If you're a quantitative, data-driven person like me, the concept of company culture has always seemed a bit on the "fluffy" side of strategy. If you can't measure it, surely it's nonsense. Furthermore, it seems pretty obvious. Good culture energizes employees, and bad culture makes employees toxic and destructive to your company. Simple.
But the reality is culture is messy and tricky, and yet extremely important for founders who have the opportunity to build culture before it builds itself (poorly). We see the difficulties in nailing down what "good" culture means in the vastly different yet both equally strong company cultures of Apple and Facebook. The former company found success on being focused on perfection, while the latter on embracing failure. Culture can even change dramatically within one company over time, as a company grows from startup to corporation (Facebook).
So, in fact, the dark secret company culture experts do not want to admit is that there is no one recipe for "good" company culture. The only guidelines a new founder can truly rely on are the fundamentals of human behavior, because these fundamentals never change. While your company and the external environment will drastically change over time, what motivates your employees will not. After all, while good culture is cute as a goal in and of itself, it is ultimately just creating an environment that motivates employees to do their job well that founders hope for. Economics and social psychology provide the two main blueprints for human behavior that underlie employee motivation:
1. Provide a well-thought out incentive system based on financial and non-financial rewards
Incentive programs that combine not only financial rewards but non-financial as well work to keep employees dedicated to the work at hand long-term. The main considerations in creating your particular incentive system are: the stage of your company, the resources you have available to use, the role of the person in your company, and the nature of the work needed to be done.
Salesforce does this well. To motivate salespeople to close deals faster, Salesforce provides a commission schedule that accelerates over the course of a quarter; a dollar of software sold at the end of a quarter is more valuable than a dollar sold at the beginning of the next quarter. By tying financial incentives to the time in the quarter, Salesforce employees are motivated to achieve the financial goals of the company.
Salesforce also promotes effective non-financial incentives by providing special social recognition of high performance. These non-monetary incentives have been shown to be powerful in motivating Salesforce employees to perform.
2. Provide outlets that reinforce the meaningfulness, authority, and feedback of employees' work
Social psychology, also provides prescriptions for culture based on the idea that humans are internally motivated. Social psychology explains that only when employees: 1) feel that their work is meaningful, 2) feel that they have authority over their own work, and 3) understand whether they are doing well through feedback, will they be motivated to perform.
Probably the most difficult of these to figure out is how to help employees experience meaningfulness in their work. Social psychology suggests that people experience meaningfulness when they consistently feel that their work: 1) is part of a larger, identifiable outcome, 2) has an observable positive impact on the lives of other people and 3) utilizes multiple skills rather than one.
Companies like SpaceX and Bombas do a particularly good job of this. At SpaceX employees report feeling very connected to the long-term mission and are continually reminded that each person contributes to this goal. All employees, from the cleaning crew to senior scientists, have almost full access to the entire factory in order to witness the construction of rockets in their entirety. This keeps employees tied to the larger outcome and helps them experience meaningfulness in their work, regardless of their actual job. Similarly, Bombas holds events where employees serve breakfast and distribute the free socks that their sales make possible to the NYC homeless population. This enables employees to feel connected to the mission and reminds them of the meaningfulness of their work.
So, what's a founder to do? The truth is there is no absolute truth about culture. That is, there is no fundamental formula for the content of company culture that will yield the best results. Company culture does, and should, vary widely from one company to the next and even evolve over the growth of your own company.
The only certainty in building culture is that you must understand and focus on appealing to employees' fundamental behavior by providing incentives that motivate, and strategies that authentically build employee satisfaction with their work. Understanding this fundamental behavior is the most long-lasting, and only true guide to culture as your company grows.