Why do some startups flourish while others fail? Product-market fit, customer acquisition and your ability to turn a profit are certainly all essential. But another important metric on the journey to successfully scaling a company is often overlooked: culture.
Here’s how to approach culture to boost your bottom line.
The first 50 people are crucial
The first 50 people you hire are crucial, but before you go about hiring them, you need to determine:
- Who you hire — Informal networks drive talent in the early days. But resist the urge to reach solely into informal networks because you may miss out on qualified talent. Leverage job boards, social media and, as resources allow, you can hire an active recruiting team.
- How you hire — Whether it’s a get-to-know-you conversation or a robust four rounds of interviews, you need to firm up your hiring process early. Know who in the company needs to be involved in the decision-making process, and be clear on timelines, so the candidate experience is smooth from start to finish.
- What environment you want in the company — Startup office perks are differentiators. From Friday drinks and catered lunches to open-concept offices and soundproof cubicles, planning for "the vibe" is essential, and in an ever-more competitive talent market, it can’t be an afterthought.
- Then ask — what type of people will thrive here?
With this mindset, you start to identify certain traits and characteristics that will later shape what it is you value as a company. It’s important to note that this will evolve as you move from employee five to employee 25. Joe Procopio, founder of Teaching Startup, puts this well. Use each phase as a time to reflect, and then build it into the employee journey across hiring, onboarding and retention. Because like all things, culture doesn’t just happen.
Positive feedback is a powerful tool
The biggest misconception about culture is that it comes down to workplace perks and benefits. While this is not something to neglect, it’s only one piece of the puzzle. Culture is how you operate and it permeates everything, including how you deal with customers, interact with partners, treat colleagues and lead and manage your people. Building into your company a cycle of positive feedback is key to cultivating culture.
Leaders need to use every opportunity they have to recognise excellent work, whether via formal performance reviews or informally with a simple word of recognition. In fact, one of the most important relationships in the workplace is between employees and their manager. A study by McKinsey describes this “boss factor”, citing that a main driver of job satisfaction for 39% of employees is interpersonal relationships, namely the relationship they have with management.
Acknowledgement is especially important for employees who are less likely to speak up in meetings, or those who work remotely. People who go above and beyond their job description are culture carriers and contribute to lower turnover, higher employee engagement and stronger performance.
Acknowledgement is especially important for employees who are less likely to speak up in meetings, or those who work remotely
Budgets are usually tight in the early stages of scaling a company. This can lead to the trade-off of hiring people with fewer years of experience than the role requires. However, if the people you’re interviewing have a growth mindset and are dedicated to working on their abilities that may not be such a big deal. With the right attitude towards feedback loops, you are already contributing to a healthier business.
Attend to the cultural red flags early
The impact of hiring the wrong person in a leadership position is massive. And what you do or don’t do as a result has a huge impact on the culture. When a leader exhibits toxic behaviours, it creates a ripple effect within the business that is passed on across the whole team when interacting with customers, colleagues or other stakeholders.
How (and how not) to run a startup.
This is where company values come into play, which should be your guiding principles and match up with employee expectations. Be clear on what your company stands for and what you’re not willing to compromise on.
Just as you can't require people to work 80 hours a week and then say one of your values is work-life balance, some people can deliver brilliant results but bully their teams. If you witness behaviours that go against the company’s core values, it’s important to understand if it comes from a lack of awareness. This can be an opportunity for internal coaching or a sign that the person’s values are misaligned with the company’s. If it’s the latter, and this can happen regardless of the quality of the hiring process, the most effective way to preserve the company’s culture is to continue without them. This is a decision that is as difficult as it is important to make.
Don’t underestimate role models
Leaders are the ultimate culture carriers, and one of the most powerful forms of leadership is being attentive to your teams’ needs. Daniel Coyle’s The Culture Code outlines a situation on a United Airlines flight back in the 80s where both engines failed. One of the passengers was a pilot trainer who was off-duty on that day and asked to enter the cockpit. He went in, and instead of going into teacher mode he just asked how he could be of service. What followed was a succession of short questions and answers between him and the two co-pilots; the vulnerability they revealed during that exchange was ultimately what allowed them to land the plane safely.
There has to be an element of vulnerability when leaders check in with their teams and not just for the sake of it. Ask teams if they have any ideas. Communicate with employees across all levels, departments and locations every day and listen — really listen.
We recently introduced an internal email inbox called 'this process sucks'. It’s a place for employees to provide suggestions on what we could do better as a business
We recently introduced an internal email inbox called “this process sucks”. In addition to routine performance reviews, it’s a place for employees to provide suggestions on what we could do better as a business. The top three ideas will be vocalised and implemented as evidence that leadership is serious about initiating change. In a fast-growing company, allowing space for honest dialogue in company all-hands, anonymous surveys and 360 reviews will identify what the business needs to be successful and what you or your manager could be doing to facilitate that.
Culture manifests itself everywhere we go. It is who we are and where we come from, and it shows up in our choice of friends, our everyday actions and where we spend a third of our lives: at work. As such, companies have a real power for change in the world that goes way beyond the bottom line or the office walls. The experience companies provide has a ripple effect because each employee is a parent, a sister, a brother and a friend. Whatever experience employees have at the workplace, let’s not waste the opportunity to make it better.