Startup Culture: Why It Matters, and How to Shape It

Teambuilding Exercise. Source: Bored Panda.

This post is one of a series which covers common questions about why startups exist, how they work, and how to navigate a career in the startup world.

Q. I know startup culture is important, but can you really control it?

Most startups know that culture is important, but they find it elusive: it seems hard to define and even harder to control.

But it doesn’t have to be that way.

To illustrate, imagine you start a company with two other co-founders. One of you is the CEO, one is the CTO, and one focuses on customer acquisition. You hire a few engineers, a designer, and an office manager. You lease an office, crank out product, and start signing up customers.

After six months, business is picking up nicely, so you open a position for someone to run your Customer Success group. You find a strong candidate who seems perfect for the role. She comes into your office for a day of interviews, then later on she goes out for drinks with some team members and fires off questions about the company.

When she gets home, her roommates ask her for her impressions of the company. She pauses and thinks about what she learned. She considers:

What motivates the team? Did the team members she met decide to work at the company because they specifically believed in the team and mission, or did they just need a job? Do they arrive in the morning energized to tackle anything that comes up, or do they stare at the clock waiting to go home? Is the team motivated by fear of failure or by the chance to do something great? Are people being challenged to do new things, or were they hired to do the same jobs they did at their last companies?

What are people’s work habits? Do people arrive early in the office and leave by dinner, or do they work late into the night and then not roll back in until lunch the next day? Do people work from home regularly? Does the team respond to emails and Slack messages late at night and on the weekends, or do they sign off and go dark when the workday ends?

Is the team diverse? Is the team a mix of immigrants and natives? Do they have a mix of experience levels, or is everyone straight out of school? Does it have racial and gender diversity, or were they all college buddies? Did most of the team know each other before joining the company, or were they recruited from a variety of backgrounds and networks?

Does the team socialize? At the end of the day, do they hang out together, or do they go home to other friends and family? Are their social lives wrapped up in the company, or is the company just one of several social circles for them? Do they like each other, or are they merely cordial?

Where do the ideas come from? Do the founders generate the ideas and then expect the team to go and execute them? Or is every team member expected to contribute their own ideas? Are people hired based on their ability to generate ideas and advocate for them, or just on their ability to crank out tasks defined by someone more senior?

How does the team collaborate? Do people schedule meetings to hash things out in person, or do they toss ideas around virtually over email and Slack? Do people openly share what they are working on with other groups and solicit feedback, or do they hold their work close to the vest, avoiding feedback since it might create debate or conflict? Are decisions made by consensus? If so, do decisions get stalled when consensus is not reached?

Do people seek or avoid conflict? When there is a tough decision to be made, do people get together and hammer it out? When a difficult conversation is needed, does the team wallow into it or avoid it? Do people complain about other teams behind their backs, or do they seek them out and resolve their differences proactively?

Does the team promote from within? Are team members being trained on all aspects of the business so that they can take on more responsibility as it grows, or does the company expect to hire new managers from the outside once more “adult supervision” is required?

How does the team plan? Does the company have a clear set of goals and objectives the team is working towards? Is it clear who is responsible for which work? How often are the plans refreshed? Do the execs pick a plan and stick to it all all costs, or do they replan as new data becomes available?

Who is rewarded? Are promotions and kudos handed out to the people who jump in and perform heroics when there is a crisis or to the steady and reliable performers? Do the folks working in customer-facing roles get most of the kudos, or the ones behind the scenes making the trains run on time? Is challenging the status quo a fast track to get more responsibility, or is making noise a good way to get smacked down and silenced?

When your recruit thinks about all of these factors, she is considering your company’s values, norms, and expectations. She is thinking about how the company gets work done, who makes the decisions, and how people are rewarded.

What she is considering is, of course, your culture.

And you have one, whether you know it or not. Any team of people trying to accomplish something does.

Q. OK, where does that culture come from?

A company’s culture is largely an output of the people who work there. A company with mostly introverted people probably will have a quiet and considered culture. A company with a large sales team will probably have a more customer-centric and more extroverted culture. A company full of insecure or distrustful people will have a political or even toxic culture. If the team hates conflict, the culture will probably be indecisive and passive-aggressive. A company with experienced people will draw on established best practices, where a company full of people new to the workforce will tackle problems based on intuition and extrapolation from first principles.

