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Developing a good culture takes constant vigilance

GrantTree now has twelve, soon thirteen employees. The culture is (currently) great, I believe. People are generally happy to be there, and they're beginning to function as a group rather than a collection of individuals.

One of the many things I learnt along the way - one of the few things which I'm certain enough of to be willing to write an article about it - is that building a good culture takes constant effort. It doesn't just happen. It takes consistent, deliberate effort, every day.

A good culture?

Perhaps it's worth defining what the hell a good culture is, before we go deeper. Every company will have its own definition of "good culture" that will be different, but we can make a useful first stab.

Here's a simple definition of a "good culture": a company with a "good culture" is not a shitty place to work.

By contrast, most companies are terrible places to work, for a lot of reasons. They have incompetent managers, rules and processes that don't make sense, arbitrary restrictions such as strict working times ("if you come in at 9:01 you're late and you will get a bollocking") or limits to what you're allowed to be working on ("You're an analyst programmer, you're not allowed to go and work on sales stuff"). A simple barometer: if working for a certain company would make you miserable, then at least from your point of view they have a bad culture. Perhaps one of the reasons entrepreneurs hate working for most other companies is because they have a very strong sense of culture.

Many people can put up with bad culture. They accept it as a given parameter of this thing called "work" which sucks anyway. But many entrepreneurs are likely to quit even their own successful businesses (or scale them down dramatically) when the culture goes bad.

Bad culture is the default

Unfortunately, despite this very strong sense of culture, the default company culture you end up with is still a bad one. As a couple of examples, I'll offer up the culture that Tony Hsieh, a master of culture-growing, ended up building in his first business, LinkExchange. From the sound of it, it was a bad place to work - and he no longer wanted to go to work in the morning. So he sold the company. This is not a rare story. Another way this occasionally unfolds is that the entrepreneur will wake up one day, realise the company they've created is not a place where they want to work, and start scaling it back down to just themselves in response. As a second example, GrantTree was on a path towards a bad culture this summer, and this was averted because one of our employees gave me a kick up the ass by pointing it out very bluntly. If not for her, we'd probably be even further down the path of building the kind of company that I don't want to work at.

The reason for that, I believe, is that by default, if you don't make an active choice to do something different, you will naturally end up doing what everyone else does. And as I mentioned earlier, most companies have a bad culture. If you don't make frequent, deliberate, often courageous efforts to push for the kind of culture you care about, you will build a company that's just like every other company out there.

That's what I mean by good culture requiring constant vigilance. It's not a case of "letting things slip once" - you can always take corrective action, as GrantTree did. But if you let things slip too far into the wrong direction, then you may find that the cultural inertia of your company makes it impossible or just too much effort to change. At a size of 12, of course, change is still possible, but what if we'd realised this only after we reached 100 staff and 2, 3 years of doing things the bad way?

How to avoid this trap

The most important thing, I feel, is to be aware of what kind of culture you want to build. This self-awareness is harder than it sounds. It takes a lot of introspection and courage. You need to be willing to accept that your vision for what kind of company is good to work in will generally be considered a bit crazy by most people ("What do you mean all salary information is transparent? You can't run a company like that!") or downright batshit insane ("Wait, what? You let employees decide on their own salaries???"). More experienced culture-builders will smile and nod and say "that sounds interesting", but those are few and far between. Most people will think you're crazy to want to run a company like that, differently from most other companies out there.

Luckily, as entrepreneurs, we're well used to enduring multitudes of concerned friends, family and other well-wishers telling us that we're insane, so perhaps the criticism is not so hard to take. However, before you can be criticised for your crazy ideas, you need to figure out what those ideas are.

There are all sorts of ways to do that, but the key is constant questioning of yourself. Keep asking: do I feel this is truly the right thing, or is this just a default way of running a company? What are the natural consequences of this decision a few months or years down the line? What kind of company makes this decision? Would I want to work there? That last question is particularly essential.

Through this constant questioning, you will over time develop an awareness of what values guide your decisions, and this will then strengthen your ability to make the right choices and make them more quickly. But you can't let up this constant vigilance at any point - otherwise the defaults will once again take over.

Once you are aware of what it is you want to build, the next step is to hire the right people and guide the people you've already hired towards this vision. As a founder of the business, you have enormous influence over the people who work there - much more than you think. Don't let it go to your head - it doesn't make you some kind of company divinity. But it does give you a very deep store of credibility to make things happen, to cut through personal likes and dislikes, through politics, through apparently insurmountable problems, and make change happen. Use that. Use it every day, in countless little ways. Lead from the front: lead by example; be the culture you want to see. Explain your vision, over and over again, in one-to-one meetings, in emails, in group meetings, etc.

Every half-decent article about startup hiring suggests that culture fit is one of the most important hiring criteria - yet most startups ignore that at first, perhaps because they're not really aware of their culture. If you hire based on competence alone, each person will bring some random addition to the culture that doesn't pull in a specific direction. As a result, you will by default end up with an average culture, in the middle - a bad culture, in other words. If you keep hiring people who have the right culture, on the other hand, each hire will strengthen the culture you're trying to build and make an average, boring culture less likely.

Critically examine even little decisions. You can often undermine your own culture-building attempts by giving the wrong example. If you believe in transparency as a key value, for example, then don't hide in a corner and do stuff in secret. Each time you do that, you will undermine your own message and look like a hypocrite. Hypocrisy is a major feature of the average "bad culture".

As a final tip, don't try and force culture. You can show the example, but creating artificial culture artefacts (like "we have a fun afternoon every friday with beer and snacks at your desk" or "we play ping pong") just results in the superficial appearance of culture without the substance of it. You can't make your company fun by saying "we're a fun company". You need to create an environment that is conducive to people having fun, and then allow it to happen, and encourage it gently when you see it. If you want to encourage a culture where people can have a beer on friday afternoon, just keep a fridge stocked with beer, and crack one open yourself at your desk on that fateful day. Eventually people may follow. Or not - and that's ok too. I think one of the reasons that every company with great culture has its own unique expression of culture, its own unique set of "cultural artefacts", is because the ones worth anything grow organically, and that growth tends to be random.

And they all lived happily ever after...

I'm not far enough down this process to know what happens once you have built a solid, good culture. Discussions with people who are further along seem to indicate that even after investing many years into this, when the founders leave the culture tends to get worse, or at least to drift further and further away from what they initially envisioned.

Then again there appear to be counter-examples, like Semco. Perhaps there are certain features of culture which makes it more resilient to the departure of the founder (like a democratic approach). For obvious reasons, I can't comment on this yet. Check back in ten years or so for an update...

In summary

  • By default, your culture will be just like everyone else's: crap.
  • To avert that, you need to constantly question all your decisions and their impact on culture - always, forever.
  • Be prepared for people telling you you're crazy for the insane ideas you're trying to implement in your company.
  • Make an effort to become self-aware about what kind of culture you want to build.
  • Make culture fit your number one hiring criterion.
  • Don't try and force culture. Enforced fun is not.

More from the library:
How to build and maintain momentum
How to evaluate founder exits
Always drill down to fundamental metrics