As you’re getting started with your new company, possibly the last thing on your mind will be defining the principles you want to run your company by for years to come. You don’t even know if your product will work or if customers will pay money for it. So why waste time on company principles? The answer is because the moment you start hiring your first few employees, the culture of your company will start to get defined.
A Foundation for Culture
Many people think a culture is something that just naturally develops from the collection of personalities and actions taken by the employees. And for sure there is a lot of truth to that. But what can you do as a founder or founding team to set a foundation upon which the company culture develops? The answer lies in what I and some others call “founding principles”. These are things you declare and are almost never willing to deviate from. They serve as the litmus test for critical decisions. They serve as the mantras employees will voice later and the bar they will try to always reach for personal recognition.
I’ve had the privilege to work for or advise a couple of company that are ideal demonstrations of this. One had a half-dozen or so core values (principles) that were set in the very early days and became so ingrained in the company that they were the culture. If you asked any employee what the company stood for, they could all recite at least three or four from the list. These included the following mantras that were my personal favorites and the ones most remembered by employees:
- We Under-Promise and Over-Deliver
- We are Easy to do Business With
- We Attract, Cultivate and Retain Exceptional Talent
Do you think this company had a set of litmus tests for critical decisions? Do you think every employee understood the co-founders’ position on how to treat customers? Do you think commitments were virtually always achieved? The answers are absolutely, positively.
Another company derived a founding principle early in their venture when faced with a critical decision on whether to release a new version of the product. They had a version that tested stable and was seemingly ready to go but at the last minute the team decided to delay another week to add in a quick feature that would add some really nice pizzazz.
Unfortunately, before going into the final regression tests that took multiple days due to the extreme high availability requirements of their target market, the new feature was still a little glitchy. The developer of the new feature and the head of sales were aggressively pushing to include the new feature. During a final decision meeting, the founder declared the answer: “running code wins”. And so the pizzazz feature was deferred to a future release and a founding principle was set. From that point forward “Running Code Wins” was the litmus test and a critical element of the company’s culture forever.
A final example I’ll give comes from a Fortune 500 company I worked for right after college. To this day I still remember one of the company’s three “basic beliefs” (the term they used). It is “Respect for the Individual”. I have no clue what the other two basic beliefs are but, decades after working for the company, I still remember one that most resonated with me. That’s because the company really lived by that basic belief, at least while I worked for them.
Culture Takes Over
As I mentioned above, founding principles are different than culture. The management team is able to influence and enforce the principles the company runs on but barely participates in the culture. That’s because the culture ends up becoming “owned” by the employees and is often somewhat vague or even invisible to the management team. Culture consultant Stan Slap preaches this mantra (http://www.slapcompany.com/).
To a very large degree, the most the management team can do regarding culture is to try and influence it through founding principles and day-to-day decisions and actions that hopefully support and reinforce these principles. For example, if a founding principle is “We trust our employees”, then a supporting action might be to allow employees to work from home a couple of days per week or to not have an entitled number of vacation days but rather let the employees work out appropriate vacation arrangements with their manager. Just realize that if the management team collectively violates a founding principle or doesn’t support employee-led ideas to foster it, then it pretty much renders it useless.
I’ll give you an example of this from the company that had “We Are Easy to Do Business With” as a founding principle. The employees took the mantra so seriously that they formed what they called an ETDBW committee that had cross-functional representation. They met on a quarterly basis to discuss ways in which the company wasn’t as easy to do business with as it should. They prioritized the issues, came up with suggestions and presented them to the executive management team. Can you imagine the culture violation that would have occurred if the executives didn’t take the suggestions extremely seriously and support most or all of them?
What core principles are you willing to run your business on? Think about it carefully, declare it and then live it every day and with every critical decision.