How to Build a Startup Culture: 5 Do’s 5 Don’ts and 5 Heuristics
Building a good company culture is like writing clean code. Both need expertise & effort. Both are central to how the “machine” (code or the company ) works.
Company culture is the glue you need, to keep the two types of intelligence (the machine and the human) working well together. It is impossible to scale a business without a culture that works. If you fail at culture, you fail at everything else. Essentially, it is your second-most important problem after finding product-market fit.
Startups are not like organisms. They are organisms. Good startups are a complex symbiosis of machine and human intelligence. Culture building is an effort to increase the survival chances of that organism. I know you heard about what company culture is before, but indulge me to offer another perspective.
Let’s oversimplify for a moment. If you think about it, there are only two types of available intelligence to startup founders that they can leverage and create value.
- Type I: The cheap one. (aka, machine intelligence)
- Type II: The good one. (aka, the human brain)
This is the state of things for 2019 — and it seems, for the next decade. After that; who knows. So this has a very clear implication for founders/leaders.
A startup has two important missions as it starts to grow.
Mission One: Make the Machines Work Well
The first mission has to do with optimizing the use of Type I intelligence. This includes decisions around; which development frameworks to use; how to integrate the correct SAAS solutions and B2B subscriptions; how to leverage ML and AI; which readily available tools represent the most value for the money for the specific business you are running and so on. Even to pick the right content strategy to promote your business, you have to know the available tools and use them very well (here’s one I discovered today[not related]).
Many startups get this, and optimize Type I intelligence very well. Natural selection helps, too. Those who can not, don’t even get to “start up”.
Mission Two: Make the People Work Well
The second important mission of a startup is to optimize the use of Type II intelligence. This is a must if it actually wants to be a “scaleup” by growing at a good rate to make it appetizing to all stakeholders (investors, yes, but also new talent you’ll need to convince to join).Human brains (or more specifically their PFC — prefrontal cortex that does the high level problem solving and abstract creative stuff) are very capricious. For them to work well, their host needs to be well fed, well rested and free of pain. Not only that, but other parts that work with the PFC, the emotional and limbic(lizard) layers of the brain need to be sorted out, too. This means the host needs to feel secure, that he/she belongs, has autonomy in the job, is building skills, has a sense of meaning that aligns with his/her life goals, the right compensation structure to feel rewarded, the right amount of challenge so he/she can experience “flow” (the state where the person is neither overwhelmed nor underwhelmed but just in between) and a set of other things.
Solution is in the Human Sciences
Because humans are complex in how they behave in groups and in their attitude towards work we have to tackle the optimization problem of Type II intelligence via “culture”. The great thing is that we don’t have to rediscover the earth. Culture is also a field of study within sociology, that works to understand the whats, whys, and hows of human behavior in groups.
What we have to do is translate the wisdom human sciences into startup terms. As someone who has academically studied sociology & psychology and has been in the world of startups, part of my personal mission is to build that bridge. With Cultureboom we are getting closer to that mission everyday.
What is Culture Building?
For a startup or a scaleup, culture building is the initiative to influence the human variable in the most positive way possible — using the knowledge of human sciences & business tools — to optimize the integration of Type II intelligence.
Your culture is how you recruit, acclimate new members, set goals, measure performance, conduct meetings, communicate important news and decisions, reward, solve problems, manage disagreements and celebrate.
It is the answer to the questions “How do things work around here?” and “What gets you in trouble?” Company culture is the set of unwritten rules that determine most of every individuals decisions and actions.
Bear in mind, the following list is only an introduction to a complex topic.
5 Things to Do for a Great Startup Culture
- Start by measuring your KCIs (Key Culture Indicators). We kickstart that for you at Cultureboom. Knowledge of your KCIs is going to empower your startup culture building efforts. (e.g. Autonomy)
- Use rituals. All organized cultures from nations to religions depend, more than anything, on their use of rituals. Rituals are clearly defined set of actions that represent a meaning and that are repeated. (e.g. Having AMAs with founders every Friday afternoon — no matter what)
- Use stories. Humans are meaning seeking creatures. We usually write our own stories, but nothing brings people together like “shared stories”. Create and tell stories for meaning. (e.g. The story of your startup’s success in the bigger context of your industry or country)4
- Run transparent experiments. Startups are less like games of chance and more like a series of micro science experiments. Run the experiments transparently so if you get a positive result, everyone is automatically motivated; and if you get a bad result, everybody has a better context for the companies next move. (e.g. Should we transition our sales effort from social media to more traditional veins, such as print advertising?)
- Treat humans as humans, not machines. Pretty self-explanatory. Don’t buy into the hype of jerks.
5 Things to Know for a Great Startup Culture
Below are some heuristics that will get better every time you read them and as you experience problems with the people in your organization.
- People don’t believe in words, they believe in what they see happening.
- In good collaborations, no party is powerless.
- In startups, only people with a high tolerance for ambiguity survive.
- In good cultures, people work together to increase the quality of decisions, rather than try to be right.
- Skill building and playing politics are usually antithetical.
(Note: These are not to be read once, they are meant to be revisited.)
5 Things to Avoid Doing for a Great Startup Culture
- Don’t (never, ever) take uncalculated risks with a hiring or partnering decision. (You can never be 100% sure, but treat the recruitment and interviewing processes as the most important decisions a company makes. Try to increase your level of certainty as much as you can with multiple interviews, case studies, field tests, trial periods.)
- Don’t use personal or positional authority to convince people. Your power comes from you knowledge, you ability to think clearly, reason and your past experience. As long as you work with people who respect heuristic 4, you are going to be okay. If you are dealing with people’s need to “feel right” all the time, give them the feedback or part ways.
- Don’t contradict your values for short term gain. The true color of people come out under stress. We are all on our best behavior as a guest at a party. People will look at how the company maintains integrity at decision points like this.
- Don’t contradict what you say with your actions. If you do, make it a personal rule to explain to the people in the organization why you did what you did. Be open to being challenged.
- Don’t be unfair to people. People have an innate sense of fairness and justice. When that boundary is breached, everyone starts to question their own existence within that organization. Don’t screw people over. Even, be open to helping them with their transition out of the company. Good cultures feel like colleges and ex-employees like graduates or alumni.
To Sum Up
Finding the product-market fit may be the ignition spark to build a startup; but the keep the fire going, you have to build a system where intelligence can be converted into value as products or services to your users.
The most complex aspect of that system, is building the culture, as it determines how you utilize Type II intelligence. With the direction technology and the world is heading, we have every reason to imagine culture is going to be the most important leverage for a startup to compete.
There are tens of other important topics pertaining the culture and people dimension of a startup not mentioned in this article, including building the employer brand, the interview process itself, giving and taking feedback and many more. But I hope this has been a good intro to the fundamentals of culture building for startups.
If you are curious…
I’m Ozzie and my domain expertise has been people, culture and learning for the last 10+ years. Founded some startups, written some books (including Startups Grow With People: How to Pick Partners, Recruit the Top Talent and Build a Company Culture). Also acted as a consultant for some great companies. Now I’m building CultureBoom — an MVP solution for growing startups.
All the other stuff I made over the years is at ozandagdeviren.com