Tuesday, June 21, 2011

Culture As Startup Accelerant

After all is said and done, culture is the glue that holds a society together, enabling it to overcome all sorts of difficulties. The importance of culture, however, becomes magnified in a startup setting, as succinctly put by Nilofer Merchant in a recent post on Harvard Business Review's blog:
Success is a function of Purpose, Talent, with a Culture accelerant. Or: S = (PT)C
Culture drives that much-valued-yet-elusive exponential growth that every founder dreams for their startup. Without that certain culture, no matter how many smart and talented people you gather around the table, and regardless of how great the mission you embark upon, you are unlikely to succeed. Why? Because all those well-intentioned smart people start getting in each other's way, and sooner or later, end up sabotaging each others' efforts rather than leveraging one another, and thus slowing progress, innovation and growth.

I must admit, I have never seen a successful startup whose employees detected the existence of a "bad" or "disfunctional" culture, and plenty of unsuccessful ones where that was exactly something (perhaps the only thing!) employees could agree on.

Culture is exactly why the founders are critical to the success of their startups: They are the ones who set the culture (just by sheer chronology of events) and can either maintain or destroy it over time (just by sheer action or inaction over time). Founders who are unaware of the critical role they play in fostering a productive culture within their startups have some very hard lessons to learn. The following are some examples of "peopley stuff" (Nilofer's phrase) that founders have a direct impact on:
  • Level of trust between employees
  • Level of collaboration among employees
  • Time spent on politics and CYA stuff by employees
  • Attitude towards risk and innovation by employees
  • General good-will of employees towards success of enterprise
  • Hours that employees put in at work
  • Hours that employees work during the week
  • Hours that employees dream about work (in a good way)
And this is just scratching the tip of the iceberg!

3 comments:

  1. Tourag
    I think this is spot on. What interests me is what happens either after a leader moves on, or a business is acquired. In the former case, if they have set a 'strong' culture (discuss meaning of strong in this case), that can actually set the behaviour pattern for future leaders to have to adopt, or means that the business continues to behave in a certain way long after it is actually 'useful' (discuss meaning of useful in this case!). In the latter, it can lead to all sorts of issues 'melding' businesses together, and this is made all the harder due to senior leaders being so unfamiliar with the 'people-y' stuff (got to love that expression).
    Great post, may I retweet you? (not yet fully clear on etiquette!).
    Chris
    @chrisglennie

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  2. Chris and Jason, glad you both agreed and liked the post.

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