Updated: Nov 30, 2022
Recently I was at a roundtable event with a bunch of biotech founders and the topic of company culture came up. One founder said: “If you have to write down your culture, it’s broken. Culture should just be.” Another founder said, “Yeah, I just hire people who ‘get it.’” And yet another said “I only hire people I’d want to be friends with.”
The conversation went on and I found myself silently fuming. There was so much I wanted to say and I didn’t get to, so I’m going to take this opportunity now to share with you the rant I’ve been perfecting in my mind ever since attending this event with these “culture non-believers.”
Let’s start first with a working definition of culture: Culture is how we agree to behave at work.
Lots of people think it's just about putting Foos ball tables in the break room and having hipster office decor - but it’s not. Culture is about our conduct and our values - how we behave while achieving our business goals. It’s an agreement you are making with the people on your team about what is appropriate behavior at work. When facing crossroads decisions, your company values should be driving everyone in the company to have a similar framework about which direction to pick - for example: is speed or accuracy more important here?
Here’s why culture matters in an early stage startup:
Culture can be ripe with bias. If you aren’t specific about articulating what values are important in your company then you are just using gut feelings to weed out people who are different than you and it’s full of discrimination. I didn’t make this up. There’s tons of literature and research on this, like
This article “How the Best Bosses Interrupt Bias On Their Teams” HBR, Joan Williams
This article “Your Unconscious Bias Trainings Keep Failing Because You’re Not Addressing Systemic Bias” Forbes, Janice Gassam Asare
This article “Is Company Culture a Cover for Unconscious Bias?” Inc, Mark Newman
And on top of being in opposition to diversity, equity, inclusion, and belonging best practices (DIEB) using your gut to evaluate culture makes your company liable for lawsuits if anyone feels that was employment discrimination at play. For example, in 2021, there were $385M worth of discrimination lawsuits in the United States alone.
You have to name your culture so that you are being specific about what it is that you mean. Identifying your shared values is an alignment process with your team.
Are you humble? Joyful? Curious about learning? Ridiculously serious about results? You have to put words to it and agree. These words help you design a thoughtful and rigorous hiring process so that you can be deliberate about how you surface if a candidate’s values are in alignment with yours. What experiences might someone have had in their life if “resilience” is a core value? Maybe you want to ask a question in your interview about sharing a time in which you faced an obstacle and persevered?
This is why I encourage folks to create a working draft of their values as early as possible - so you can have a framework for evaluating candidates during the hiring process. Does your team need to be collaborative to get anything done? That’s a value. Do you hate it when individuals take credit for group accomplishments? That’s a value. You can always modify and change this document as you evolve, but it’s so important to have words that the team shares about what behaviors are valued. It’s an alignment process to write them down.
That way, once you name them, you can use a hiring rubric to be specific in your process about surfacing experiences that will help you evaluate whether or not someone might be a good fit for your team.
Another reason why naming your values is important: you need language to give critical feedback, to course-correct unwelcome behavior, and ultimately fire people whose behavior doesn't align.
I’ve helped lots of startups fire lots of people. After all, one of the most powerful levers you have to think big and deliver on your goals is your talent - i.e. the people on your team.
If you don’t have the right people, you won’t get very far. I’m a big fan of Jim Collins, author of Good to Great, and he states that you’ve got to the right people on the bus, get the wrong people off quickly, and then figure out where everyone sits.
After helping CEOs fire lots of people, I’ve observed that there are basically two common reasons why people get fired:
Work performance: The work product is not meeting expectations. This person is not doing enough of the right work or not doing it fast enough or of high enough quality. Essentially: something isn’t working related to WHAT they are doing.
Culture misalignment: The person is saying or doing things that are getting in the way of business goals. There’s something about the person’s behavior that is not in line with the team’s values. Essentially: something is not working related to HOW the work is getting done.
Here’s the thing: we set Objectives and Key Results (OKRs) as a way of aligning about performance - i.e. WHAT needs to get done. In our key results we are making an agreement about who does what, by when, and what success looks like. Our key results are specific and measurable so there’s no debate about what needs to be done.
With culture, you need a similar process. Sure, we’re at-will employers in the US, however - as discussed previously - the company is liable for lawsuits when people lose their jobs and feel there was discrimination at play. At an early stage startup, your reputation is one of your most critical recruiting tools. If you have a bunch of furious ex-employees out there in the ecosystem telling people that the folks at Fill-in-the-Blank Startup are total jerks then you’ll find it quite hard to attract the top talent you need to reach your goals. Especially if you are recruiting from a narrow technical field where lots of people know each other.
You always want to take the high road when firing people. I like to call this the “Michelle Obama Approach” based on her “when they go low, we go high” strategy in the 2020 election. Going high means being thoughtful and clear with a paper trail to cover yourself that there were concrete reasons why this wasn’t a match. Consider using the Critical Feedback Formula to ensure that you are being professional and measured when having these types of conversations. Consider deploying Performance Improvement Plans as well so that they are aware that whatever they are doing (or not doing) is not working to the degree that their employment status is now at risk.
My point here is: you can’t talk about what isn’t working if you don’t have your culture and values written down somewhere.
You need them to be on your website, they need to be integrated into your hiring, you need to train people about what they really mean during your onboarding processes. Your articulation of values and culture needs to be woven into daily life during the entire life cycle of employees at your company. Consider doing a culture mapping exercise where you explicitly design communications, benefits, policies, events, and awards to provide effective redundancies for everyone on your team.
I could go on and on here, but I think you get the point. Culture and values really matter. 46% of job seekers state that culture is a critical factor in deciding to accept a new job and a culture that attracts top talent can lead to 33% more revenue for your company. You can’t just hire your friends and say that my team just “gets it.” Hopefully by now you understand that this is pretty naive thinking and that the research absolutely does not back this approach up one bit.