There is no “one size fits all” when it comes to company culture. And there’s definitely no right answer when it comes to how you want to create yours. But, in our experience, there are some principles that are invaluable to understand and think deeply about when you start making the first 10-20 hires.

First, What is Culture?

Many people describe culture as your company’s “personality.” This is good, but more tactically, we think about culture as a combination of:

• How your shared value-system affects day-to-day decisions

• How it feels to work at the company

Here are some common mistakes early stage founders and leaders make in respect to workplace culture:

(1) Not understanding how your company’s vision, mission, and strategy work together

• Jeff Weiner, the Chairman of Linkedin, wrote an excellent article on this.

• Vision - The dream; a team's true north. Primary objective is to inspire and create a shared sense of purpose throughout the company.

• Mission - Overarching objective of the organization; should be measurable, achievable, and ideally inspirational. Should not be used synonymously with a vision statement. A great mission statement is brief, easy to remember, minimizes the use of the word "and" (to prevent a laundry list), shouldn't require follow-up clarifying questions when first presented, and ideally proves to be uniquely identifiable to the company, i.e. wouldn't be confused for another company's mission.

• Strategy - How a company navigates its competitive landscape (and the dynamics most heavily influencing that landscape, e.g. technology) to achieve its objectives. Not to be confused with tactics, which are the specific steps put into place to manifest the strategy. Can also state strategy as a series of strategic objectives to help make it more actionable. Requires clear understanding and definition of an organization's strengths and competitive advantages.

• After you’ve defined this, the critical thing to make sure of is that you annual and quarterly objectives follow logically from these three pillars. If there is some amount of cognitive dissonance between these, you’re basically telling your company that your vision and mission are arbitrary.

(2) Not being transparent about what is driving the founders’ growth goals

• We’ve often seen and experienced the cognitive dissonance created when founders talk about the importance of work-life balance but then take a “growth at all costs” approach when it comes to the actual work.

• If your goal is top-line revenue (not high profitability), that’s OK, but this needs to be communicated to the team along with why this is the current strategy.

• If the goal is high profitability, you will likely appear more frugal (less gracious), which is also OK, but again, this business goal should be communicated to the team so they understand why this is important.

(3) Either being “too soft” or “too hard” on employees

• Here’s a good principle: most people who care about their careers want to work in a tight-knit, elite group of people who can be trusted with responsibility and always come through with their portion of the job. Let them do that! Cultivate this.

• It is rare for first time founders to have the right balance of foreful accountability and compassionate patience with early employees. Many early founders and leaders tend to put less pressure on earlier employees out of fear that they may leave.

• How this manifests is that the founders start to take more of the work over that would otherwise be the employees job and rely less on delegation and accountability — which in the end, just breeds a complacent team atmosphere.

• Sometimes, founders are too hard on employees which is easier to spot and results in higher burnout.

(4) Unnecessary spending in the name of “company culture”

• This should be obvious, but don’t spend thousands of dollars on a “company retreat” if you’re bottom-line is not insanely healthy.

• There are ways to spend quality time with your team that do not cost much money.

• In fact, the way you approach this is a signal to your employees of how they should spend company resources in the future.
  
  

(5) Creating platitude “core values” that are too idealistic

• No matter how you define your company values in your company wiki, the founders’ values become the operating culture. The way founders make decisions, manage the finances, and spend their time affects everyone and becomes the norm. This is because people want to be successful within the company (even if they don’t agree with the way leadership operates!), and tend to fall in line with how others act.

• You want to create memorable values that become everyday practice. Stripe has a great practice of repeating mantras that help instill culture. For example, they turn their values into prompts such as: “would you want this to appear on the front page of the New York Times?”

(6) Not knowing how to reward, or criticize your team constructively

• Scott Belsky (Founder of Behance, Chief Product Officer at Adobe) coined the phrase “short circuit wins for your team”

• Create a space for high-fives in a way that doesn’t feel too forced or corporate

• When people bring a valid idea to the table, praise them in front of everyone. You want to signal that anyone’s ideas are valuable, and for everyone to have an open mind.

• That said, you cannot be afraid to speak up about behavior or ways of communicating that are non-productive. Remember: even a founder’s silence speaks volumes.

• If someone does something borderline offensive or questionable one time, it’s typically best to give them the benefit of the doubt, discuss with them in private immediately, and make sure they understand how they could act more appropriately in the future

• If someone is showing early indicators of low performance, you want to address that head-on ASAP with them, in private.

Bonus tip: create “working with me” documents within your team

In the beginning, you want early hires to absorb as much of your energy/value system as possible. Be open and transparent about what’s important to you, and how to work most effectively with the founding team.

Find a template document here.