One of the most important things to get right when founding a company is its culture. You don't need free gourmet lunches or Ping-Pong tables, but your company does need a blueprint to follow for every decision, system, and action.
Anthony Tjan, the CEO founder of venture capital firm Cue Ball and co-author of Heart, Smarts, Guts, and Luck, writes in Harvard Business Review about how to build a scalable culture.
"Great performance can never come without great people and culture, and the opposite is also true--great people and culture are affiliated most with high-performing organizations," Tjan writes.
He says it doesn't matter which one drives the other, but companies need to recognize the interconnection from their inception: "The team is the company's raw DNA, the purpose their religion, and culture their unique way of operating based on common principles, norms, and values," he writes. "Like aiming a rocket ship into orbit, if you get this wrong from the start, your trajectory will only get worse over time."
Below, read Tjan's tips on how to build a culture that will ensure your company launches with the optimal trajectory.
Solidify your mission.
Tjan says that Mats Lederhausen, who has built successful cultures as the co-founder of Redbox and chairman of Chipotle and Roti, taught him that you need to begin by formulating and understanding your "why" statement. "This is about mission, not marketing. What calling does your business serve? This should feel authentic, inspirational, and aspirational," Tjan writes. "The companies with strong purpose are the ones we tend to love best because they feel different--Chipotle, Pret a Manger, Ikea, Container Store, or Apple to name a few. Whether it's trying to just offer better food, or democratize great design, the cause behind the brand is clear."
Lay out your values and standards.
After your "why" statement is all set, you need to set values and standards to help reinforce it. Tjan says his mentor, Tsun-yan Hsieh, who worked in leadership positions for 30 years at McKinsey, taught him a framework for doing so that can be applied to any business. "Great cultures need a common language that allows people to actually understand each other," he writes. "First, a common set of values, which are the evergreen principles of the firm, and second, a common set of standards by which a business will measure how they're upholding those principles."
Live your culture.
As the leader, you need to be the living example of your own culture. Company leaders "must be the strongest representations of the firm's culture and purpose, not just writing or memorizing the mission statement, but rather internalizing and exemplifying what the company stands for," Tjan writes. As examples, look at how Steve Jobs defined Apple's culture and how Richard Branson continues to represent Virgin.
Support your cultural ambassadors.
You cannot keep your culture alive by yourself. You need a team of culture ambassadors, people who bleed your company's culture and purpose. If that culture and purpose are strong enough, ambassadors will manifest naturally. But Tjan says you need to make sure they know and feel how important to your company they are: "Do you know who these people are? Have you rewarded them and thanked them? At a time when outsourcing functions such as customer service or automating checkout procedures are becoming more common, the role of frontline cultural ambassadors does not diminish, but rather disproportionately increases and can become a real competitive advantage."
Hire for character, not skill.
Skills can be learned and honed, but character cannot. Tjan says that in order to perpetuate your company's culture, you need to look for employees who not only are talented but have the character that fits within your company. "The mantra at our own firm is that in the end it's always about people and character," he writes. "When recruiting folks, spend more time screening for character than you do screening for skill."
Tjan says he got this hiring practice from Southwest Airlines, which refers to its practice as "hire for attitude and train for skill." Tjan says you need to hire A players, because great employees will attract more great employees. "Compromising on talent that is good enough but not necessarily the best you think you can get, especially in pivotal job roles, is a sure formula to short-circuit your own culture and long-term performance," he writes.