Startups Blog

How to Build Company Culture in a Startup

Prakash Mana on What is Company Culture for a startupNine out of ten startups are doomed to fail. To keep a company healthy and successful, leadership must help keep its people healthy and successful. Establishing roles in a company and starting a company itself goes beyond salary and what needs to get done each day—it extends to what is going on and how it is going on. Building a workplace culture for a startup is crucial to finding success, and research from the U.S. and globally has insight into the first steps.

What is company culture? 

The values and standards shared by everyone in a work environment make up the culture experienced by employers and employees at an organization. Company culture is built through shared values, attitudes, behaviors, and standards in a work environment. In many ways, this culture is how an organization’s mission and values are executed in the day-to-day of the workplace. 

Key issues of workplace culture include how people communicate with each other, how decisions are made, and how people treat each other on the job. Workplace culture is the lived experiences of the people who make up the business, from new employees all the way up to leadership. Strong workplace cultures can make or break a startup, especially a newer one, because, in many ways, it is the organization.

Various studies have demonstrated that when employees feel seen, heard, and valued, they are more engaged with their work and more productive. They are also more likely to remain at the company for longer. This seems straightforward, but the culture at a company may be even more impactful than it seems. One study showed more than one-third of employees in the U.S. would turn down an otherwise perfect job if they felt they did not fit in with the organization’s culture.

What can a startup do to establish and maintain a company culture that will lead to success? Research shows there are a few critical steps to move in the right direction:

1. Define the organization’s mission and values

Leaders must first define what it is they want the culture to look like, what drives the company and its people, and what they want to do. Some organizations emphasize charity and kindness, while others focus on flexibility and fun. Defining workplace values doesn’t mean a company can’t be both fun and charitable; rather, a workplace culture will bring certain values and attitudes to the forefront of the operation. 

Discovering, recording, and sharing the business mission and values establishes a starting place and shared understanding for everyone. 

Questions to get started include: 

  • How will the startup serve its clients and community? 

  • What are short- and long-term goals, and how will everyone collaborate to achieve them? 

  • What is most important to this organization?
  • Once clearly defined, the mission and values can be shared and upheld, and they become a principal part of the company’s culture.

2. Lead by Example

Lead by ExampleThe organization’s CEO and other leaders can strive to exemplify the defined mission and values. An energetic, positive approach can inspire and motivate everyone, leading to higher morale and productivity

If a leader expresses a positive, resilient attitude in the face of adversity, their employees are likelier to do as well. If a leader approaches a less-than-exciting meeting with reluctance and shows up late, her employees probably will, too. This requires some self-awareness on the part of leaders. Leadership’s willingness to push for continual improvement not only in employees but in themselves is meaningful. 

For example, a leader who encourages feedback from their team and works to accommodate management-style preferences demonstrates that they listen and value employees’ feedback, which means employees will feel heard—and probably more productive and committed to the work.

3. Build Trust

Although trust in organizational leadership is slowly mending after a significant decline during the pandemic, only 23% of United States employees strongly agree that they trust the leadership of their organization. According to a Gallup poll, leaders can demonstrate trust in their employees by empowering them to make decisions and get the work done with certain freedoms. 

This does not mean leadership should not expect accountability. On the contrary, they should build accountability and autonomy by demonstrating these behaviors themselves. Leaders can avoid micromanagement while still providing guidelines and encouragement, and employees can learn to trust management in turn.

Another way to build trust and allow employees to feel valued is to offer employees a guide to ESOPs. This will give employees a sense of ownership over the business and retain talented employees.

This culture of trust will likely extend outward to clients as well and build the company's reputation over time.

4. Ensure Adequate Support 

Ensure Adequate SupportResearch suggests that up to 74% of U.S. employees said they sometimes felt burned out due to their jobs. Burnout is unfortunate for productivity and the business but can also negatively impact our mental and physical health. In fact, employees who experience burnout are 23% more likely to visit the emergency room. Sometimes, support comes in the direct form of sick days and flexibility, but other times, it can be provided via communication or through extra, at times, external, resources. 

Support extends beyond helping someone be successful on the job but to helping the whole person. Research indicates that mental health issues contribute to employees taking more sick days and developing physical ailments as well. By ensuring a thorough onboarding experience for new employees, providing ongoing training, and resources for mental health, leadership can help prevent burnout and help keep their employees (and their organization) healthy.

5. Establish a Safe, Inclusive Environment

When employees feel safe to share an idea, they are able to open up about what is working and what isn’t. They might be able to provide insights to leadership that improve how a team operates or even how a startup is run. 

Employees can only feel safe in an inclusive environment that emphasizes diversity. Multiple studies have shown that emphasizing diversity, equity, and inclusion (DEI) can increase retention, breed innovation, improve a company’s culture and sense of belonging, and, yes, increase profits. For a strong work culture, everyone must feel welcomed and valued.

Salary, benefits, flexibility—employees decide whether to stay at a job or move on based on these factors. Still, workplace culture is just as, if not more important, in whether an employee and a company thrive. Do employees feel empowered and valued? Does the job feel safe, inclusive, and supportive? Are there growth opportunities? 

Workplace culture starts from the top—and leaders must take it upon themselves to build a culture that benefits everyone. By doing so, they can carve a path forward for their company and its mission. Defining and sharing values, leading by example, building trust, ensuring support, and establishing a safe and inclusive environment guarantees the success and strength of an organization’s core—its people and culture.

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