In the startup world many entrepreneurs work 24/7/365 to develop the company’s product or perfect the service. In his monthly Inc colum, The Growth Factor, Chrysalis Venture Partner Alan Ying discusses the importance of a startup’s culture.
The Culture Bank: Too Important to Ignore
One of our portfolio companies will double revenue this year and has enough backlog to at least do so again next year. This is creating lots of “good problems” related to growth (see post about “There Are Only 2 Kinds of Problems”). During a conversation with the CEO about employees, we discussed the importance of having a big balance in the “Culture Bank.”
When I founded my first startup I knew nothing about running a business. I read a lot of entrepreneur biographies and talked with many successful founders, though, so I felt I was at least a knowledgeable novice. While they all had different details, one consistent theme showed up in all the success stories: the importance of company culture.
These leaders all treated culture like it was a tangible, sacred thing and focused on “building” it -sometimes more than their product or operations – through various hokey methods.
One would have an all-company meeting whenever a new client signed on and tell a story highlighting how the work of someone *not* in sales helped close the deal (cultural message = every co-worker is essential to our success).
In another the founder donned a bridal gown and played Mendelssohn’s Wedding March as she
strode through headquarters to announce a new customer (cultural message = we’re marrying the customer for life).
Another CEO brought in the customers of the companies they sold to – people off the street – to discuss their trials and tribulations (cultural message = we’re not just selling software, we’re trying to make lives better for the people our customers serve).
While the specific messages varied, the gist was similar: there’s a bigger reason for what we’re doing, and you’re an important part of it. This reminds me of a quote I use often: “If the why is big enough, you’ll figure out the how.”
Eventually, I came to think of culture as a “Bank” into which I should always be making enriching deposits. The benefit of building up a positive balance in the Culture Bank, I found out, was that no matter how great your business is going, you’re going to hit rough patches and have to make withdrawals.
In my first startup we went from a guy in a garage to 75 employees in 3 years. Our revenue was exploding, customers were happy, and we were an industry darling. I copied parts of the CEOs’ culture-building activities above, and added my own spin (usually jumping up on tables). We were voted one of the three “Best Places to Work” in our state.
And then suddenly we stumbled. Implementation quality was falling, go-lives were off schedule, support was delayed, new products were late, bugs creeped into the product. Customers complained and competitors lurked – we were teetering on the edge.
I made some management changes, and in the same way we had company meetings to build culture around successes, we gathered to buckle down for the bumpy turnaround. For us to survive, I asked for peoples’ commitment above and beyond a what a “job” had the right to ask. I had to make “withdrawals” from our Culture Bank.
Everyone banded together because the “why” of our culture was worth it to them – no one complained or abandoned ship. The business had given them emotional fulfillment when times were good, and now they were giving their emotional energy back to the business.
Customers stayed with us and we got back on a steep growth curve. I fulfilled my end of the bargain – getting back to making deposits into the Culture Bank – by changing our business so we wouldn’t teeter on that edge again.
In the go-go early stages of growth, founders/entrepreneurs/CEOs can get lost in the daunting list of things-that-need-to-get-done-now. Making deposits in the Culture Bank isn’t more important than execution of that list – a great culture with a lousy business is still a lousy business. The Culture Bank is your company’s rainy-day insurance, you’ll need a positive balance – a “why” big enough to push people to figure out a “how” – to help get out of the ditch when tough times inevitably arise.