...To Practice

 Fast forward 25 years.  We are living in an age of startups like never before.  Rapidly evolving technology, new problems to solve and new ways of accessing funds (whether VC or crowdfunding) have helped to create both an environment and economy where startups are bringing new and innovative products and services to the marketplace at breakneck speed.

At the start of each year, you can go online and research the "Top 50 Startups of 2018" or the "100 Best Startups to Watch Out for in 2019" or "The 25 Most Attractive Startups to Work For".  The lists are endless. 

There is another set of lists as well.  "153 of the Biggest, Costliest Startup Failures of 2018" or "5 Infamous Startup Failures" or "The Startup Graveyard 2018".  Obviously one wants to find their new venture on the former list, while avoiding the latter.

At the very outset of a new venture, there are some critical requirements that need to be in place for even the possibility of success to exist.  At the most basic level these include the ability to secure startup funding, confirmation that there is room in the market for a new player (that the marketplace isn't oversaturated), testing to determine if one's product or service is a competitive option, and having a viable business model.  

But this is only a partial list.  Of equal importance in long-term sustainability and viability is the more broadly defined 'creation of your organization'.  Its long-term values.  Its culture.  How it will be lead.  Decisions regarding who will be hired.  Not the skills, abilities and experience of potential employees, but the people themselves and their alignment to your new organization's values and culture.

Airbnb: Take Airbnb as an example.  According to Brian Chesky (CEO), one of the very first things he and his co-founders did was to establish a set of core values right from the very beginning.  The team consulted those values every time an important or difficult decision came their way.

This included important hiring decisions.  So much so that it took Airbnb over 4 months of combing through thousands of resumes to hire their first engineer, who was also their first employee.  Chesky later said that “I think bringing in your first engineer is like bringing in a DNA chip to the company.  It’s about prioritizing the right people over the temptation of scale and speed…". 

Netflix: Reed Hastings, CEO of Netflix, came to recognize the importance of organizational values and culture the hard way.  Sure, Netflix is famous for its 'culture deck' today.  Simply Google those two words and you will easily find this document (which I suggest you do) - a valuable reference tool that has been used by countless organizations since its creation.  But prior to Netflix, Hastings owned a different company - Pure Software.

Pure Software acquired many different companies while under Hasting’s leadership, including (at one point) the acquisition of three companies in a period of only 18 months!  While Hastings managed to integrate the business elements of these companies fairly well, he spent virtually no time on the cultural elements.  Needless to say, the coming together of the various different business cultures resulted in a less-than-positive result for the company overall.  According to Hastings he learned the hard way that “to succeed as you scale, you have to leverage every employee in the organization, and to do that you need to be very specific about how you craft the culture.”

Hastings took all of these lessons with him as he went on to create Netflix (and its infamous ‘culture deck’) and change the very way in which we consume television.

Uber:  Still not convinced of the ultimate importance of your company's values and culture?  Go online and look up 'Uber culture problem' and let the reading begin!  For those wanting a deeper dive into the details of what brought about this issue for Uber, I'll let you dig into those yourself online.  For those happy with a very short summary, here you go.

Uber's founder and CEO, Travis Kalanick, started the company with the hope and intent of 'taking over' the taxi business across many geographies.  It was a brash vision.  Kalanick believed that to accomplish this task Uber needed to hire employees of a similar nature - employees who were brash and saw themselves as ‘takers’.  This culture seemed to work….for a while.  But it wasn't scalable - it wasn't sustainable.  And it soon led to terrible results; not the least of which included staff departures due to an aggressive and sexist culture, the publication of a blog-post by a former engineer detailing allegations of harassment, discrimination and retaliation, and a #deleteuber campaign in protest of the company's culture and values.

The culture at Uber became so bad that in February 2017 the Board of Directors hired former Attorney General Eric Holder and his law firm to conduct a formal cultural review/audit.  The resulting 13-page report (available online) detailed 47 recommendations, all of which were accepted by the Board, and led to Kalanick taking a formal leave of absence.  A few months later he was replaced as CEO by Dara Khosrowshahi (Kalanick remains an Uber shareholder and board member).

