What culture in any company is and is not? #startup

Until a few years ago when I used to hear a few very well respected startup experts on the importance of culture or what it was, I would ignore the remainder of their speech. Culture is nebulous, ephemeral and arbitrary thing I thought. After a closer reading of many startup’s  culture, documented in a series by a website, I would think that it was about being friendly, flexibility at work etc.

It was plain to me that when you get a few reporters who have never run a startup or been an entrepreneur, all you get is pithy statements – open culture, flexible work environment, with no digging deeper to help you build a framework for the topic.

I have a new theory about culture and not just startup culture in particular.

Culture defines how your company respond to situations.

When you are just one person culture is how you respond to certain situations – it is your personal ethos. When you have a cofounder, then it is how both of you decide to respond to situations. When you grow larger, it is the set of guidelines for your team on how to respond to situations. I dont know if that’s sufficient, so I’d like your feedback.

Let me give you an example.

I had a good friend and entrepreneur who came to see me yesterday.  He and his cofounder have been going through some tough times lately. Their team had significant performance issues which they were unable to turn around.

They were a small team of 10 folks so every team members performance would affect the company in a significant way. One of the team members, who was a good contributor had gone through some personal challenges and that affected his performance. He was well regarded, so his lackadaisical approach post his challenges, resulted in problems for the entire team. They all got more lax at work. Deadlines slipped and this “virus” soon spread to the entire team including their 2 sales people.

The founders realized the cause of the problem, but since he was an early employee, were loathe to let him go. They still wanted to “solve the problem” but were not sure on how to.

Take a few moments now to think about how you would handle this issue in your company if this happened. The simple response – “We would talk to the person and tell them to pull up their socks”, wont suffice. This is way past that stage. You have to take some action. The time for talking has passed is the assumption you have to make.

Yesterday I outlined 2 examples of how they could respond. I am going to call it the Zynga approach and the SAS approach. Having so many friends at both places, I feel they are poles apart in their culture .

The SAS approach is an “all hands on deck” approach. When a problem is noticed, such as customers not buying quickly enough, then the entire team rallies behind the problem and tries to solve it together. The pros of this approach it that it builds camaraderie and good-will, which leads to both higher performance in the short term and better morale in the long term. The cons of this approach is that there’s a lot of work for everyone in the short term to make up for the person that’s the slacker, which results in some bitterness among team members towards the “guilty” party.

The Zynga approach is “set the bar very high for performance”. If an individual is not performing to the level set by the objectives and metrics, they would replace that person after 1 or 2 warnings. The pros of this approach is that there’s a high bar for individual and team performance and everyone feels that they are accountable and responsible. The cons is that this environment tends to be rather detrimental to the team dynamics in the longer term.

Which road you take determines your culture.

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5 thoughts on “What culture in any company is and is not? #startup”

  1. Great post Mukund. I, for one, have a tough time deciding which approach is better.

    On the face of it, the SAS approach sounds better but for a company’s betterment, the zynga approach definitely works. Especially when you’re past the 20-30 employees stage.

    1. Reward success, reward failure, punish inaction. When good people fail to perform at times, as can happen, give them time off, help them solve their personal problem which is holding them back but do not allow them to influence others in a negative way.

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