So, Why Should Startups Care About Culture?

Organizational culture eats strategy for breakfast, lunch and dinner — Peter Drucker

Ganes Kesari
Dec 5, 2017 · 6 min read
Photo by rawpixel.com on Unsplash

Is an organisation’s culture the secret sauce that differentiates the best of companies from the rest?

From my experience of building and scaling organisations, I try and explain this here with an interesting parallel of a child’s growth.

We’ll trace the path to see how culture forms at inception, what decides its evolution and when it could turn so dangerous that it warrants its destruction.

So, what is Organisational culture?

No… all of the above may have short-term effects at best, but is unlikely to seep into the organisational culture, which is as deep as the human DNA. As a simple parallel, think of culture as equivalent to an individual’s character.

Character

Culture

Photo by Carl Heyerdahl on Unsplash

Having defined culture, let us now trace its path over time…

I. Forming a Culture

Surprisingly, the decisions taken by the founding team on whether to beg, borrow or steal to make ends meet, have repercussions much later. The core intent, ethos and actions are encapsulated and passed down, from a 5-member organisation to a 500-member one, many many years later.

Fred Wilson summed this well in his post on Cultural differences:

…the decisions a founder or founding team makes in the first few months of a company’s life are among the biggest decisions. They are setting their destiny in place, often without even realizing it.

II. Evolving a Culture

Simple ongoing decisions on how much the leadership trusts and empowers employees, the pains they take to make clients happy, how much they tolerate failure in the path to innovation, the integrity they hold while responding to difficult market forces: all of these have a profound influence on the entire organisation.

The leader’s actions are taken as the unsaid word and mimicked down the line, much like how kids emulate their parents or their role-models through life.

A leader must realize that with every small action taken in the apparent confines of one’s cubicle, he/she is actually playing out in the theatre of the company stage, in full glare of the entire organization and the employees.

Given that this is how culture incrementally gets shaped throughout the company’s journey, there is no effect of any lip-service emails or town-hall proclamations or business-review posturing, if leaders live and act to the contrary. Ben Thompson in his excellent post The Curse of Culture, sums it well:

…it can be argued that the only thing of real importance that leaders do is to create and manage culture; that the unique talent of leaders is their ability to understand and work with culture.

III. Destroying a Culture

Similarly, there are way too many failures of org-wide change initiatives, of teams rejecting new leadership, or of organizations imploding when a massive change seem contraindicated to its cultural DNA. Or non-traditional thinking is thrust upon it.

Just like individuals who must shed ill-formed habits before it grows monstrously to consume them.

With culture it is inevitable that organizations must reform in order to do a course-correction before its too late. And real change can happen only when its culture amends.

Here again, it is the leadership’s prerogative to bring about this change, by destroying a part of the very culture that they were instrumental to create and shape.

There’s this excellent example of Steve Jobs’ first keynote as interim CEO in 1997 after he got back for his second stint, wherein he announced Apple’s shocking partnership with Microsoft.

Years of Microsoft (and IBM) bashing by Jobs had seeped indelibly into Apple’s culture, and with Apple fighting for its survival and badly needing a lifeline, the same leader was now destroying this very trait.

That this was considered sacrilege by die-hard Apple supporters was amply demonstrated by the audience who booed so loudly that Jobs had to stop speaking. Looking back, this was such a marked departure from the fanboy response he received in his later keynotes.

But this was considered a brilliant leadership move by Jobs to slay the culture dragon that he had raised over the years, and which had then turned destructive to the extent of sinking the company. Ben Thompson continues in the same post:

…it is an ultimate act of leadership to destroy culture when it is viewed as dysfunctional.. This ability to perceive limitations of one’s own culture and to evolve the culture adaptively is the essence & ultimate challenge of leadership.

This is the most difficult task of all, since it requires slaying of the internal demons that have been lovingly nurtured as pets, over the years.

Photo by rawpixel.com on Unsplash

Summary

In conclusion, culture is THE secret sauce of organizations

Culture is that part of a business plan and system that is essential to not just make them successful and stand out in the market place, but is crucial for their very survival in the longer run.

Much like an individual with an impeccable character, an organization primed with the right culture can charge-up the rank and file, unleash an unstoppable internal force and become a rising tide that can go on to conquer the world.

This article was originally published on the Gramener blog.

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Ganes Kesari

Written by

Simplifying data science for business decision-makers; Co-founder & Head of Analytics, Gramener | Speaker | https://gkesari.com

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