Why Culture Is Everything For Successful Startups

Healthy company cultures are all about building and maintaining relationships

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Startup founders have a million things to worry about, from raising funding to building out a stellar team to simply keeping the lights on for another day. But amid the flurry of daily activity that consumes founders’ attention, they should never lose sight of their long-term goals – particularly the development of a healthy and sustainable company culture.

While a strong and healthy culture certainly does not guarantee success, for successful companies, culture is everything – it establishes the internal expectations and norms that employees observe, informs how companies approach their relationships with customers, and determines what their values are. A company’s performance is inextricably bound to its culture. If corner-cutting, disrespectful interactions, and other pernicious behaviors are tolerated early on, they will soon become evident in negative customer feedback, high rates of turnover, and so on.

Note the words “early on.” When it comes to cultural development, startups have a distinct advantage over more established companies – they aren’t weighed down by bad habits and practices that can take hold over time. Instead, they have a unique opportunity to develop the right culture from the ground up by agreeing upon – and sticking to – a core set of principles and ensuring that they have employee buy-in right from the start.

Don’t put off difficult conversations

While companies often emphasize “core values” like diversity, accountability, and transparency, the culture of a company is more than a list of vague ideals on its website – it’s alive in the day-to-day behaviors and attitudes of every single person in the company. Although there are many ways to reinforce positive behavior and maintain cultural norms over time, it’s crucial to unambiguously establish those norms at the beginning.

This often requires candid discussions that may be uncomfortable or even contentious. There may be certain non-negotiable policies that you want to address immediately: What’s the company’s attitude toward punctuality? Working from home? How about office romance, professional attire, or feet on desks? Then there are more fundamental issues: How are employees expected to interact with each other and customers? What will the company do to facilitate open dialogue and accountability? While it may be awkward to discuss some of these issues, honesty is the best way to generate the trust you need to perform at the highest level as a team.

According to a 2019 survey from the Society for Human Resource Management, companies have spent $223 billion on “turnover due to workplace culture over the past five years,” while one-fifth of employees have “left a job due to workplace culture.” These statistics are stark reminders that your culture can have a dramatic impact on the health of your company. By being transparent about that culture at the start, you’ll ensure that your colleagues know exactly what to expect, which will prevent serious problems from arising later.

Find the right people

Startups simply can’t afford to hire the wrong people – with smaller operations, everyone’s role is pivotal to the success of the company. However, many of the best potential recruits (particularly those with specialized skills that founders often lack) come from large corporate environments that are drastically different from the startup world. They may not be comfortable with the unpredictability and lack of structure inherent to startup life, and this can create stress and tension with other employees.

When you have a high-growth startup, you’re under tremendous pressure to get qualified people in their new roles as quickly as possible. But you still have to carefully assess whether candidates are a good fit – are they excited about your vision for the company? Do your values resonate with them? How much do they know about your story? These personal questions can help you separate candidates who are genuinely committed to your mission from candidates who just want to make a pile of money at the new “hot” company.

The onboarding process shouldn’t just be quick and easy – it should introduce new employees to the company in an engaging, consistent, and deliberate way (hint: do away with the PowerPoint slides). A recent Gallup report found that just 12 percent of employees say their companies did a “great job” with onboarding. This is because onboarding plans are often dry and impersonal, which prevents new employees from connecting with the company.

Founders and managers should do their best to engage personally with new employees, and everyone in the nascent company should be involved in the process. You should always remember that onboarding isn’t just a logistical exercise to get employees acclimated to a new environment – it’s an introduction to your culture.

Create a culture of trust

Your culture is what holds your company together, and trust is what sustains that culture. For example, trust is necessary to have the difficult conversations that set expectations and establish what type of culture you’re trying to create. When colleagues know they can speak freely and without fear of reprisal, you’ll have a more open exchange of ideas, which leads to greater innovation and less workplace enmity.

Trust also leads to performance. According to a study in the Journal of Economic Behavior & Organization, when employees have high levels of trust in their managers, a company’s financial performance, productivity, and product/service quality all increase.

But trust isn’t just integral to the relationship between employees and managers – it’s also vital for managers to trust one another. This is why it’s necessary to put together a leadership team as early as possible. The members of this team should represent the core functions of your business (such as product development and sales/marketing), not necessarily all the founders, and they should always have the company’s best interests in mind – not just their own departments. By breaking down these silos and focusing on a single coherent vision, you’ll create a sense of solidarity among your managers and keep them focused on what’s best for the company.

Healthy company cultures are all about building and maintaining relationships. From the relationships founders have with their initial leadership team to the relationships between managers and other employees, it’s important to set the right precedents at every level of the company as early as possible. When you do, a strong culture will follow.

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