Is your start-up burning through cash and headed for a wall? Are your best people consumed by infighting or out interviewing for a new job? If so, your start-up may have wrong values. And those badly chosen values encourage the wrong people do the wrong things. That’s because your values determine whether you hire people who will work their hearts out to make your venture successful.
Mistakes in values hurt your start-up’s cash flow, because they cause you to spend money on people and other resources that get you no closer to positive cash flow. If your start-up is prototyping its product, the wrong values delay your ability to get a paying customer. And if you’re on to the customer base stage, the wrong values make it harder to close enough deals to break even.
How do you fix this problem? The first step is to admit your start-up has the wrong values and recognize that you should get outside help to investigate. After all, you might be the source of the problem.
And I would advise that outside helper to get you to ask yourself some questions: What do you consider the most essential values-- smart, ability to listen well, getting stuff done, working well with others? What do your customers value-- quality, service, low price? What five values will help your start-up hire and motivate the best people to prevail in giving customers what they value?
To help you brainstorm, peruse the list of six values from my 2003 book, Value Leadership, which found that the six values that follow helped eight publicly-traded Value Leaders to achieve superior financial and stock market performance.
1. Value human relationships. People make the difference in whether a start-up succeeds or fails. So your start-up should reward people who bring in top talent and motivate them to build effective working relationships with their peers, potential customers, suppliers, partners, and others.
2. Foster teamwork. People who work alone risk undermining your start-up’s survival. To be sure, many great coders are loners who did well on tests. But if you hire people who can’t work well with your start-up’s stakeholders, you risk a talent exodus and burning through your scarce cash.
3. Fulfill your commitments. If you can’t trust people to deliver, your start-up is likely doomed. You must hire people with a well-documented track record of making commitments to other people and delivering what others expect. And once you’ve hired them, you have to fulfill your commitments; reward people who follow that lead and punish the ones that don’t.
4. Fight complacency. If your start-up is going well, you are in danger of thinking that you have all the answers. And that complacency will cause you to ignore threats and opportunities that come to you from other people. To fight complacency, you must maintain intellectual humility and project an air of healthy paranoia--always looking for the dark side when things are good - but also seeing the opportunity in setbacks.
5. Win through multiple means. If your start-up is gaining market share solely because it makes a better product, it could be vulnerable. That’s because a competitor might be able to take away your customers through lower-cost manufacturing, better distribution, and superior customer service. Don’t bet your market position on just one skill; make it hard for competitors to copy your strategy by winning through multiple means.
6. Give to your community. Start-ups don’t have extra money to give to charity--but they should give their peoples’ time and skills back to the community.
Giving to your community is a business imperative because it signals -- to risk-averse employees who may not want to give up a secure job or potential customers who worry you’ll go out of business -- that you believe in your venture’s long-term success.
Once you have the right values, you should spend 20% of your time communicating them to your people repeatedly and use them to hire, promote, and manage people out of the company.
Your investment in the right values will help you give customers what they need - boosting your start-up’s market share and cash flow.