There are several factors that lead to a company’s success: funding, talent, and product/market fit, however, one of the most overlooked elements is a company’s culture and the expectations that come with it. Culture is crucial.
Next to product/market fit, I believe culture is the second most important element for success, but it is often overshadowed by talent. Many companies look for the best talent and then like pieces of a puzzle piece the team together hoping that the culture will magically develop itself over time. That is a dangerous approach. I wish more companies took the opposite approach. While talent is crucial, especially in today’s competitive environment, a strong culture from day one will establish the foundation to attract the best talent.
So what is the right kind of culture? I have thought about this quite a lot and I believe that the following cultural foundations are important to establish from the get go:
- Vision: This is crucial in the early stages. Your vision should be built to excite and inspire. You need to make it a priority that all of your employees coherently understand your vision and are working toward it every single day and in everything that they do. They also need to understand how the vision fits in with your culture. As a CEO or manager one of the first things you should be doing is explaining and communicating the vision to your teams so that your employees understand what it is going to take to hit the nail on the head. This way they are much less likely to waste time and resources on things that won’t get you to the summit. Aaron from Box.net explains this brilliantly here. You need to stick to your long-term vision and don’t change it to make a quick buck. It’s even worse when your employees see you flip flopping.
- Meritocracy: This is such a buzz word because so many companies claim they have a culture where the best performance is always recognized, especially much larger, less inefficient ones–aka corporate America. In order to make this work you need to truly reward those that go above and beyond, understand your vision, and help the company grow in everything that they do. Your best developer should be head of development, your best sales person should be heading sales, etc. Leadership should flow both top down and bottom up. Rather than hiring someone with experience externally to head these areas, I think its best to promote within–promote someone who has been there and built the business from the ground up.
- Survival of fittest: I am a big believer in developing a healthy competition in the workplace. You need to motivate your employees to strive to be the best and establish a culture where only the strongest will survive. Things move fast and there is no room for dead weight, especially at a startup. I am not saying establish an environment where everyone is constantly watching their backs, but you need to set the precedent that performance will be rewarded and that you will part ways with those that just aren’t getting it. There is a fine balance here. Obviously you need to let your employees fail along the way but if they are not learning from these failures it is time for them to go.
- Fight constraints: Be willing to run into those brick walls in your way. It’s inspiring for employees to see their CEO or manager do what it takes and find a way to make it happen. It may be exhausting to fight these constraints, but you need to create a culture that is willing to tackle adversity and come up with unique solutions to problems that at first seem insurmountable. Encourage your teams to try and come up with these solutions and always communicate and share their strategies.
If you can succeed in building the right culture and an environment where the best people are rewarded and recognized then finding that product/market fit, recruiting the best talent, and raising money will become that much easier.
I would love to hear everyones thoughts on what other factors you think are important as well as what to take into consideration when building the right kind of culture.