Culture is set by the leaders, starting with the founders. The leaders design the org chart and put together the team. They decide who to reward and promote. They either welcome feedback and challenges or are threatened by them. Their behavior sets an example to the rest of the team, and the rest of the team models it.

Culture is set early and is hard to change. When your team arrives to work on a Monday, they are generally going to behave the same way they did last Friday — it takes a deliberate act to change people’s habits. When your team hires new people, they will usually hire people who fit into the culture. And if your team is homogenous, it will have more trouble adding diversity later.

Culture is not HR. A great HR leader can help the company’s think about the culture they want, find ways to move the culture in the right direction, and monitor progress, but the culture of a company is set early and is set by the leaders. Most small companies don’t have HR anyway, and by the time they add an HR leader, it might be too late to influence the culture much.

Culture is not foosball tables and free beer. A great office environment can help attract and reward the people you want to join, but the culture is set by how the company does its work, how it communicates, and who it recognizes and rewards.

Q. OK, makes sense. So what can a founding team do to make sure their startup has a great culture?

Although culture is hard to measure and hard to control directly, startup leaders can do some very tangible things to raise the change their culture is solid:

First, recognize that different companies need different cultures. An enterprise software company will need a different culture than a video gaming company or a medical device company. Think through what your culture needs to be to accomplish what your business is setting out to do.

Do some soul searching. The culture will reflect the founders’ and early employees’ personalities, so the founding team needs to think through how they can be careful to expose their attributes they want people to emulate and keep the ones they don’t under control. They need to discuss with each other the culture they want to build and make sure they are in agreement before starting the company. They need to talk about adding more co-founders or early employees to counter-balance their own personalities to get more diversity and shore up weaknesses.

Start early. Culture starts to develop the day the team starts working together. The team needs to think about it from day one, monitor it carefully, and build the culture deliberately. “We’ll fix it later once we are up and running” does not work.

Hire carefully. The biggest lever a company has to move its culture is who they hire. Startups should interview for cultural fit just as much as they interview for skill. They should check references carefully and ask those references questions about the candidate’s character and work style. Human nature is to hire people like ourselves, so the founders should reach out to a variety of networks to get more diversity of thought and background vs. simply hiring people they happen to already know.

Lead by example. Leaders are under a microscope. Very small behaviors, like what they choose to talk about, who they reward, and how they respond to feedback and criticism spread quickly and set the culture. The daily mood swings of company leaders can influence the culture, and even something as small as their body language can cause the team to react.

Don’t confuse your “actual” culture and your “aspirational” culture. Too many teams have an offsite, write down some cultural values, laminate it, then tell their team, “this is our culture.” The team then rolls their eyes, since the day to day reality of working at the company does not match. Instead be clear when you are talking about your aspirational culture and that you need to bridge the gap from your actual culture.

Manage it. When recognizing and rewarding people, don’t just look at performance against their job duties, but also look at their contribution to the culture. During 1–1’s, managers should ask questions about how the team is working together and building values the team wants to see. When gaps appear, managers need to work on solving them and not just hope they resolve themselves. In extreme cases you may even need to fire people who do something radically counter to the culture, especially if they disrespect a co-worker or customer.

Question it. As companies change, cultures need to change. What worked before may not work in the future, so the team needs to keep asking both if the current culture is working but also how it needs to change as the company grows.

Q. If I want to work at a startup, how should I consider culture?

Few things determine how happy and productive you are at work than the culture of the company you join. So if you want to work for a startup, do what our hypothetical startup joiner described above did: as you interview with the company, spend some extra time in the office, hang out with people, and ask a lot of questions.

And don’t join a company that isn’t also willing to invest that time. If a company wants you to make a decision about joining them based on a day sitting in a conference room interviewing, move on. It’s a company that isn’t thinking about culture and isn’t seeking candidates who are deliberate about finding a culture that is a fit for them.

Once you join a startup, look for ways you can positively impact the culture. Lead by example and represent the culture you want your company to have. This probably means facing problems head on, communicating regularly and widely, avoiding defensiveness and territorial behavior, and monitoring the culture to make sure it doesn’t drift in a bad directly as the company grows.

Most of all, culture is a living and breathing thing — it changes every day. A team can never completely control it, but they can be deliberate about the culture they want to build, understand the culture they have, and always strive to improve it, even when that means difficult or uncomfortable decisions.

Good luck!