When to Define Company Values
By Carter Cleveland, Founder & CEO at Artsy
When running a startup, there are always urgent business priorities that need immediate attention. At the same time, failing to define values can lead to compounding culture debt and negatively impact every part of the company.
Deciding when to define values is a tough judgment call a company’s leadership must make. Day one is likely too early; after a company has scaled rapidly to thousands of people is likely too late.
Industry examples
Netflix began working on their values after their IPO in 2002 at ~120 employees, although they didn’t release their famous Netflix culture slides until seven years later in 2009. Zappos defined their values six to seven years in and finished when they were around 200 people (although Tony Hsieh says that if he could do it over again he would have done it on day one). Facebook began defining their values in 2008/2009 when they had over 400 employees (although Zuckerberg had written down a list of “what it means to be us” as early as 2006). Larry Harvey defined Burning Man’s 10 principles in 2004 only after the event had scaled to tens of thousands of people and regional events.
Apple is a notable exception for never defining its values explicitly. However, their values are implicitly defined by every marketing message and every product they put out. Anyone can tell you that Apple stands for simplicity, secrecy, attention to every detail, and an emphasis on the human experience of their products as opposed to their technical specifications. In many ways, Apple is the ultimate values-driven company, to the point where values are imbued into everything they do — something to aspire to, but not count on.
At Artsy, we defined our values several years in, at 70–80 employees. In our case, we kept a Google Doc with a living draft of what we thought our values were that we’d return to and update periodically every 3–9 months or so. By the time we began our values definition process, the values written in that document, while not final by any means, felt more stable and representative of the larger team. We believe it’s a good thing that we waited until we did to define our values, or they could have come out in too nascent a form, and might not have been as relevant and well-adopted.
We also were able to get away without defined values for as long as we did because we were so rigorous about hiring. However, we also knew that it would have been costly to wait longer, as our business had started to grow rapidly. Ultimately the decision to define values has to weigh the benefits and costs.
Before you get started, ask yourself…
WHAT ARE YOUR GOALS?
If you are seeking to sell your company or spin off its intellectual property in the next few years, then building a strong culture is less important than if you’re building for the long term.
HOW STRONGLY ALIGNED IS YOUR CULTURE TODAY?
The less aligned it feels, the harder it will be to define values and pay off culture debt down the line and vice-versa.
IS YOUR TEAM ON BOARD?
A risk of defining values too early is that without time and space to gestate, a company’s values may simply end up reflecting the founder’s personal values at that time, and not necessarily the company’s values.
You may also want to wait until you have most of your major departments represented at the company as they will allow you to see your culture through a different lens and notice things you didn’t before. For instance, at Artsy “Openness” went from being something we agreed with to becoming a core value largely due to the influence of our CTO and engineering team in making open-source a part of our culture.
ARE YOU READY TO SCALE?
Be aware that culture debt creeps up on you faster than you expect. Humans did not evolve an intuition for the notion of compounding growth. Like technical debt or financial debt, culture debt often catches companies by surprise. If you feel a large growth phase coming up, or you’re already in the midst of one, now may be a good time to create space to define values.
WHAT IS YOUR FINANCIAL SITUATION?
If you’ve got a short runway then your energy should be focused on extending it. Having money in the bank and ideally growing revenue gives your company the mental space and freedom to do such a long-term, focused exercise properly.
In Summary
With all this in mind, our final recommendation is to at the very least immediately write down what you think your company values are today, and return to that document periodically to re-evaluate and make updates as necessary. Over time you’ll notice the document’s rate of change starts to slow and meta-values may emerge that are less prone to change. This is a sign that you’re on to something and it may be time to invest in a full definition process.
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