The What, Why, And How Of Building Your Startup’s Company Culture
Some startups boast that their company culture is the number one reason people should come work for them. Others have grown to 25, maybe even 50, employees and haven’t yet defined their culture. This article is aiming at the latter group, those without a defined company culture, whether your startup is a team of 5 or 50.
Having a well-articulated company culture is necessary at any stage of a startup. When the failure or quit rate of new ventures is 50 – 60% during the first two years, and 23% of startups fail because they don’t have the right team onboard, having an established company culture can play a huge role in diminishing that figure for your own business, and thus helping you to survive.
But what exactly is “company culture”?
We’ll first take a deeper dive into what culture is. Then, we’ll explore in greater detail the why: why establishing your company culture matters greatly. Finally, we’ll go into the how: the steps you can take to start defining your culture.
What is company culture?
Culture, in an anthropological sense, is the social behavior and norms found in societies. It is “the set of customs, traditions, and values of a community — the set of knowledge acquired over time”. Culture guides how people within a community interact with each other, and the beliefs and values that they share. While this definition is from an anthropological perspective, it is useful in helping us understand what company culture is.
In that lense, we can understand company culture as the personality of a workplace. Jon Richards, CEO and founder of compareit4me, describes company culture as “the atmosphere in the office and the energy among the team members”. It is the values, beliefs, mission, and vision that ties employees together; the set of guiding principles that a company abides by. It is what defines the behavior and decision-making processes of everyone in an organization.
Time, Space, and Behavior
Company culture defines your approach to time. For some companies, that means everyone is expected to work 9am – 6pm. For others, there are no set “working hours”, and employees are allowed to set their own schedules.
It defines your interactions with your work space, whether you work in a physical office, or remotely and digitally. Or both.
Culture also defines company interpersonal interactions, from communication methods to hierarchy and decision-making processes. For some, the organization may be more traditionally hierarchical: there’s the CEO, department heads under the CEO, and everyone else underneath. Employees have a manager that checks-in on their progress frequently, and to whom they must report to often.
For other companies, their culture is that they have a “flat” or “horizontal” organizational structure, where spaces are shared (if in a physical space), ideas can come from anyone, and the distinction between higher-up and lower-level employees is blurred. There’s still a technical manager, or functional lead, but each employee has great autonomy and independence.
Company culture also dictates decision making processes. For example, when employees come across a problem they’re not quite sure how to solve, is there a guidebook or process they should turn to? Or are employees encouraged to research on their own, find a solution, and create their own processes? Do only the founders make decisions, in a top-down approach, or are other employees invited to share their opinions as well, representing a more consensual process?
As with the anthropological meaning, culture can also be used to understand a company’s social behavior, or how employees interact with each other, from both a founder-to-employee perspective, as well as employee-to-employee perspective. Some companies may treat each other like family; coworkers are viewed like family members, who care about each other and are invested in each other’s well being, both professionally and personally. Bayt.com is one such company that prides itself on having family-type work relationships. Others may choose a more traditional approach, where work and “life” and very clearly separated, and often do not overlap.
It’s important to note that there is no right or wrong answer to what your company culture should be. In a startup, culture stems from the founders — it comes from their beliefs, values and vision. So there is no single correct way to define what your startup’s culture is, as it’s an entirely personal endeavor. What is important, however, is that you take the time to reflect on and actually define what your culture is.
Why does it matter?
As mentioned, the failure or quit rate of new ventures is about 50 – 60% in the first two years. But what does that figure have to do with company culture?
A likely reason that the above figure is so high is that employees don’t feel connected to their organization. They’re unsure of their role, they don’t see how it fits into the bigger picture of what the company is working towards, and that leaves them feeling directionless.
When employees start to feel like their work lacks meaning, that they have no direction, and that they’re not sure what their purpose is, they become unhappy and are less interested in their work. And as a founder, you’re likely already incredibly aware of how difficult it is to lose talent, especially when you’re early stage and strapped for time and resources.
