As your startup grows, it’s essential to be able to entice the best and brightest to come and work with you. This makes a healthy startup work culture incredibly important.
A positive company culture not only encourages people to come and work as part of your business but also inspires them to be innovative and work hard.
Conversely, the only thing a negative company culture will inspire staff to do is to look for another job. So, how to set up a startup work culture?
The current article is an addition to 10 Startup Mistakes that we’ve published a couple of weeks ago. In this article, we will look at the importance of strong startup work culture, and how you can ensure any business you build is one that people want to work for.
What does ‘startup work culture’ mean?
“To win in the marketplace, you must first win in the workplace” – Doug Conant, CEO of Campbell’s Soup.
A startup work culture is how your business’s vision, goals, and values inspire people in the company to act and behave. It is one of the first impressions that your business gives to potential business partners, prospective employees, and possible investors.
Startup work culture vs corporate work culture
Actually, it is quite hard to answer the question “How to set up a startup work culture?”, as it is generally different from that of a business that has been around for several years. Some of the reasons why startup work culture is so different includes:
- Size. Startups are generally much smaller, which can mean that the decision-making process is different;
- Money. Startups may not have a lot of money, especially if they are bootstrapping or have not got investment yet. This means that they may have to look at more cost-effective ways of retaining staff and encouraging them to do their best;
- Flexibility. As startups are more dynamic, there is more of a focus on innovation and creativity;
Many people think startups are more laidback than long-established businesses. However, this isn’t necessarily the case and can depend on the type of business and the personality of the startup founder.
Zappos – a prime example of a perfect startup culture
Even though shoe retailer Zappos has been around for over twenty years. It still has a solid startup culture in place, with a strong focus on building relationships with customers.
All staff, no matter what job they have, work in the company call center for the first month so they can practice giving good customer service. New employees are offered $2,000 after the first two weeks to weed out any people who don’t want to be there or are only there for the money. Zappos even ask the driver who took the person to their interview if they were nice to them.
As Tony Hsieh, the CEO of Zappos says: “Our number one priority is company culture. Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own.”
Would this workplace environment be ideal for every new startup? No, as no two startup work cultures are alike. However, it has worked for Zappos and ensures that staff is dedicated to providing high-quality customer care.
How to create the perfect work environment
“Startups have a unique ability to create a culture of compassion that helps us improve and in so doing, we are more likely to make a difference in the lives of others. It’s possible to build a business, help people, and enjoy our work.” – Biz Stone, Co-Founder of Twitter
When many entrepreneurs create their startups, defining the company culture is generally not at the top of their list of priorities.
However, thinking about the kind of business that you want to be early on means that it will be easier to build your work environment and culture. It is much harder to create a stable workplace environment when you already have a team of staff in place.
Here are some of the ways that you can begin to understand the startup work culture and relay this culture to employees.
Know your purpose
Knowing your startup’s purpose is the first starting point in knowing what your culture needs to be like.
Of course, we all want to make money from our startup and live a comfortable life, but your business purpose needs to be more than that!
For example, let’s say that you are creating a mobile app for local people to give away food that they won’t use. You could say your joint purposes are to prevent food from going to waste. What’s more, you are helping people who may not be able to afford healthy food eat well.
According to Deloitte, companies with a purpose have 30% higher levels of innovation and 40% higher levels of workforce retention than those that don’t.
Define your values
When you know what your purpose is, you can use it to determine what your company values need to be.
Your company values are the principles and beliefs that your team needs to share in order to guide your business towards its key purpose.
Your list of values can be as short or as long as you like, although we’d recommend keeping them brief, so it is easier for people to follow them!
As an example, Netflix has five core values which it lists on its careers website. These are:
- Encourage independent decision-making by employees
- Share information openly, broadly, and deliberately
- Be extraordinarily candid with each other
- Keep only our highly effective people
- Avoid rules
Once you have your values, you need to communicate them with your staff. Hold a meeting to introduce them to your team, factor your values into your onboarding process for new employees and promote them across your building.
Hire the right people (and fire the wrong people)
When you know your values, you can identify the people who will be a good match for your startup.
