If you’ve ever wondered why competing companies have a lower rate of employee turnover, while offering similar (if not lower) levels of pay – you might want to take a look at your work culture. Large companies and Multi-National Corporations are well known for their successful implementation of productive work culture, often giving them a significant advantage in terms of workforce morale. 
However, if you’re an entrepreneur in charge of your very own startup, chances are, you’re going to be missing out on such standardised processes and culture, that can truly take your startup to the next level. In this article, not only are we going to be dissecting what company culture is, how your startup can establish one, but we’re also going to be covering ways your startup can foster and retain the company culture in the long run.

Let’s start at the very beginning, what Company Culture is?

Company Culture

Company culture often referred to as work culture, can roughly be defined as the way your personnel react to different obstacles thrown at them. This may involve standardised processes and protocols that you might have put in place, a code of conduct and behaviour within the workplace, or even the relationship you share with your employees. 

The most common way a company culture is defined on the internet was spearheaded by entrepreneur.com. They defined company culture as a “blend of values, beliefs, taboos, symbols, rituals and myths (that) all companies develop over time.”

One key misconception that plagues the minds of entrepreneurs is simply surrounding the myth that company culture is created artificially. Usually, in a startup environment, the culture is heavily defined by the founders and the key decision-makers. The moment you, as an entrepreneur, hire or partner with somebody to bring your dream into reality. 

In fact, it is quite common for founders to lay on a checklist with the focus on building products and a healthy customer base first, attempting to focus on the company culture once they’ve reached a certain scale, not realising that some form of culture has already settled in, with or without active effort. The active effort component, however, is involved in ensuring that the company culture is in line with the goals and the purpose of your organization, and ensuring that your employees are happy, and more importantly, well-motivated to work even if (read, especially if) the financial offerings are on the lower side. 

Why is it so important to put in the effort to nurture a productive work culture, you ask? Don’t worry, we have you covered. 

Why is Company Culture Important?

It is important to understand early on in the business that your business is unique to your product, your team and your organization. No two companies, even if operating in the same industry, with similar scale and structure of the organization is the same (just like two human beings are never the same). 

Your company culture defines you, as an organization. It gives a sense of soul and personality to your startup, often leading to many people defining company culture as the ethos of your organization. If you think about it, your company culture defines the way you treat your employees and customers, and how you conduct your business. 

Yes, an amazing financial package and a “healthy” work environment can go a long way in promoting employee morale and productivity. However, if your startup is plagued with a toxic culture, with high levels of stress, and under-recognition of employees, we guarantee you, that your startup is doomed to fail.

Don’t take our word for it, experts have conducted many studies probing the importance of strong work culture. For instance, Baines and Company conducted a survey, sampling over 365 companies and 1200 senior executives on strong work culture. It comes as no surprise, that over 91% of these executives are of the opinion that workspace culture is as important as strategy for business success. 81% of these executives strongly believe that companies which “lack a high-performance culture are doomed to mediocrity”.

However, it is astonishing that only 10% of all startups treat culture as a priority, and actively work on it. It is no coincidence that the failure rate of startups is around 60-70% in the first two years. Forbes, on a study, found out that when a startup winds down, a major portion of the blame often is on the leadership, poor team composition, or emotional decision making, all of which can be directly attributed to poor company culture 

If these reasons haven’t convinced you, it is well established that 80% of employees consider the company’s culture before even applying to work. In fact, even potential investors tend to significantly  

If you are the one thinking out loud that “I’m sold, I understand the importance of high-performance company culture. How do I nurture my company’s work culture?” 

How can Your Startup Nurture a Company Culture?

As we’ve mentioned earlier, your startup already has a culture the moment you sign with a partner your company culture has already kicked in. However, it is up to you to define that culture, and see if that’s what is best for your business. 

While there are no hard-and-fast rules that you can follow to nurture a high functioning startup culture, there are some guidelines that you can follow.

    1. Define your mission, vision and the purpose of your organisation. While this may seem like a pointless exercise, it will allow you to identify parts of your company culture, and help you realise what you need to work on.
    2. Document your company values, sit together with your team and see what they think about your culture. How often do you collect feedback? How much is innovation rewarded? How stressed are your employees? These are only just some of the questions that you should think about.
    3. Treat your employees right. Not just financially, but with respect and professionalism that you expect in return from them. Treat your employees the way you like to be treated, and the results will follow.
    4. Communication channels – while both formal and informal communication channels are extremely effective, they do come with their respective pros and cons. See what lines you’ve to artificially impose, and what lines of communications naturally develop.
    5. Transparency is the key – Transparency is often the key for employees to develop a sense of ownership and realise that they grow as the company grows.
    6. Re-evaluate your culture regularly. See if your company’s culture is in line with what your organisation requires as it scales. While weekly pizza parties are amazing for a team of 10, it might be a little too out of hand when it’s a team of 100.
    7. Hire (and fire) for culture – Sometimes, the value an employee might provide in terms of productivity is negated by the unfavourable influence they might have on the rest of your team.  You must hire people in line with your company’s culture. Sometimes, it is equally important that you let go of people that cause long term damage to your company’s culture.

I’ve Established the Perfect Company Culture, Now What?

Once you’ve established your company’s culture, it becomes important that you preserve your company’s culture as it scales. Sometimes, you must adapt your culture in line with the growing needs of your business.

Most companies review the values and their culture annually, encouraging their teams to participate actively during these drills. Cultures evolve over time – sometimes incredibly in the favour of your organisation, sometimes, it evolves against. As your company grows, around the 3-4 years mark, it is common for your employees to face, what is called a “cultural chasm”. Your long-term employees can feel the difference in the working environment and can have a negative impact on your workforce morale.

Author: Parth Shah, Co-Founder, COO DevX accelerator  

Author Bio: With 10 years of experience in operations and training, Parth is a go-to person for his team and even a multitude of growing start-ups. His knack lies at spotting and supporting start-ups, helping them streamline their processes and even take their ventures to the next level. After successfully establishing two start-ups and exploring the start-up landscape up-close Parth has learnt the nitty-gritty of the industry, which he now shares with fellow entrepreneurs.

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