Entrepreneurs startups

Does Culture Really Matter in a Startup?

Startups don’t turn into successful companies without some guidance, direction, and strategic leadership. This can happen in numerous ways, but there’s one integral piece to the puzzle that must be addressed sooner rather than later: Company Culture.

What is Company Culture?

At first glance, company culture seems like a buzzword or generic business term that you’d see in the back of a textbook. However, it’s actually a very significant element of building a startup and transforming it into a successful business with long-term growth potential.

Every entrepreneur and the business owner agrees that company culture is important, but everyone has a different definition. Here are some common explanations:

  • Company culture is the spirit of your people. It’s the morale that emanates from your office.
  • Company culture is the composite of your employees, their interactions, and the environment in which your team works.
  • Company culture is the “intangible glue” that holds everything in your business together.
  • Company culture is the way people treat one another inside your business.
  • Company culture is the discernable DNA of the founding team and executives, which is directly and indirectly passed down to each team member.

Company culture can be described in dozens of ways, but it’s essentially the atmosphere of your workplace and the collective personality of your team members. Company culture can be fun, exciting, flexible, positive, encouraging, or collaborative. It can also be hostile, frustrating, pessimistic, disorganized, or stressful. It’s dynamic and ever-changing, which means you have to remain vigilant at all times.

Why Does Company Culture Matter in a Startup?

When you’re trying to get a new venture off the ground, something as intangible as company culture might sound like an investment you can move to the back burner. But if you dig in and see culture for what it really is, you’ll quickly discover that it plays an integral role in starting, growing, and sustaining a successful business. Here are a few specific reasons why company culture matters:

  • It’s already there – You already have a company culture, whether you realize it or not. Either it springs up like weeds, or you carefully select and plant seeds to grow a strategic garden with vibrant fruits and vegetables. If you let company culture go untouched for too long, you may reach a point of no return where the inmates take charge of the asylum. The time to cultivate culture is now.
  • It’s defining – Your startup’s culture defines how people feel, both internally and externally. It directly influences how your employees feel when they wake up on Monday morning and know that they have to spend 40-plus hours in the office over the next few days. It also impacts how your customers perceive your brand and everything it stands for.
  • It’s magnetic – The right company culture is irresistible – particularly to employees. Even if you can’t offer the highest salary or the best benefits package, a magnetic culture provides a sense of meaning and purpose that discourages people from leaving. It also magnetizes applicants and helps you recruit top talent. It’s a secret sauce that can’t be bought or replicated by the competition.
  • It’s rewarding – What kind of business do you want to work in? What gets you excited when you walk into the office? As a startup founder, you have the opportunity to create a personally rewarding culture. Not only does this provide immediate satisfaction, but it also increases your longevity and ensures you won’t give up on the business when circumstances get tough.

It’s much easier to think about company culture from the start than it is to force a square peg into a round hole on the back end of the launch. Founding teams that think about company culture from the beginning are far more likely to develop businesses that prioritize people and connect with customers. In other words, it’s a worthwhile investment.

8 Tips for Developing a Magnetic Culture

Developing a magnetic culture is challenging. (If it were simple, there wouldn’t be anything noteworthy about it.) But there is a formula for doing it. Here are a few suggestions:

1. Identify Your Purpose

Every entrepreneur and business owner wants to be profitable – that’s a given. But unless your business is on a Wall Street trading floor, the desire for money doesn’t create a compelling narrative for employees and customers. You need to peel back the layers and identify your actual purpose. If you’re unsure of what this is, try asking questions like:

  • So what?
  • How does this actually help people?
  • What intrinsic needs do my products and services satisfy?
  • What would happen if our company didn’t exist?
  • What opportunities are we providing for our employees?
  • If money weren’t an object, what would we be doing?

Once you have a vague understanding of your purpose, you can get more specific by identifying and documenting values. These values can then be translated into a mission statement. All of these individual elements work together to solidify what your startup stands for.

2. Hire the Right People

It’s not uncommon for an entrepreneur to launch a business, hire people, and then develop a company culture that fits the personalities of its employees. At first glance, this might not seem like a bad idea. In fact, it feels rather inclusive and freethinking. Unfortunately, this approach rarely works out.

The better approach is to identify the kind of culture you want and then hire with these values in mind. This results in less friction and immediate alignment with company values.

Value-fit hiring can be a challenge, but it’s worth the additional effort. You can determine a lot about someone’s values through simple interviews and questioning. Ask them direct questions about their own values and expectations. Inquire about the type of business they would build if they were given the opportunity. Ask their references questions about character and personality.

Dig deep and you’ll find out who a person really is. You can change a lot of surface-level behaviours and habits, but it’s difficult to make someone change deep-seated values and attitudes.

