How to Build an Outstanding Startup Culture (On a Budget) | Fooda

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Startup culture has a huge impact on the success of a growing company. Most startup executives and managers intuitively know this.

Defining startup culture—or corporate culture in general—on the other hand, is more difficult. Knowing what makes a good or bad startup culture is tough, too. And practical, straightforward advice on improving culture is hard to come by.

If you want to create an outstanding startup culture, you need to know a few things about culture in general. We’ll start with a corporate culture definition, go over some interesting statistics about organizational culture and performance, and share some tips on how you can create a positive culture at your startup. Let’s get started.

What Is Corporate Culture?

Corporate culture consists of the values, practices, and expectations that bring employees together and guide the company’s decision-making processes. 

Of course, few things are that simple. And organizational culture is no exception; you’ll struggle to find two people who define it in the same way.

If you look at lots of corporate culture definitions, though, you’ll see many parallels. Vision, mission, goals, beliefs, values, and environment are common terms in these definitions. All of these (and more) contribute to a particular company’s culture.

Google Mission Statement

Possibly the best way to define corporate culture is to look at companies that have great ones.

Apple, Google, HubSpot, Salesforce, LinkedIn, and Zappos have consistently been rated as great places to work. But they’ve also produced revolutionary innovations and grown into some of the most successful companies in the world. They prize customer service, innovation, and employee autonomy.

On the other hand, company cultures can contribute to behavior that hurts a company. Both Enron and Wells Fargo found themselves embroiled in controversy after their employees made poor decisions based on what they thought would fit in with the rest of the company’s actions.

It’s hard to pinpoint what company culture is. But values, ethics, and beliefs are the core of it. And it drives the actions employees take on behalf of the company.

This is true of organizations of all sizes. But there are some interesting characteristics of startup culture that set it apart. We’ll get to them momentarily.

The Relationship Between Corporate Culture and Performance

Numerous studies have found that companies with great organizational culture are more innovative, productive, and successful than their peers.

In “Proof That Positive Work Cultures Are More Productive,” Seppälä and Cameron point out the differences between companies with high-pressure, cutthroat cultures and lower-stress organizations.

Companies with high-pressure cultures see a range of problems, including employee disengagement. Compared to engaged workers, disengaged employees had

  • 37% higher absenteeism,
  • 49% more accidents, and
  • 60% more errors and defects in their work.

Companies with low engagement scores, compared to companies with higher scores, showed

  • 18% lower productivity,
  • 16% lower profitability,
  • 37% lower job growth, and
  • 65% lower share price over time.

Can you imagine if Facebook or Tesla had 18% less productivity in their early years? Or if their current share prices were 65% lower? Startups that put the right cultural expectations in place from the beginning have a huge advantage.

But the results go beyond simple measures of profitability. A 2008 study found that corporate culture is the single most important factor in driving innovation.

But what does a company with great culture actually have? What makes for a strong, positive culture?

The Elements of Startup Culture

We have to start somewhere. So we’ll start with the six elements that John Coleman has seen while working with successful companies:

  1. Vision (to guide a company’s values and give it a purpose).
  2. Values (a set of guidelines on behaviors and mindsets needed to achieve the vision).
  3. Practices (the practical ways in which values are enacted).
  4. People (those who share the company’s core values).
  5. Narrative (the unique history and story of a company).
  6. Place (both the building and the location the company is in).

These are especially important during the startup phase of a company’s life.

Of course, there are other requirements for a strong culture. And while we’ll list a few below, it’s important to note that every company builds its own culture differently.

Look to your own company when establishing a strong, positive company. Here are a few things you might consider:

  • Work-life balance
  • Transparent decision-making
  • Open communication (both positive and negative)
  • Professional development
  • Compassion
  • Trust
  • Fun

The Opportunities and Challenges of Startup Culture

Startup culture has a complicated reputation. Some startups are renowned for how well they treat their employees. Others quickly drive their employees to burnout and have trouble retaining talent.

That reputation arises largely from two factors. One is an opportunity, and the other a challenge.

Shaping Culture at a Small Company

Startups and other small companies have a huge advantage over large organizations: they can make specific, intentional changes to improve their company culture. And if you set expectations from the beginning that your culture will be a good one, you’re on your way to developing an environment that can work as a great recruiting tool (we’ll talk about that shortly).

When there are only a handful of people at your startup, making a change to the culture can be as easy as calling a meeting and telling people about it. You might say something like, “I’ve noticed that we’re not communicating our priorities and activities very clearly. I’d like to change that—here’s what we’re going to do.”

It’s easy for a small number of people to adopt new practices. Once your company grows to 50, 100, or 1,000 people, it gets more difficult. But if you establish a strong startup culture that people care about when you’re small, it will help you grow successfully.

