Gallup found 70 percent of American workers were disengaged on the job, which in turn is costing the economy an estimated $550 billion in lost productivity. Is part of the problem related to culture?

Too many times CEOs don't actively or consciously build culture. They tend to let the culture piece of the business develop organically--and that just doesn't work. In the absence of a nurtured, fostered culture, it still develops. But, what is left is a fragmented or uncomfortable culture that doesn't engage the right talent.

Following are the foundations I have used to build positive cultures in my last three companies.

  1. Choose A Location That Doesn't Suck -- Startups by definition have only a few employees, most less than 10. To jump-start your culture you need to get inspiration from your surroundings. Being in a cool part of town with restaurants, other startups, and free thinkers will instill the same aspects in your company.
  2. Hire For Culture -- "Hire character. Train skill." The well-known quote from Peter Schutz (former president and CEO of Porsche) sets up this second point perfectly. A lot of CEOs forget about the culture part when hiring. In reality not all employees are A players from a job ability perspective. But, some are A players from a fit or culture perspective. When hiring you have to be disciplined and always remember that culture is a big part of the hiring process.
  3. Fire for Culture -- While you need to hire for culture, you also need to be disciplined enough to fire for culture. The worst thing that you can do for morale and culture is to keep poor performers. Performance can be work output, but it can also be negative vibe output. When you allow a poor performer to stay you tell the other employees you don't care enough about the business or their success.
  4. Celebrate Success -- So many small companies fail to celebrate success. It generally happens because the founders see the giant road ahead and feel like celebration is premature and perhaps unwarranted. It's important to understand that the celebration is not for the founder or the CEO; it's for the employees who often have a completely different metric of success.
  5. Be An Open and Transparent CEO -- If you are honest about the successes and failures of the business the likelihood of employees staying with you through good and bad is much higher because the relationship is more personal. Insulating employees from things only forces people to create their own reality. Own the message so that the message doesn't own you.
  6. Keep the Rules Flexible -- When a company, especially an early stage company, has a lot of concrete rules, it usually means that the CEO wants to avoid conflict. And, that is counter to what a good place to work is all about. I have worked with a core set of people for nearly 18 years and everyone has their own special needs. Embracing these creates a situation where working somewhere else seems unrealistic to them.
  7. A Fish Rots from the Head -- Culture starts at the top and flows down. A lot of smart people are CEO's, but there are also a lot of bad CEO's. You have to recognize if you need to leave the culture building to someone else. But, this has to be one of the top three people in the organization and you have to empower them to take charge of the culture. You can't hire an employee and make them the "VP of Culture" it's too forced.

If you are the CEO of a startup or want to be the CEO of a startup, your statistical chance of success is very low. The odds can be even lower if you are not conscious of building a culture. Worry about the right stuff--and at the center of that right stuff is culture.


Published on: Nov 4, 2014
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