3. Influence and Educate

Hiring people with the values and attitudes that align with the company culture you’re trying to develop is just the start. Left to their own devices, they’ll scatter in a dozen different directions. The key is to influence and educate your team members on a regular basis. This may look like:

  • Developing a comprehensive onboarding process that walks new hires through each aspect of the business and sets expectations accordingly.
  • Investing in regular training that’s tailored to the company’s values and teaches employees how to think within specific frameworks and models.
  • Setting each employee up with a member of the executive or management team for regular one-on-one mentoring and discussions.
  • Letting employees evaluate their fellow co-workers to create accountability and ensure real-time alignment with company values.

These are just some illustrations of formal ways you can educate and train people on the values that your company culture priorities. It also happens in very natural and unassuming ways. It’s the quick conversation you have with an employee in the hallway when you witness them do something that goes against the company culture. It’s the note of encouragement a co-worker writes when someone is down in the dumps. It’s the way people smile when they pass by. It’s the thousands of small interactions that encourage people to follow the plan.

4. Create an Amazing Workspace

There are plenty of intangible factors involved in workplace culture, but there are also some extremely practical elements too. For example, the physical workspace – e.g., the office – has a direct impact on how people feel and work.

You don’t have to create some crazy office with slides, nap pods, and beer on tap. Instead, pour your resources into developing an office environment that reflects your values.

If your company culture prioritizes freedom of expression, this may look like giving each employee a small budget to decorate their offices. If you want people to be healthy, it could look like building a small gym or filling the break room with healthy snacks. It all depends on what you’re attempting to accomplish. Big budget or small budget – it doesn’t matter. There are plenty of options.

5. Go Beyond Work

Too much work and no play will make your employees dull people. While work is the primary focus, company culture extends beyond business duties and responsibilities. Make sure you’re addressing all aspects of your employees’ lives.

Going beyond work looks like hosting an event where the focus is on something other than the business (such as a charitable initiative or community need); encouraging flexible working hours, or providing benefits for family members. Essentially, it’s showing that you care about your employees as people.

6. Fulfilment Over Happiness

Too many businesses focus on keeping employees happy. And while there’s nothing wrong about having happy employees, this shouldn’t be the primary objective. Happiness is an emotion that ebbs and flows over time. If everything is predicated on happiness, employees will leave the moment they get bored. Fulfilment is a much better focal point.

When employees are fulfilled, it means they’re learning and growing. It also indicates that the organization is delivering on the expectations that it set during the recruitment and hiring process.

Fulfilment is hard to measure, but it’s typically the result of pouring into employees and making them feel as if their working is meaningful. Make people proud of the company and they’ll reward you with loyalty.

7. Communicate Everything

Never assume that your employees know something. You have to be as clear as possible with your expectations, goals, and initiatives. This means communicating everything with overwhelming transparency.

Communication needs to happen on both a macro and micro scale. Big picture communication looks like company meetings, monthly email updates, and informational bulletins in the break room. If you zoom in a little, micro communication looks like one-on-one meetings with employees that help them understand their performance.

8. Give Over the Reins

As the founder or owner of a business, you have to establish the company culture and set the rules. But as time passes, you don’t have to grip the reins nearly as hard. In fact, you’re free to give them over to your employees.

Giving the reins over to employees may sound scary, but it’s actually beneficial and liberating. You’ve done the hard work and they can’t override your underlying values. Instead, they’ll take these values and embody them in ways that make the team feel more fulfilled and empowered.

Is it Too Late – Changing Company Culture?

What if your startup has already been around for six months or a year? Or what if your company has already matured past the startup stage? Is it too late to influence your company culture?

While it’s obviously ideal to shape company culture from the beginning, it’s not impossible to make changes after the fact. However, you have to be realistic with your expectations.

When attempting to change company culture, incremental progress should be the focus. Set goals and expectations, and then aim for one percent daily improvement. In theory, one percent improvement will lead to 100 percent culture change in roughly 14 weeks. While it’s unlikely that you’ll completely change your culture in less than four months, this just goes to show how powerful small, everyday improvements can be.

Building for the Future

It’s easy for entrepreneurs and founding teams to get so caught up in the present that they compromise future opportunities for growth. And while product innovation, marketing, branding, customer acquisition, and funding are all significant, you can’t focus on them at the expense of company culture.

Your products evolve over time. Marketing best practices will come and go. Branding will change. Your customer acquisition model will shift. Funding will dry up. But company culture remains consistent and retains every ounce of its value over time.

If you want to build a future-proof company that’s constructed on a strong foundation that prioritizes people, company culture is a good focal point. It’s not enough to sustain a business, but it sure is an excellent place to begin.

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