Corporate culture changes slowly.  Uber has a long road ahead and much work to do on this front, especially for a company hoping to go public in 2019.  Uber itself was a great idea - a unique idea at a unique time.  If only Kalanick had thought beyond his great idea and also considered what kind of great company he could have created, much of this could have been avoided.

Putting It Into Practice

The above are but a few examples of the importance of corporate values and culture to the overall success of organizations - whether new or old.  As Collins and Porras state, the company itself is the ultimate creation.  If done well, it will stand the test of time and outlive today's trends, fads and technological limitations and continue contributing and thriving well into the future.

If you have begun a new venture and have been solely focused on your new product or service (your great idea), set aside some time to give thought to the kind of organization you are creating as well.  This doesn't need to consume weeks or months of your time and energy, but it does require your focused attention for a period of time.

Some quick steps for getting started:

1. Block off one full day for yourself and key team members (co-founders, leaders, senior management) to have a focused and thoughtful conversation about your company's culture.  This is not an operational meeting, therefore there should only be one agenda item for the day - what do we want/need our organizational culture to be for the long-term sustainability of our company?  The culture that will allow us to hire the best, retain the best and perform the best for years to come?  If you have any concerns about leading this discussion while also actively participating in it, consider hiring a professional facilitator for the day to assist with keeping it focused and on track.
2. Begin the day with the future in mind.  Fast-forward 5, 10 and 20 years. It is likely that your current 'great idea' will have at least changed somewhat, if not drastically or have been replaced with something altogether different.  With this in mind, what do you want for your organization in the future?  Regardless of the current 'great idea' (product or service), what do you want your company to be known for?  How do you want your employees to describe what it's like to work there?  How your customers would describe their experience?  What do you want your organization's reputation to be?  If there were to be a news article celebrating your 10-year anniversary, what would you want it to say (e.g. about organizational culture and values, leadership, the ability to continue to be a competitive player in the marketplace a decade on, etc.)?
3. Next, compare today with tomorrow.  Where are you today with regard to the broader creation of your company?  What are today's answers to the above questions and how much do they differ from what you want the answers to be tomorrow? Your product or service aside, how do your employees to feel about the company?  Your customers?  What is your reputation today - your culture and values?  What would today's news article say in comparison to that of 10 years from now?
4. Define and address the gap.  Are there significant differences in the pictures you've painted of today versus tomorrow?  If so, take the time to clearly articulate these in as much detail as possible and with as much honesty as possible.  Depending on what results from this discussion, a prioritization exercise may be required to help determine where to focus your efforts at the outset.
5. It is very likely that some of the gaps you identify will exist as a result of not having intentionally or consciously defined and designed your desired culture.  During the initial start-up phases of a new business, this is rarely an immediate concern.  Your team is small and more pressing issues need your attention.  If all goes well, your team is growing, your business booming and next thing you know….you have a culture. But not one that you have designed with intent.  It just sort of evolves by default.  This is no way to treat one of the most important aspects of your organization. When talking about culture, break the conversation down into two parts to begin: 1) Define your organizational values (core values as noted by Collins and Porras); and 2) Clearly articulate the behaviours that demonstrate those values.  In other words, your values and the way in which you expect and need those values to be lived on a daily basis.
6. As this is just the beginning of your conversation about organizational culture and values, take the work and ideas generated during this one-day discussion and consider testing them with those you trust.  Run your thoughts and ideas by other team members or friends and family whom you trust and who have your best interests at heart.  Those who know you well and who know what kind of an organization you want to create for the long-term - what kind of organization reflects your own values and standards.
7. Refine your thoughts/work based on these 'testing' conversations.
8. Finally, it's time to take this internally-focused discussion and make it visible externally.  Visible to all employees, customers/consumers, and potential new hires.  The most obvious way of making this public is to publish it on one's website and within PR/marketing/sales material, company communications and annual reports (if applicable).  But don't forget that it should also be fully integrated into your internal systems as well - systems related to recruiting and hiring, new employee onboarding, performance management and eventually, leadership development.

Once again, these are just some initial steps that can be taken to get you started.

If you would like to chat about any of them in more detail, please feel free to reach out!