Why Does a Startup Need a Culture Code? And When?
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"We are excited to spend several hours to create our company's culture code," are words you will not expect any young startup employee to say. Yet, that is what everyone at your startup can say. And in 4 hours, they can actually create an aspirational yet practical code to live by. This article tells you why you should do this, the process you can follow, and the outcome you can expect.
Why Should You Define Your Company’s Culture?
Business literature and successful leaders talk nonstop about the importance of company culture. Knowledge workers are jaded from their corporate experience and do not believe that some words on a wall determine success. Nonetheless, every company has a culture that emerges from how everyone behaves, what they care about, and what they reward or punish. The founder and CEO of Airbnb says that culture is a thousand things done a thousand times. It is how a team behaves even when no one is looking. Regardless of how they are in their personal life, culture dictates how they will behave at the workplace with each other, vendors, partners, customers, and other stakeholders. For this reason, it is important to pause, reflect on what your company is really about, and actually write it down so it is known to everyone in your company.
The Right Time to Define the Company Culture
It is no surprise that how you run a startup changes as your team grows. A good rule of thumb is to change our approach when your team size crosses specific thresholds - 10 employees, 25 employees, 100 employees, 500 employees, and so on. Each stage roughly corresponds to the addition of a management layer or department. Early team members get a lot of facetime with the founders and absorb their behaviours like a sponge. As the team size crosses the thresholds mentioned above, it becomes harder for founders to spend time with the team and a well-documented culture document becomes more and more important. It is recommended to define our culture when you cross 25 team members.
Common Pitfalls of Company Culture
The most common mistake companies make with their culture is that they do not have a clearly documented culture code. Founders and early team members assume that everyone knows what is expected or will take the initiative to find out. The reality is that as a company grows, new team members learn from the 5-10 people around them. If those 5-10 people do not know the company culture or believe in it, the new team members will be the same way.
Just as common is the mistake of creating a culture code that is nothing like what people do on a daily basis. This is usually the result of an executive offsite or a small group of people dreaming about what they want to be but forgetting what they actually are. Handing down a tablet with 10 irrelevant commandments is as ineffective as not having a culture code at all.
The last mistake is assuming that people will follow a culture code just because it exists. Human behaviour is hard to change. Most of us are lazy, especially when it comes to changing habits and prejudices. A good set of culture principles are useless if they are not accompanied by rewards for adherence to the culture and reprimands for failing to do so.
The Process of Creating Culture Code
Start with the People Who matter
Every company cares about certain types of people, its stakeholders. Company culture should keep these people in mind because our actions and decisions affect them. Start your culture code process by listing these groups of people for your company. It is important to take a broad view of the stakeholders. After all, families, neighborhoods, and the global community are all touched by your work.
For example, the people who matter to Amazon's e-commerce business could be employees, sellers, buyers, and partners. For Airbnb, it could be employees, home owners, guests, and neighbourhoods.
For most startups, 3 groups of people matter - Self, Team, Community. “Community” includes everyone from customers to the startup ecosystem to the larger communities on whom you rely. Your culture code should remind you to prioritise these groups in this order. Charity, as they say, begins at home and everyone in your team should begin by working on themselves before the team they work with and the community in which they operate.
Brainstorm the Right Way
It is recommended that you create your culture code democratically. With a large team, this can mean that not everyone will contribute, the loudest voice will drown out others, or the smoothest talkers will win. You should use a combination of brainstorming and competition to solve this problem.
Start by splitting into 3-5 groups with equal representation from all departments. Have everyone write down ideas individually then discuss with their group. Each group should spend an hour to come up with a list of culture principles. Groups should then present to each other, debate each point, and narrow down the list. The groups should split up again and make the final list of principles. Repeat the group discussion to come up with the final principles for your culture code.
Coming up with Specific Principles
Finding the right guiding principles for a company is an art. Ensured the success of your exercise with these simple steps.
Look at the culture code of companies like Amazon and Netflix. They are very well thought out and their teams live their culture every day.
Think about the behaviours you already exhibit. It is easiest to create a culture code from what most of you already do.
List down aspirational qualities that you want to have. This holds you to a higher standard and lets individuals uniquely contribute to the code.
A Sample Culture Code
Below is an example culture code that you can use as a guide for your startup. Each principle has an accompanying emoji that is a visual representation of that principle. This makes it easy to remember and use in daily conversations.
1. Strive to be better every day
2. Move fast
3. Do exceptional work
4. Set and achieve audacious goals
5. Be honest and transparent
6. Win with your team
7. Make customers your North Star
8. Imagine a better future and create it
9. Pay it forward
The thought behind cool-sounding one-liners can be lost or misinterpreted so you should add details for each principle. For example, the behaviours for "Strive to be better every day
Have a Growth Mindset - Believe that anything can be achieved through hard work.
Love Learning - Be curious about how things work and keep learning.
Sharpen Your Skills - Learning is an iterative process. Keep at it.
Approach Obstacles With Positivity - Be resilient when faced with challenges.
Living Your Culture
Your culture code will be the result of several hours of discussion between your team members. The biggest win will be if most principles are things you already do daily. This, more than anything else, is a strong predictor that you will actually live by your culture code. Otherwise, no amount of T-shirts, posters, mugs, and calendars will make the culture code a reality.
How can you ensure that new team members also live your culture? Below are a few things you can do.
Publish culture principles on your website so potential candidates know what you stand for.
Talk about your culture during on-boarding and feature it prominently in employee handbooks.
Use the culture code in decision-making and conversations. Emoji are a great way to do this.
Reward employees who live up to the culture code and reprimand those who do not in performance reviews and salary appraisals.
Culture is one of those touchy-feely concepts that we know is important but are not quite sure how to tackle practically. We hope this guide emphasised the importance of a culture code and gave you tactics for creating one for your company.