This is something that can happen frequently in companies that lack a distilled culture. Without a clearly defined, and well understood culture, employees aren’t very certain about their purpose and how it fits in to the bigger picture. However, if you do have a well-articulated culture and system of values and beliefs, you’re giving your company something they can understand. You’re providing them with a vision, a framework for understanding the purpose of their work, why it’s valuable, and how what they’re doing builds into the bigger picture goal.
And that gives people purpose.
Similar to retaining talent, having a defined and strong company culture will help attract talent; and not just any talent, but the talent that is right for your company. This is super important as 23% of startups fail because they don’t have the right team, and 9% fail because they lack passion.
One way you can utilize your culture and values to attract talent is through your company job descriptions when hiring. You’ll be able to know and clearly articulate what sort of people will succeed in your company, and what sort of people won’t be such a great fit.
You also want to hire people who share in your values, beliefs, and mission. If you haven’t articulated these, it will be difficult for potential hires to know what it’s important to you and your startup. But if you have these clearly in mind, you’ll be able to share it with potential hires, and make sure that you’re only bringing people onboard who care about the vision and want to help you achieve it.
Building purpose and continuity
Having a defined culture also makes it so that everyone is on the same page; everyone knows what they’re doing, why, and how it fits into a bigger picture. Culture gives your employees a purpose.
When everyone is on the same page, they’ll work more productively, as they clearly understand what they’re working on. They’ll also work with great enthusiasm, as they know that what they’re doing is fundamental to building something, and it’s something they whole-heartedly believe in. Jon Richards, CEO at compareit4me, explains that one of the key ways he creates an awesome culture for his startup is through empowering employees and helping them feel motivated, be it through the encouragement of taking on independent projects or skills-furthering workshops.
It also keeps everyone on track for hitting goals. When you establish and embody your company culture, employees know that they have a purpose in what they’re doing. This, in turn, keeps everyone aware of the goals they’re aiming for, and an understanding of how their personal goals fit into the bigger picture.
An example is creating company OKRs, or Objectives and Key Results. The objectives are the bigger picture goals your company is aiming for, and they are tied to your company vision and beliefs — they define what’s most important in the organization. The key results are the steps you’re taking, or the things you’re doing, to realize the objectives — they are the mini-goals. When you have a defined and well understood culture, and it ties into your company OKRs, every and person knows what they’re doing and why.
How do you define your culture?
We all have our own reasons for belonging to a startup, whether as a founder or employee. But most of those reasons likely have to do with:
1. Wanting something more than the traditional corporate culture
2. A desire to innovate, always be learning, and freedom to set one’s own course
Those, I believe, are values likely shared amongst all startups, and in turn are related to company culture. But each company’s culture is specific and different, so it’s important to take a step back and articulate your startup’s culture.
To get started in establishing your company’s culture, you’ll need to:
1. Define your purpose.
What is your company doing, and why are you doing it. What do you want to achieve through your startup?
2. Articulate your values.
What do you care about? What qualities are important to you and what qualities do you look for in employees? Examples of values include:
• Always learning
• Compassionate towards each other
3. Communicate often.
Ensure everyone is on the same page and that everyone understands the company vision, mission, and values.
4. Document your culture.
Whether it’s in a Google Doc or a Trello board, have something that people can always look to that summarizes your company history, what motivated you as a founder to start the business, and what you’re all about now.
Going through this exercise and actually writing down what’s important to your company will make it such that everyone on your team is on the same page, and they have something to believe in.
Culture matters: it’s the glue holding your organization together, ensuring you attract and retain the best talent, and are all working towards a goal together. Further, you don’t need to invest a lot of financial resources to create a strong culture. It’s not all about bean bags, beers on tap, and pizza Fridays (but those can be included as well!).
Most importantly, culture is about the ideas and values you instill, and how you live and breathe those ideas, as a founder and together as a company.
By Kassidy Cornelison, Head of Startups, QLC