree with. We often do a funny thing when selecting values, trying to make them something that no one would disagree with. Who doesn’t want to be honest? Choosing a principle like that says nothing about your company culture. You need potential hires and even certain business associates to decide to join your vision based on your values.
For example, you may say your values revolve around being slow and steady. There’s nothing wrong with that if you have a core reason why you think it gives you an advantage. On the other hand, someone may say they value breakneck speed first and foremost, which is fine, too.
The founder’s core principles ideally should align with the business’s core principles. This means you need to understand your own personal values. Take the time to dig deep and understand what principles drive you. You also need to dig deep with your team – you should understand what drives their work. The next step is to make sure those values point back to the specific goals and purpose of your business. Do your values align with the thing you’re trying to build and the people you’re trying to serve?
Once you understand your core values, you should make sure that the day-to-day experience at your company aligns with those values. It’s not enough to just say what your principles are. They should be reflected in your business.
Two core things make up your business: humans and systems. The process by which human beings interact with the system can include:
- How do you hire people?
- How do you fire people?
- How do you celebrate people?
- How do you promote people?
- How do you compensate people?
Your values help you build the frameworks you need to think about those things. You also need to think about business operations. How do you run maintenance? What’s the operating cadence of the business?
My best advice to founders on the topic of culture is to think about the various practices or rituals you’ll need to build and to map them out as a starting point.
- Your value practices
- Your people practices
- Your operational practices
The key for each of these three areas to be successful is in ritualizing them. If you say your culture is centered around routine communication, then you have to ritualize how you gather and share information.
Values in Hiring
One area where many founders get tripped up is in vetting people who want to join their team. They have to figure out a way to make sure potential hires match the values they’ve decided to hold themselves to. Culture is ultimately determined by your team, so the principles held by the people you hire is essential to understand.
If you’re an agile company, is it okay for you to hire someone who won’t be totally comfortable in that environment? If you say being comfortable with ambiguity is a core value, would you want to hire somebody who needs to know every detail every time?
This doesn’t mean that everybody in the company has to agree on everything, but you should be optimizing for your value system. This is what will build your culture.
Toxic Culture or Bad Fit?
There are a lot of opinions and information out there about toxic work cultures, which is merited. But often the phrase ‘toxic company culture’ doesn’t tell the whole story.
For example, there are some cultural practices some people might consider negative, but they’re only negative because that person doesn’t align with the values of the business.
In the case of Walmart, they’re very frugal on cost and do everything to keep costs low because they believe they’re in a low-margin business. The way they sell to their customers and maintain a great company culture is by not wasting their margins on frivolous things.
But someone from a startup environment where lunch is catered every day might think Walmart has a terrible company culture. Sometimes aspects of a culture are poor team member fit rather than the culture itself being explicitly bad.
This isn’t to say toxic cultures don’t exist. You may have a chauvinistic culture or one where everyone is arrogant and in it for themselves – that’s just a bad culture, period. Even if it works for the company, in the long run, it won’t be a sustainable business.
To find a good fit, employees, and employers both need to ask themselves, “What is a company culture I fundamentally do not want to operate in?”
Think about company culture the same way you think about everyday life, then translate it to your businesses. It’s called ritualization.
What makes up the culture of a country? It’s the rituals and events the country reflects on and observes, including why they mark them and how they celebrate. In the U.S., for example, we have July 4th; as a culture, we all know what we do for the 4th of July and what it means. We have parades, we barbecue, and we launch fireworks.
For a company to effectively sustain its culture, rituals and reflections have to be introduced, agreed upon, and worked on collectively to move the business forward. Rituals bring intentionality around culture.
Find out what matters, build rituals and data around them, then actively improve them over time. It can be rituals around wins, learnings, company reporting, hiring, etc.
That’s when it becomes the core of your culture, but it all starts with your value system.