If an entrepreneur can’t build a culture of excitement and commitment at a startup, the chances of long-term success are negligible. It simply doesn’t matter how great your solution is. Every investor knows this. That’s why they insist on spending a day with your team as part of the due diligence process. A winning culture is easy to see, and a culture of fear and desperation is hard to hide.
As a mentor to entrepreneurs, I often get asked what you can do to build the right culture. The simple answer is effective communication and leadership. Here are 10 specific recommendations that I believe will help every founder put this into practice.
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Don’t hesitate to verbalize your dream to team members daily. Written mission statements and a passionate quarterly pitch to the team is not enough. Team members have to hear from you daily and see your enthusiasm during individual discussions, to the point that they are repeating your story to others. That’s how a culture is solidified.
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Demonstrate a consistent set of personal values and priorities. People believe what they see more than what you say, and they tend to imitate what you do. Thus investors look for consistency between you and your team on values and priorities. If there is no consistency, there is no culture.
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Customize your organizational structure based on individuals' strengths. There is no rule that marketing needs to report to the founder, or that every startup needs a chief operating officer. Some of the best startup cultures have no hierarchical reporting, yet everyone knows who drives each of the initiatives. Culture is not defined by job titles.
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Focus on hiring the right people, and deal quickly with mismatches. Skills and experience are necessary in hiring, but finding a match in values and culture is equally important. Mentoring and training programs need to be put in place early. Entrepreneurs who are too busy for people never get the culture they envision.
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Foster innovation in process as well as products. Technology can be used to facilitate customer support and sales, as well as enhance your product. Investors look for innovation in all areas of the business and all levels of the organization, from top to bottom. Winning cultures incent and reward innovation as well as business results.
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Visibly link your standards to industry best practices. By default, teams look only inside the organization, and tend to compare their performances to their own previous records or other internal groups. Comparisons should always be with competitors and customer expectations of excellence. Cultures that excel measure only against leaders.
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Create opportunities for continuous learning. A winning culture is filled with people who love to learn. They need opportunities to do new work and try out new roles, as well as have access to training updates in their current positions. Successful leaders are good coaches and mentors, as well as being on the lookout for personal learning opportunities.
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Sponsor internal events to build team synergy. Events need to be inspirational as well as directional. These will build the culture you need, but also give you an opportunity to observe where you need more focus. Make sure each one highlights your values, recognizes the right team members and involves customers and outside experts.
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Make your startup a winning place to work. Promote your culture and innovations through social media and the press to make the team proud of their jobs. This pride will be sensed by customers and vendors, since everyone wants to buy into a winner. Winning in business is all about building momentum, and capitalizing on that progress.
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Define a legacy for yourself and your company. A legacy is a larger purpose than improved business growth or profits. As team members buy into that legacy, day-to-day slights and issues become less critical, and maintaining the culture and focus becomes the priority. This focus has the potential to double or triple your business growth.
The right culture doesn’t happen overnight, and it’s especially hard to change once it is set. Thus it’s especially important to start early, long before that first investor schedules a visit, and long before your first customer puts the team to the test. Your business's growth and success depends on it.
