Why culture trumps everything in scaling your start up
What I’ve Learned from 10 Years as a Successful Founder (Part Two)…
Below is part two of an ongoing series of raw and honest posts, designed to share stories directly from our own personal experiences of start-up success. They are a little rough around the edges but full of real world advice. In this article we focus on how to hire the right people and create the right environment to win big!
(If you want to start at the beginning you can find part one right here)
Hiring your first few people is perhaps the single biggest psychological challenge for entrepreneurs contemplating the leap from salaried existence to start up life.
Having others’ mortgages and livelihoods around your neck and the associated risk with bringing newcomers into your little lifestyle business can be daunting. What if something goes wrong? What if they don’t work out? How do we manage if revenues slide because of it? These are just some of the questions I hear on a regular basis when I coach those thinking of launching a start-up venture of their own.
You see, employing people is an inevitable part of the journey for any entrepreneur and while millions harbour great ideas it is only those who can truly scale that vision across teams that are truly successful.
And facing that challenge head on can become so much of an issue that it prevents many people from making the jump in the first place, designating thousands of great business ideas to the trash can of history.
And that’s a travesty.
Yes, employing people can be a scary proposition, and, equally, managing and leading people is often the hardest element of all, but in my experience, getting it right is not as inconsistent and difficult as it may at first appear.
The answer lies in the often-misused concept of ‘Culture’.
While many see culture as an ethereal, intangible ‘thing’ that people in big companies talk about, in reality it’s most relevant and important, to really early stage businesses.
And the reason for that is actually a very logical one.
The importance of forming culture early
I learned this lesson the hard way, focusing so much on top line sales growth during those early months, scared to death of the aforementioned issues with paying those mortgages that I created an even more dangerous threat – poor internal culture and a lack of shared vision.
While revenues rocketed, I could slowly begin to see those cracks forming internally with arguments and productivity producing a souring environment, so much so that I had to take action and remove a number of people to save the many. It was one of the most difficult periods in my professional career and instilled a strong sense of focus on empowerment, transparency and honesty. Switching from driving revenue personally to giving those around me the tools and shared belief system to do it for, and with me. It was the breakthrough we needed to move from lifestyle business to a valuable, growing company.
Getting to your Why
The answer to this challenge lay in a process of externalising what it was that I, as a founder, believed in. And to do that I asked a series of questions. Questions that I have since used numerous times to help our start-ups and investments avoid those same pitfalls that I experienced. They include:
- Why do you feel so passionate about what you are doing?
- Why should people care?
- What do you believe in, in the context of what you are doing?
- What problem do you solve?
- What market, consumer or technological change have you seen that creates your opportunity, right now?
By answering these simple questions, you begin to externalise your purpose and why you fight so hard to grow. And in doing so your vision is shared and carried forward by everyone within the business.
Getting to your why is not easy of course and so it is best to get to it as part of a wider session on vision and so on. The statement you end up with should:
- Be simple and clear.
- Be actionable.
- Focused on how you’ll contribute to others.
- Expressed in affirmative language that resonates with you.
- Encapsulate all of the qualities we just mentioned – and it should be able to do so in a single sentence.
Here are a couple of good examples of this:
“To inspire human creativity by enabling a million artists to live of their art and a billion people to enjoy it and to be inspired by it.”
“Everything we do we believe in challenging the status quo, we believe in thinking differently.”
This is not a unique process of course. It follows the acclaimed thinking of Simon Sinek and is brilliantly explained in his Ted Talk from 2014 Start with Why.
In it he explains that every leader and company know the WHAT. They can describe their products, their industry, and their competitors. Some companies also know HOW they do WHAT they do ‚Äî their unique differentiators, their value proposition, and their values. But few companies know or articulate their WHY ‚Äî their purpose, their cause or their belief. The WHY is their reason for being. And the WHY is why anyone should care.
An example of Apple answering these challenges looks like this:
WHY – Everything we do we believe in challenging the status quo, we believe in thinking differently.
HOW – We make products that are beautifully designed and user friendly.
WHAT – We just happen to make great computers. Wanna buy one?
And from my experience, Sinek’s approach is absolutely correct and the process of capturing Why, How and What is a critical phase to complete BEFORE you hire more than four or five people.
It’s possible, of course, to share your beliefs with those around you while you are still small, but as you add headcount that challenge quickly becomes exponentially more difficult, until you find that no one can answer the questions around why you exist and what you stand for.
By putting in place the framework it means you can begin communicating and telling your story around it to every new starter from day dot.
Adding further clarity
While some may stop at the Why, How and What I have also found it useful to take it a little further, adding a more traditional Vision Statement on top. This is helpful for internal communication as it succinctly captures the ‘what do we want to be famous for and where are we going’ question – a direction, if you will.
There are some brilliant examples in this piece by HubSpot and by taking a few minutes to read them you will see how powerful they can be as a motivator and leadership tool as your internal team gets bigger.
The final sprinkling of value
By now you have your Why, How and What’s in place and have nailed a brilliant Vision Statement as the cherry on top and be pretty pleased with yourself, but we must remember that the point of this exercise is ultimately to establish a framework around which your new culture can be built.
To do that another helpful element to add to the mix is that of (often undersold and underutilised) personal principles.
As well as establishing what the group view is, it is imperative that you have made clear what is expected of an individual within that environment. And this is where they come in.
Some may claim they have little value and their experience of such ‘rules’ was a bad one, but this is misuse rather than lack of value.
Take those used in my last business Zazzle. We built a team around our PHIERCE principles – Passion, Honesty, Innovation, Expertise, Respect, Creativity and Empowerment and everything we did and talked about revolved around those pillars. Each employ had them within their contracts and each annual personal development plan. Hell, they were even scored against them when it came to bonus reviews, such was their importance.
And it was these traits that powered our interview process too. Instead of looking at skill set, experience and academic ability we looked for people that ‘believed the same as us.’ In doing so we transformed the company, ensuring that 1+1 = 3 in terms of growth and productivity.
Now, none of this is easy of course. If you are at the early stage, you are running around like a headless chicken trying to do everything. But pause you must. Committing this to paper is perhaps the best decision you’ll make it that first year.
And remember, if you take away just one thing, not just from this post but the whole What I’ve Learned from 10 Years as a Successful Start Up Founder series, it is that good advice is useless without a cast iron commitment to CONSISTENTLY implement and uphold the behaviours and beliefs that make the business what it is.
And as a founder it is your job to ensure your vision is consistently shared and becomes part of the fibre of everything you do – from weekly catch ups to performance reviews, pitch decks and annual plan presentations. And that’s before you even start the day job of building a successful money-making machine!
You can check out Part One of the What I’ve Learned from 10 Years as a Successful Start Up Founder series by clicking on the link.