But startups also have a big cultural challenge.

Work-Life Balance at Startups

No matter what kind of culture you build at your startup, you’ll have to compete with a very difficult tendency: startup employees often work a lot. They give up work-life balance because startups require a huge amount of time to get up and running.

There’s no guarantee that work-life balance at your startup will be a problem. But it’s very common, especially among founders and early-stage executives. And because higher management sets a precedent for the rest of the company, that can end up being part of the culture.

Many companies just assume that this is part of the startup life and that they’ll get past it. They’ll encourage a better work-life balance later on in the company’s growth, they tell themselves. But that’s a big mistake.

Why? Because even if employees expect to live the startup lifestyle, your company will stand out in a big way when it comes to recruiting if you have a better, more supportive culture. And making changes once the culture has started to solidify is significantly harder than setting down expectations early.

Culture as a Recruitment Tool for Startups

Finding and hiring the best people for your startup is a challenge. There are lots of other companies out there that can probably offer higher pay and better benefits. So you need to use your advantage over your competitors: your startup culture.

The typical startup culture is scrappy, hard-working, and often completely without work-life balance. The focus is on growth above all else. But startups that have more well-rounded, positive cultures have a huge opportunity to get the best talent out there.

Of course, it takes more than work-life balance to create a culture that works as a recruiting tool. You’ll also need clear communication, respect, and trust. You’ll need to show your employees that you value them with perks and benefits. A mission that employees can get behind is important, too.

In short, you need to build a strong company culture—not just a stereotypical “startup culture.”

Three Steps to Take to Build a Great Corporate Culture

We’ve talked in largely theoretical terms so far. It’s easy to say that you should have strong values, open communication, and compassion. But how do you actually make that part of day-to-day life at your startup?

Here are three things you can do.

Build Culture Into Your Expectations

If you want your employees to behave in a certain way, you have to make that clear to them. You can’t just say that your company values trust and leave it at that. You have to tell people what you expect of them.

The best time to do this is during onboarding. By sharing your vision, values, and the practices that support those values when an employee is starting their time at your company, you don’t leave any room for miscommunication.

In your onboarding documents or trainings, include information about how you expect your new employees to behave. Tell them how specific practices support your vision and your values.

Is collaboration one of your values? Tell people how they can make the most of collaborating with colleagues in their daily tasks. Suggest collaborative coffee meetings. Let people know that your CEO is always happy to meet for a brainstorming session.

These kinds of specific details make it easy for new employees to jump right into the culture you’re trying to build.

Hire for Culture

Yes, hiring for culture has some problems. Quite a few people believe that hiring for cultural fit perpetuates bias and results in companies that lack diversity.

And that can be true. But it doesn’t have to be. Beamery’s “hiring for culture add” is a better strategy than hiring for culture fit. In short, you should be on the lookout for people that will improve your culture. They might fit in well with what you already do—but they might also challenge the prevailing standards.

If you’re not sure how to hire for culture without creating a workforce that lacks diversity, check out “Hiring for Cultural Fit Doesn’t Have to Undermine Diversity.”

Build community

This is a big part of building your startup culture—and it doesn’t cost a dime.

From the very beginning at your startup, encourage employees to connect with each other, build relationships, and seek each other’s advice.

Building this sense of community might be the most important thing you can do for your employees. It’s part of a strong culture, but it has many benefits beyond that, from more creativity to the ability to bounce back from difficulty.

How you go about building this community depends on your company and your employees. Some groups of employees love to go on outings together, from white water rafting to hitting the local brewery. But you don’t need to go on extravagant trips with your employees. You can do something as simple as encouraging a learning environment that sees employees relying on each other to learn new skills (this is an especially popular perk among millennials).

Building Startup Culture on a Budget

Some startups try to force culture by doing the “startup thing.” They have ping-pong tables, beer taps, and quarterly paintball matches. And these can certainly strengthen a startup culture.

But that’s not what you need for a great culture. You need a group of employees that trust each other, rely on each other, and believe in the company’s vision. None of that requires spending a lot of money.

Don’t get stuck in the trap of trying to be a cool startup for the sake of being cool. Instead, focus on the things that really matter to employees. Build a community, show people that you care about them, and commit to making a difference in the world.

You’ll be amazed at the level of commitment you get from your employees when you start with these basic steps.

Startup Culture Is More Important Than You Might Realize

As we saw above, companies with positive cultures handily outperform other companies. Combine that with numerous other benefits—like improved recruiting and more resilient employees—and you start to see why it’s so important to carefully craft the culture at your company.

There’s no question that organizational culture is a crucial part of long-term success. You can rocket to fame without it, but it provides the structure for continued growth. Don’t underestimate its importance!