As a startup, your culture is the everyday reality of organisational life. It is not the mission statement, your balance sheets, or even the employee handbook alone.
The culture is what you do, what you say, the way you behave, the way you treat each other, your products, your customers, your community and everything that makes up your organization.
A startup culture is a set of shared values, thoughts and beliefs that shape how the team works to achieve the company’s goal.
Your startup culture includes beliefs, behavioural patterns, company policies, customs, written and unwritten rules that make up a unique social and psychological work environment.
Startup culture is aimed at helping to ease communication, breaking barriers and overcoming hurdles in growth within new startups, hence Startup culture should be creative and laid back instead of rigid and passion-driven.
The best startup cultures are seen in how they treat people — employees and customers.
That approach is visible in open communication, free-flowing creativity, and other employee benefits like wellness stipends, flexible work hours and resources for child care.
Benefits of Culture to Startup Growth
- Effective recruitment process: The team-first organizational culture implies hiring the right people, who will blend into the start-up work environment, value other team members, as well as build strong relationships within the community from the get-go.
- Easy and Effective onboarding experience: When new team members know what day-to-day office life is like and what the company’s values and ideologies are, it is much easier for them to become valid and integral members of the team.
- Increase in employee retention: Having a strong startup culture helps companies avoid the high turnover of employees and bring back those who want to leave.
- Increased productivity: A strong startup culture is a lifeline for better productivity because it improves teamwork, provides a high sense of satisfaction, and gives room for creativity leading to an increase in performance on various levels.
- Increase employees’ sense of loyalty: It’s obvious that when an employee feels comfortable and appreciated at the workplace their loyalty increases, leading to a high level of commitment and faithfulness to the organization.
- Strong brand reputation; A well-defined startup culture has a positive effect both inside and outside the organization. It helps build a reputation that is supported by customers and by employees.
- Revenue growth: Good company reputation, excellent customer service and satisfied employees – all lead to revenue growth.
- Longer lifetime of the company: With revenue growth and a good reputation comes stability and devotion to the brand, which are crucial factors to prolong the organization’s life and give it a chance to stand the test of time.
Steps in Defining your Culture as a Founder
1. Start with a purpose.
As a founder, you need to have a purpose for establishing your startup culture. To create that purpose, understand the “why” of your operations. What (or whom) does your business serve? Whatever your answer is, it should be genuine, inspiring and aspirational.
2. Define a common language, values and standards.
For a startup culture to be successful, everyone at the company must speak the same language and be on the same page about what the company’s values are.
This common language needs to be understood by everyone in the company — from the Founder/CEO down to the last person in the employee food chain.
Write down those values. This is important as it ensures that your culture withstands the test of time and makes them tangible.
3. Lead by example.
A culture is shaped by how a company’s head acts. As a founder, you need to internally and externally reflect the company’s values and be its strongest advocate.
You shouldn’t just recite the company mission statement as a solution to everything, rather you should always put it into action and exemplify what the company stands for.
For example, Richard Branson of Virgin Air represents everything the company wants people to see them as: fun, bold, brash and spirited.
Founders who lead by example are sincere about what they do and have an exemplary work ethic. They are the main source of inspiration for other employees and those who want to join the company.
4. Identify your (cultural) ambassadors.
Every startup has employees who are passionate about the company and its culture. Not just that, but they are also willing to help everyone else understand who you are as a company and what the company stands for.
These sets of employees are your biggest asset and your best cheerleaders.
Identify who these sets of employees are, ask them what they like about the current culture, what they don’t like and why culture matters to them. That will help you measure whether you should stay the course or make a few changes to the current culture.
5. Be truthful and always communicate.
Integrity is “doing the right thing, even when nobody’s watching.” Whatever you do, you must always demand that everyone in your company adheres to being truthful and approach everything with the utmost integrity. Failure to comply is not an option.
6. Always treat people right.
As a founder and a leader, you need to treat your employees well, otherwise, the culture you’re trying to establish won’t be of much use, if you have a high employee turnover rate.
When you’re thinking about hiring new employees, it’s important to spend time screening for the right character rather than skill.
Hiring someone with impressive skills and a bad attitude will impact negatively on the culture, but once you’ve hired the right people, treat them right.
Also, once you find someone with the right cultural fit, do everything in your power to develop him or her, and help that person scale.
Creating a startup culture starts from the top (founders and top management); starting with hiring the right people, caring for your employees and customers, leading by example, and so on.
Building a startup company culture is a very complex issue that affects the success of your company on many levels.
You need to put the time into making sure your employees are performing at their best in trying to adopt the company’s culture in whatever they do.
Here is a video that explains this topic in detail and discusses how Zappos, an online shoe retailer was able to reach $1bn in annual sales by understanding the importance of startup culture.