Starting A New Venture? These Are The 5 Mistakes Founders Make When Cultivating Their Company Culture
Company culture isn’t something you “create.”
What I mean is, you don’t set the rules or write up a company handbook and then all of a sudden you’re “done.” Culture constantly evolves. For example, the culture of your company with you and your co-founder is going to be different than you, your co-founder, and five employees, or ten employees, or fifty employees. It changes as you grow, as you reach new milestones of success, and as you go through times of difficulty and transition with one another.
In short, your company’s culture has to be nurtured over a very long period of time.
Unfortunately, most of the business world still thinks about culture as either being about Fooseball tables and craft beer, or Starbucks gift cards and company lunches—when in reality, these aren’t the things that define your organization, nor are they the things your employees will appreciate most about where they work.
Here are the 5 mistakes founders make when trying to cultivate their company culture.
1. They don’t identify people who share their long-term ethos and values.
Entrepreneurship is a long game in a small world.
Most serial entrepreneurs I know re-hire people they have worked with in the past (myself included), simply because finding like-minded individuals can be such a difficult part of the journey. I would way rather go the extra mile for someone I know is a terrific culture fit than settle for a cheaper or more convenient hire—because that fundamental level of trust means you can spend more time focusing on what’s important.
For example, we have this terrific guy who is our COO at Hydros, and last year he had a life threatening medical condition—and had to leave the company. At that moment, we had a choice to make. Were we going to replace him? Or were we going to help him fight through it?
We helped him get the medical attention he needed, and a year later, he is almost completely recovered and still doing some consulting work for our company on the side. That’s an example of how I would much rather go to great lengths to keep a great person part of the team.
2. They don’t look beyond the person’s resume.
This is one of those traps that a lot of people fall into, from young entrepreneurs to experienced individuals in business.
Founders, executive teams, hiring managers, all have a tendency to get starry-eyed for the person with the best pedigree. They put a tremendous amount of weight on where the person went to college, where they got their MBA, or which noteworthy companies they had worked for in the past, without thinking hard about whether this is the right human being for the job.
In fact, you could argue that it may well be the opposite.
People with great CVs have the luxury of feeling safe. They have options, and they don’t necessarily have a high incentive to over-deliver—because what’s worst-case scenario? On paper, they have a pristine reputation, maybe they have great connections, and they can most likely waltz into something else. (Not to mention they’re going to be more expensive.)
Most early-start startups don’t need someone like that.
3. They don’t create an environment that encourages people to run with things on their own.
Nothing stifles growth more than a bottleneck created by the founder.
Obviously this comes with the caveat of there needing to be strong boundaries set from the beginning, but I tend to default to giving people more “wiggle room” than not. I want people who are ambitious, hungry, hard-working self-starters—and I want them to know that they can take the reigns and run with their particular area.
For example, I don’t want my sales manager asking if she can meet with so-and-so about buying our products in 300 different stores. Of course she can, and should, do that—if she thinks it’s a good lead.
It has to be her judgment, not mine.
4. They hire ambitious individuals who don’t (or refuse) to be part of the team.
Any time you are hiring, you have to look at things at a holistic level and ask, “What can go wrong with what I’m looking at?”
One of the big dilemmas founders face is hiring an absolutely all-star individual, but then realizing he or she doesn’t play well with others. They want to report to no one. They want to have complete autonomy. And they don’t want to share whatever it is they’re working on with anyone else—which eventually creates tension with other people on the team.
Essentially, you end up hiring “highly regarded jerks.”
And in the long run, everyone loses.
5. They prioritize diversity for the sake of it, opposed to the pragmatic value and perspective it can offer when prioritized intentionally.
This is something bigger companies can get away with, but at a startup, no way.
Every single person at a startup has to be a value-add at every level of the business. Period. You simply don’t have time, or the resources, to think about diversity as an exercise in equality, let alone using it to “fill a quota.”
However, that’s not to say there isn’t tremendous value in diversity. You just have to look at it through a more practical lens. For example, one of the people on our board of directors is an extremely prominent female entrepreneur. She sold the largest organic baby food startup (which she started out of her dorm room) to Danone for half a billion dollars in less than five years.
Considering 85% of our consumer demographic is female, she brings far more to the table than just “diversity.”