Entrepreneurs and small business owners who are in the early stages of building their support team of staff and workers often do not realize that they are in the early stages of creating the culture of their company -- something that may have long-term implications for their success depending on the choices they make.
What do we mean by culture? Culture, as defined in Wikipedia, “encompasses values and behaviors that "contribute to the unique social and psychological environment of an organization."
The founding entrepreneur, in his or her leadership role, is the primary driver of a startup’s values and interpersonal day-to-day behaviors. They establish a tone for the workings of the company, as well as setting its priorities. As new workers come on board, they look toward the founder for guidance observing how clients are served, how colleagues treat each other, and what professional standards they must meet.
In a healthy company culture, individuals establish constructive bonds that add to teamwork and the cohesiveness of the company in support of its mission. They work collectively to accomplish goals that they alone are unable to attain. A startup gains great momentum when the successes of the team begin to exceed the successes of the individual.
So how does an entrepreneur create a culture of success in his or her business?
It begins with knowing themselves -- being aware of their own values and behavior -- and affirming those values and behaviors that are consistent with being a leader. Self-awareness is considered a key leadership skill that enables managers to understand how their actions influence others. This is critical in determining the nature and the quality of the individuals who they hire to follow them -- which in aggregate forms the business culture -- positively or negatively.
Jim Collins’s book Good to Great explored the elements that contribute to great performing companies that distinguish them from good performing companies. Collins identified common characteristics of the leaders of great performing companies. This included a common approach of not just identifying the right people, but also removing the wrong people, and then making sure the right people are in the right company positions. He also offered several other insights about the cultures of high-performing companies.
Derek Lidow’s book Startup Leadership focuses on the leadership skills that entrepreneurs can learn and apply in each stage of their venture. He offers ways for entrepreneurs to assess their own skills, create a personal strategy that plays on strengths and mitigates weaknesses. He delves into how these skills can be used to build the teams that make a venture successful.
From the investor point of view, entrepreneurs who have prior leadership experience are greatly valued. Investors prefer to not fund an entrepreneur’s learning curve -- in as many areas as possible. They want an entrepreneur with honed managerial skills who has had the experience of building a team and making first hires that they feel will put the startup’s nascent culture in a firm direction.
The Harvard Business Review published an article by John Coleman, titled “Six Components of a Great Corporate Culture.” In this article the author identifies six components of a corporate culture that differentiates it from others and that offers the greater chance for sustainable success. The components are Vision, Values, Practices, People, Narrative and Place. The author sees these as foundational components for creating a sustainable culture, while noting that there are more than these six. In summary:
Vision is articulated through the venture’s mission statement, according to Coleman. Entrepreneurs are encouraged to put in writing key aspects of their business plan -- that help them determine the purpose of the venture -- drawing out of them their priorities and values. Values are seen as the foundation of an organization. They provide the guidelines for the behavior and mindset needed to achieve the vision such as how clients are served, how colleagues treat each other, and if professional standards are upheld.
Practices deal with the “operating principles of daily life in the firm,” according to Coleman. Values and activities that reflect them need to be affirmed in ways that embed them in the organization. It is People who develop and foster a coherent culture that is critical to success, embracing and sharing those values. Building on this is the Narrative, the storyline that shows the consistency of vision and values that over time reinforces to people that they are building on the work of others. A constructive and rich history of culture is seen as a critical element in the successful building of large corporations and organizations in the long run. Today companies such as Apple and Uber are viewed in this light, the former more positively, the latter very negatively.
Finally, there is Place -- that Coleman asserts helps to shape the culture through the surroundings where it exists. This can be as broad as a region or city such as Silicon Valley, for example, or as narrow as the interior work environment such as today’s open work spaces that are intended to spur collaboration.
A startup’s size is clearly different from that of a corporation, but the fundamentals of culture in Coleman’s article still apply.
For the first-time entrepreneur or for those who have not had managerial experience, the first steps of building their team and setting the right culture for success may be a new and difficult challenge. However, entrepreneurship today is much studied -- presenting many more avenues of support than ever before. Entrepreneurs and small-business owners today have ready access to thought leaders who share their insight and best practices in books and articles. Infrastructure now also exists in the entrepreneurial communities such as non-profit entrepreneurial organizations, accelerators, incubators and more.
Entrepreneurs and small business owners are encouraged to network to find the best resources available to them. This approach of wanting the best can then be consistently applied within their company, putting them on track to have a culture of success.