Designing and Building Culture at a Startup: The Four Ps

Summary: While designing and building culture anywhere is difficult, startups have unique qualities that make it especially challenging. Here I give a mini-model, called the “Four Ps”, which can serve as a reminder of the key elements to create, maintain, and align culture. E-mail. Tweet.

I was recently asked by good friend, and coach Bob Radin, a professor at the Carroll School of Management at Boston College, to speak to his MBA class, called “Managing People in Organizations”. Bob asked me to give them the perspective of what it takes to design and build culture at a startup; for which I provided some perspective, as well as a mini-framework, to help students think about how culture plays an integral role when founding a startup, or even selecting where to begin their post-MBA career.

In addition to the slides, here is a description of the main takeaways of the discussion.

If you cannot view the slides above, you can find them on Slideshare here: http://slidesha.re/cbifUH

Culture is hard…especially at a startup

Despite the romantic notions, culture in a startup just doesn’t happen: it’s designed and created under tremendous adversity. Starting from “zero”, managing hypergrowth, pleasing multiple stakeholders, and managing big personalities / egos make it exceptionally harder than an existing company. The other dirty little secret is that money — whether coming into it via financing, or having to bootstrap for extended periods — can really change behavior and put additional stress on the fledgling culture.

The Four Ps

The overwhelming tendency, of inexperienced founders, is to “cut and paste” various attributes from other startups (an example of what I call Karaoke Creativity). The culture a founder sets up must be specific to the problem / market, the people involved, and the business context. So cherry picking other mission statements won’t cut it; instead, I provided three things to think about when designing and building a culture to stand the test of time.

i) Purpose:
The underlying values and beliefs define the DNA of the company. It’s not the formalized, nice-sounding values that are emblazoned on a plaque on the company walls (unless it’s this one), rather it’s about what these companies actually do, on a day-to-day basis.

To answer that question, drive to the core to the single most important thing to the company: I’d argue at Google it’s the “product”, at Goldman Sachs it’s the “deal”, at Zappos it’s the “customer”, and maybe at Apple it’s “Steve Jobs”. While this is a very blunt tool, asking this question is a way to distill all of the corporate jargon into a single focus…which is needed to orient everything else.

ii) Patterns:
In some great academic work, performed by a Sloan professor of mine Diane Burton, she outlines a few standard “playbooks”, or “design patterns” that help to facilitate cultural behavior in organizations. This is detailed in a separate blog post, as there is a lot more to discuss on this one.

iii) People:
While the founder(s) of a company massively, and perhaps irrevocably, shape the core values of a startup, its execution rests with the people in an organization; they’re the ones that turn purpose and values into culture. While an eternity can be spent on this topic alone, some important topics covered here include:

• Essential competencies & qualities of the people you recruit. I have my own take on what to look for, and also borrowed from Ben Horowitz’ thoughts as well.
• Hiring and retaining key people. I again I borrowed from Ben’s philosophies and also from Bruce Temkin on “re-recruiting”.
• Common organizational “patterns” that underlie startups, referencing the work of a Professor I had while at MIT Sloan, Diane Burton. Her research shows that that many startups fall into characteristic models — for more information, you should read her paper.

iv) Process:
The final way to instill culture revolves around all of the tools, processes, and mechanisms put in place that enables people to do their job effectively, and what drives “rewards” (promotions and accolades), and “punishments” (reprimands and lack of advancement). We touched on subtopics such as org charts, motivators (see see my post), performance evaluations (see my post), and other workplace “rituals”.

Sticking with it is even harder

At the beginning of a start-up, it’s easier to have a handle on all parts of the process; however, as the company grows, everything you have created will be tested by many external factors, so sticking to your guns is hard. Here are a few of the examples we discussed, from the small to the large, that test the stewards of startup culture:

• Keeping regular meetings: especially when urgent client matters draw you away
• Celebrating the small stuff, in the face of never feeling unequivocal success
• Debating a key, desperately needed hire who doesn’t quite “fit”
• Parting ways with key team members
• Helping employees through very difficult personal issues that will impact their work

Such kinds of issues are very real and can test founders’ deep morals. As a result, the decisions one makes can severely alter the fabric of the startup’s culture.

Takeaways

Culture is critical to the healthy functioning of any company. While culture anywhere is challenging to build, startups have unique qualities that make it increasingly difficult. Using the “Three Ps” is by no means a recipe, rather a reminder of the key elements that founding teams need to commit to create, maintain, and align in order to develop and steward the culture at their startups.

Thanks

I’d like to thank the students of the Carroll School of Management, in the “Managing People in Organizations” MBA class, at Boston College for a great discussion and for pushing me to solidify these thoughts.