I've long told entrepreneurs that if the "why" of their venture is big enough, they'll figure out the "how."
One of our portfolio companies will double revenue this year and has enough backlog to at least do at least as well next year. This is creating lots of “good problems” related to growth (see post about “Good v Bad Problems”). During a conversation with the CEO, we discussed the importance of having a big balance in the Culture Bank.
When I founded my first company I knew nothing about running a business. I read a lot of biographies of entrepreneurs and talked with many successful founders, so I felt I was at least a knowledgeable novice. One consistent theme in all the success stories: the importance of company culture.
The leaders all treated culture as if it were a tangible, sacred thing. They were focused on building it--sometimes more than their product or operations--through various hokey methods.
One founder would have an all-company meeting whenever a new client signed on, and would tell a story highlighting how the work of someone *not* in sales helped close the deal. Cultural message: Every co-worker is essential to our success.
In another story, the founder donned a bridal gown and played Mendelssohn’s Wedding March as she strode through headquarters to announce a new customer. Cultural message: We’re marrying the customer for life.
Another CEO brought in the customers of the companies they sold to--people off the street--to discuss their trials and tribulations. Cultural message: We’re not just selling software, we’re trying to make life better for the people our customers serve.
While the specific messages varied, the themes were similar: There’s a bigger reason for what we’re doing, and you’re an important part of it. This reminds me of a quote I use often: “If the why is big enough, you’ll figure out the how.”
Eventually, I came to think of culture as a bank into which I should always be making enriching deposits. The benefit of building up a positive balance in the Culture Bank, I found out, is that no matter how well your business is going, you’re eventually going to hit rough patches and have to make withdrawals.
In my first startup we went from a guy in a garage to 75 employees in three years. Our revenue was exploding, customers were happy, and we were an industry darling. I copied parts of the CEOs’ culture-building activities above, and added my own spin (usually jumping up on tables). We were voted one of the three best places to work in our state.
Then we stumbled. Implementation quality was falling, go-lives were off schedule, support was delayed, new products were late, bugs creeped into the product. Customers complained and competitors lurked. We were teetering on the edge.
I made some management changes. Just as we had held company meetings to build our culture when we were successful, now we were gathering to buckle down for a bumpy turnaround. For us to survive, I had to ask for commitments above and beyond a what a “job” had the right to ask. I had to make withdrawals from our Culture Bank.
Everyone banded together because the “why” of our culture was worth it to them. No one complained or abandoned ship. The business had given them emotional fulfillment when times were good, and now they were giving their emotional energy back to the business.
Customers stayed with us and we got back on a steep growth curve. I fulfilled my end of the bargain--making deposits into the Culture Bank--by changing our business so we wouldn’t teeter on that edge again.
In the go-go early stages of growth, entrepreneurs can get lost in the daunting list of Things That Need To Get Done Now. Making deposits in the Culture Bank isn’t more important than executing on that list--a great culture with a lousy business is still a lousy business. The Culture Bank is your company’s rainy-day fund. You’ll need a positive balance--a “why” big enough to push people to figure out a “how”--to help climb out of the ditch when the tough times inevitably hit.
ALAN YING: Alan is an owner and the non-executive chairman of KLAS Enterprises, a leading provider of healthcare information services. Most recently he was a Venture Partner at Chrysalis Ventures, a leading healthcare venture capital firm based in Louisville, Kentucky. He was formerly the founder of MercuryMD.