A strong culture is critical for success, but too many companies risk creating self-destructive cults that stifle innovation and creativity.
What does culture really mean?
In the last few years, the competition for talent has become fierce, and these talent struggles have re-ignited the winning by Culture wars. Those of us that have been around for a while will remember how during the peaks of startup goldrushes companies spent huge amounts of time and money on why they were different, both to attract people, but also to lay down their values guardrails. But as we hit a potential turning point in the company/employee relationship with many companies downsizing, should we rethink what culture really means?
You can trace ‘Valley’ culture all the way back to the 70s, and I've heard the legendary stories from Nolan Bushnell, the founder of Atari, about how they provided hot tubs and perks in the office so people would stay around longer. Then through Apple (remember Jobs was an intern at Atari) and then Cisco, Microsoft and Google you can see these themes continue - great offices, great snacks and food, and no real reason to go home. We started with offices becoming palaces, and then turning into whole campuses, with everything provided on-site. But this wasn’t really culture, but rather a way to maximise value from expensive employees. But what really bound employees together was a sense of purpose and belonging, common goals that seem audacious, that your tribe of super smart people are dedicated to solving.
But how do you know if somebody fits your tribe? If you look around the walls of many tech companies you’ll recognise the same wishy-washy sentences and words on almost every wall. It’s like the words have been passed down through time, wordsmithed by every company into meaningless sentences they think are unique. They’re not. This really came to the fore when Netflix published their culture deck which showed what nonsense culture had become. The classic in the deck was the lobby picture of Enron’s values - which plainly meant nothing and were hollow and meaningless: Integrity, Communication, Respect, and Excellence - these words are now so devalued they’re almost unusable.
Every startup today believes they have a unique culture, and always claims to have a final ‘culture fit’ interview in their process. But what are we really testing here, especially as interviewers tend to look in the mirror and like what they see? If the interviewee is like me then they must be good right? Well maybe not. Culture is a two-way street, so let’s first think, in today’s climate what an employee wants from the company. After employing so many people over the years I find the enduring memories alumni share are this - I worked with smart, compassionate people, who taught me how to solve big problems, and had fun along the way. Notice that money isn’t mentioned here, because years later you don’t remember salary and benefits, because unless you made crazy money it didn’t matter.
Purpose & BHAG (Big Hairy Audacious Goals)
But what is central is always purpose - purpose of vision and purpose of work. Today's workforce craves purpose more than anything else, specifically knowing that if they give a large part of their time to the company, the company will in turn give back to a greater good. The pure capitalist view of building a company for world domination may be implicit, but this has to be tempered with some form of giving back, both to local communities but also support for macro items eg. ESG. But what is vital is the company’s BHAG (Big Hairy Audacious Goals) get the interviewee excited, so much so that you get Purpose Lock - a shared belief that you can change the world, no matter how crazy that may seem! In every company I've ever joined I've been super excited about the BHAG’s and joined with total Purpose Lock - knowing that the work to get there would need a team of super smart hard-working people across all functions. And many of them came true, now being seen as Business As Usual!
It’s often been stated that culture is what an employee does when nobody's looking. So using our company culture and values guide how do we test this? Mostly I've seen this as a series of questions of the ‘What would you do if …’ or ‘Tell me about a time when …’ type scenarios. But in reality, this approach has no real depth or measurement, hence interviewers resort to the ‘do I like this person and could I work with them’ approach - because I represent the culture and they’re like me so all is good. But this is where a cult starts - a nucleus of people who often look, think and act the same. Trust me - this lack of diversity never ends well.
Let’s also look at the other overused word - fun. It’s true that so many startups just plain miss the key milestones of building the business, not stopping to recognise and celebrate the customer wins, the big product release, the nice analyst review. They’re just too busy! But it’s these milestones that people remember, probably as much as if not more than the ‘mandated fun’. Leadership tend to love the big bash expensive events, where memories are made, but often for the wrong things. I agree with the Netflix statement that ‘we only hire fully formed adults’ but creating an event of excess (read alcohol) often ends badly. The boundary of safe space versus fun space often gets blurred for younger team members when celebrating with senior team members. We all think of culture as flowing down the organisation, built on the belief that the senior team should lead by example. This is true. However, culture also flows across the organisation, and fun often works best this way, with empowered culture veterans pulling together impromptu events and celebrations, often simple but equally very well remembered. Culture is not hierarchical, and it’s often organic.
‘A cult is not a retention strategy’
So we think a lot about people’s culture fit joining your company, but what about when they leave your company? This is where consulting organisations really take care to ensure people leave as future ambassadors, creating alumni groups who often engage their original company in building their next one, closing the value loop. In software, however, we seem to have a toxic attitude towards letting people go. Maybe it’s permeated through endless Valley-derived startup handbooks, but phrases like ‘hire slow, fire fast’ and ‘cut once and cut deep’ are often repeated in today’s economic reality, often combined with the classic ‘wasn’t a culture fit’. Whatever your reasons, note that everyone is watching how you treat those that leave, especially the non-regretted people who had no choice. How you treat them says a lot about your culture, and how you eject people from your cult. Simply put, we tend to demand everything from people joining our cult, but the second we eject them we often excommunicate them as if they don’t exist anymore. They’re erased as if they never existed and never spoken about again - and all the employees that remain see that and hope it never happens to them. There is no doubt that behaviours change to limit emotional exposure to being rejected by the cult. A cult is not a retention strategy.
This isn’t limited to individual contributors, as growing startups also often get advised that for the next stage of growth they need a ‘bigger more tenured’ person, with the result that the incumbent leader needs to leave - now! So let’s think about this - the person in the role today will have probably built that function from the ground up, run the many experiments of success, and gathered huge knowledge and scar tissue of what works and what doesn’t work. Plus almost always they carry the culture hugely - why would you want that person to leave? Think hard about a new challenge for that person, give them a chance at a new role and don’t let your culture leader walk out the door. Chances are they believe in your BHAG’s more than ever, and the stats show that in GTM especially, it often takes a couple of iterations to find the right new leader.
In summary, now more than ever your culture needs to represent who you really are, not a selection of over-used words that facilitate the building of a company of clones - this is a cult. Think hard about what people want from your culture, as much as they need to give to your culture, and how culture travels and gets reinforced in your people. Your employees now need purpose more than ever - excited about your crazy ambitions, but also how that benefits the wider good. And show compassion to those that choose to or have to leave, because the culture will live on in those people in their continuing career journey.