Why Culture Is at the Core of Successful Startups

You could have the best idea, the most funds, and a faulty culture could mean the end of your promising startup

Not enough entrepreneurs consider, at least in the beginning, how to build the right organizational culture. Some entrepreneurs prioritize the idea, the product, or the technology. Others pump up the volume on sales, social media, or e-commerce. All of those things are important. What can trump almost everything, however, is culture.

The underlying beliefs, values and behaviors that make up a company’s unique social and psychological environment can mean the difference between winning and losing. Why? A winning organizational culture creates a positive employee experience where individuals are more engaged in, and passionate about, their work.

A highly collaborative, agile, high performance culture that nurtures creative problem solving and open communication is ideal for a startup, but to have that, everyone on the team has to walk the same walk. That idea of collective action, of cultural synergy is so important, my Michigan-based cannabis company Six Labs established a set of 10 core values. Then we matched them to each one of the founders to ensure we could: align around a shared vision, mission, pull together like a family, and foster a sense of ownership, inclusion, accountability and responsibility to carry us through the rough times — and at some point, almost every new business will experience rough times.

Define culture early

A family-oriented culture promotes the idea that people should willingly chip in where needed, and knuckle down next to their teammates to get things done. That’s gold in a startup where people may have to wear multiple hats, or work non-traditional hours or in different environments as project needs demand. This kind of behavior should naturally permeate throughout the workforce ranks.

Family, excellence, and environment are among the most important aspects in a productive and enjoyable startup culture. Excellence speaks for itself: The startup should prioritize quality, continuous improvement, high production value, consistency, professionalism. These ideals impact the workforce as well as the company’s brand and positioning in the marketplace.

The cultural environment is a bit more nebulous in that it refers to internal as well as external factors. Meaning, internally leaders must create a positive, transparent, and safe workplace, and externally, they must ensure the company’s footprint is as small and sustainable as possible. Consumers are increasingly sophisticated and aware of the inner workings of their favorite vendors and service providers, and sustainability is important to them.

But above all else, this cultural dynamic should be set from the beginning. Employees should be able to tangibly see the expectations leaders have for their behavior and work product. How? Leaders should demonstrate them. Is agility one of your startup’s cultural pillars? Then everyone from the new hire, to the intern, to emerging leaders should see leaders listening to feedback, assessing data, and then with reasoned steps, pivoting to make near real-time market changes.

I’ve started many companies that went nowhere not because the idea was bad, or the funding wasn’t there, but because the team was faulty. The members couldn’t pull together. They were there for the wrong reasons, or their expectations were skewed, or they simply weren’t fully aligned behind the mission and vision of the organization. Why? We didn’t do the work upfront to set the right tone, the right culture, and those in leadership may not have been consistently demonstrating the actions we wanted to build a business on.

Now, obviously, culture is not a one and done activity. Your startup culture should evolve in lock step with the company. It should be continually examined, refined, and nurtured. Leaders should not be afraid to hold up a critical lens to analyse the company’s shortcomings. Whether what you see through that lens is good or bad, it will help you to operate ethically, build and nurture critical relationships, and prioritize the business’ interests holistically.

Beware bad leadership

New startups often make key mistakes when it comes to leadership and management, both of which are key factors for an organization’s cultural health. These mistakes aren’t specific to the startup environment, but they can have a harsher impact because when the company is new, it’s culture is also new. When things aren’t firmly established there is less room for error, there are often fewer resources, etc.

The problem is usually that leaders are either too strict and micro-manage, or they’re too trusting and hands off, and when things go off the rails they’re surprised. Ideally, you want to be somewhere in the middle, and you always want to take accountability when things go wrong. It should be standard leadership practice because executive behaviors cascade throughout the organization. The culture will live and die by them.

So, no matter who made the mistake, it’s the leaders responsibility to solve it. There can be no passing the buck or playing the blame game. The goal is to find a solution, as quickly as possible, and then prevent the same mistake from happening again.

Startups can rarely afford protracted bouts of drama. Even if they can’t believe how stupid the mistake was, leaders must look ahead to the solution. What’s the fix? What’s the next move? How will we pivot? That’s where the focus should be.

For instance, say the startup has a brilliant team member who’s an expert salesperson, but has a problem getting up early — this may or may not be true; I’ll never tell. If a leader charges that individual with representing the company at an early AM client meeting, and he or she screws up, the blame will fall squarely into the leader’s lap because he knew there was a possibility the sales whiz would fall down on the job.

Business is no place for ostrich syndrome — not when it comes to leadership or the importance of building an agile, collaborative, performance-based startup culture. Consider:

• Culture should not be taken lightly. It should be set early, consistently nurtured, and routinely, critically examined to ensure it doesn’t have a detrimental impact on the business.
• Leaders bear the majority of the responsibility for setting cultural norms and sustaining them. Don’t shirk this duty if things get hairy. Embrace it. It’s among the most important tasks you’ll have.
• If you take culture lightly, or don’t actively set the tone and behaviors that drive the underpinnings of your organization, norms may develop that you may not like.

Take charge. Leaders should decide what they want their organization’s culture to be early. Then brick by brick, build that culture, and nurture it.