When hiring people to work at a startup, it can be tempting to hire people that are similar to us – this is known as ‘looking glass bias’. This can be dangerous as it can lead to a company culture where everyone looks, thinks, and acts the same. Hiring people that are identical can result in an echo chamber which can cause your startup to stagnate.
By hiring with values in mind, you can recruit people that will grow the business and be a good fit for the company culture but still have different experiences and strengths.
Put your values on your vacancies page so prospective employees can see if they will be a good culture fit for your startup. When interviewing people, ask them questions so you can see if they understand your values, and can apply them to their everyday lives.
As well as hiring for values’ you may also have to potentially look at ‘firing for values’. If you recruit someone who is not in sync with your company culture, you will have a potentially tricky decision to make.
If they aren’t willing to change the way they do things, it may be easier to let them go.
Foster a strong startup culture
Now that you have the right people on board, you need to work hard to create a positive workplace culture. Everyone needs to be involved, from the co-founders through to the marketing interns!
Here are some of the ways that you can do this:
- Lead by example. As a founder, you need to live and breathe your company values. If you don’t, staff will quickly complain that there is one rule for them, and another for the leadership team. So be sure to know your values off by heart!
- Communicate openly with staff. Let them know what is going on within the startup and what you need them to do. Remember that communication is a two-way street, and give them the means to talk to you about their questions, ideas, and concerns too;
- Put a feedback system in place. Give staff the opportunity to offer feedback, both positive and constructive. Also, regularly book time with your team to review their performance and listen to what they have to say;
- Care for your staff’s welfare. Stressed, angry, or upset staff will quickly experience burnout. Take the time to show genuine concern for your team and the issues they may be experiencing. It could be the difference between them staying and them moving on to another company;
- Help your staff to grow. Richard Branson famously said: “Train people well enough so they can leave, treat them well enough so they don’t want to”. Supporting and nurturing your staff will not only encourage them to stay but give them the confidence to move into more senior roles as your startup grows larger;
- Say “thank you”. People want to receive recognition when they go above and beyond. Give staff credit when a job is well done, whether it is an email acknowledging their hard work or a small token of your appreciation. Promoting from within is also a great way to show that hard work and loyalty pays off;
- Be flexible. Workplace relationships are all about to give and take. If you provide staff flexibility, they will return the favor in the future. Offering flexible working hours and home working can make staff happier in their roles and more likely to commit to their work.
Review the way you do things in the future
Workplace culture and trends change over time.
For example, take-home working. In the UK, only 4.7% of people worked from home in 2019, but during the pandemic, this figure rose to 43.1%!
It’s essential to regularly review your workplace culture to see if it still reflects your company values. This is especially important if you hire a large number of people in a short amount of time.
The ‘cultural chasm’ and how to avoid it
This is when a startup experiences rapid growth that can cause staff unhappiness, as well as conflict between new and veteran members of the team.
Founders are often so busy dealing with the sudden growth of the company, that they no longer have the time to spend on ensuring the workplace environment is effective.
Fostering a culture of transparency and encouraging staff to speak up if they feel something is wrong, can help businesses get out of the chasm.
Thankfully, the cultural chasm is a short-lived phenomenon, with years five to six seeing a massive improvement in a startup’s culture.
In summary – don’t treat your work culture and employee relations as an afterthought
Workplace culture is not just about table football, beers on a Friday afternoon, and unlimited leave. It’s so much more than that!
A work culture that encourages people to communicate fosters trust and rewards them for the work they do will have advantages for not only employees but your business too.
If you are looking to build your startup’s culture, begin the process as early as possible. Knowing your purpose and values will help you hire the right people from the start, fostering innovation and encouraging staff retention as you grow.
Looking for someone to help you build a strong startup work culture? Build it with You Are Launched
You Are Launched has been working alongside lean startups, accelerators, and venture capital companies since 2014.
We help build startups from the ground up, so if you are looking for help and advice to fine-tune your work culture, our experienced team is here to offer support.
Contact us today and find out more about how to build great relationships with the people working in your business.