The following thought piece is written by Lynne Oldham, (pictured) a member of our Strategic Advisory Board (SAB).Lynne is the former Chief People Officer (CPO) at Zoom & the current CPO at Stash.
While growing a rapidly scaling, venture-backed business has never been easy, founders in recent years have had an especially unique set of challenges. Whether it was a global pandemic, geo-political conflicts, or a seemingly overnight switch from a growth-at-all-costs approach to one focused on profitability, being a founder in the last few years has been very difficult.
As someone who has spent their career on the people side of organizations, of course, I’ve observed closely how these challenges have impacted company culture and the various ways founders have or have not reacted to these challenges.
Today, I therefore look forward to addressing one of the most common questions I receive: “How can companies create a strong culture in a rapidly growing business in a complex, ever-changing world?”
The first piece of advice I share with founders at rapidly growing technology companies is to invest time early on in the development of clear, authentic, and compelling core values as these are the foundation of culture. Oftentimes, when a company is in rapid growth mode, the last thing a founder wants to do is take time away from the business to tackle this important work. However, as a company begins to scale, its culture can quickly be lost if this integral process is overlooked. Think about it like this – if a company’s team is growing from 20 to 60 people in a few months, this would represent a 200% increase in headcount, in a short period of time. This means that two-thirds of the people in the company were not a part of the formative months/years of the business when the culture was established, hence putting the culture at risk.
Assuming that founders do decide to codify their values, what they often will find is just how difficult it is to articulate their beliefs concisely. To overcome this, I always recommend founders think about the core values they live in their personal lives and how they approach work. It is so important for founders to choose values that they can exemplify and live by every day as the culture of the company always starts at the top. For example, one founder who prioritizes work-life balance may be committed to a blackout on evening or weekend work, while another founder may believe that working late into some nights or weekends is important. Neither approach is inherently right or wrong. Similarly, there is no right answer as to what a company’s values should be. What’s most important is that they reflect actual ways of working and the desired employee experience.
Another important consideration when building out company values is thinking about the ways that these values will not only be discussed but also how they will be acted on – or as I like to call them, operating principles. For example, if a CEO wants “trust” to be a core value, what are the everyday behaviors and norms that employees must embrace to create an environment of trust? What do they want their line managers to actively do or say when working with their teams? Furthermore, when thinking about how to ensure these values become a consistent part of their organization, it is important to recognize that people are different types of learners. As I like to say, founders need to be consistently “dusting their values off” by embedding them in all-hands meetings and other communication touchpoints, thinking about how they are presenting opportunities and problems, while also understanding that there are all different types of learners – visual, written, and experiential.
Importantly, it is also integral to recognize how impactful the hiring process is when it comes to building and protecting culture. This is a founder’s first line of defense for their company. Every person who is hired will have an impact on the culture – some large, some small, but there will always be an impact. Therefore, in an environment where hiring is moving quickly, which often happens with scaling technology companies, it is important to find a couple of scenario-based questions that will get to the root of whether the candidate’s and company’s values align. Answers to these questions will often help get to the core of someone’s values quickly, saving time and resources.
One of my favorite topics to ask prospective employees about is their perspective on the balance between salary and equity as part of compensation. Their responses will indicate whether they are long-term thinkers who are true builders or if they are just looking for the highest cash bidder. Of course, I also take into account that everyone is at a different life stage and may have different needs and motivations. Nevertheless, it is helpful to understand where a candidate falls on this continuum.
But it is never enough to just write the values down or hire to the values, you must reward, promote, and performance manage to the values every day! From an internal perspective, one of the most effective ways to continue to foster a great culture is by rewarding people who consistently exemplify the values in their work. Whether that means recognition at all-hands meetings or increasing compensation, finding ways to positively reinforce this behavior makes a real difference. At the same time, it is important to recognize that every person is motivated differently and should be rewarded differently based on what they value most. As we all know, there are some people for whom a verbal shout-out in a team meeting is the farthest thing from a reward, while for others, it is the greatest reward.
The final point that I want to share on culture today is regarding a situation where a company hires an employee who is a serious liability to their company culture. No matter what processes are put in place or how good the interview questions are, mistakes will happen. However, the greatest mistake of all is not acting as quickly as possible and moving on from that individual. When you miss and hire someone who is not aligned, they will rarely change. Time and time again I see founders spending too much time and energy trying to change one employee. Act confidently and act quickly, your company culture is at stake.
While the challenges for rapidly scaling technology companies have never been more formidable, the opportunity has never been greater. One of the most powerful ingredients for a successful company is a great culture. I hope some of these thoughts regarding the importance of building out a company’s values, how to build out their values, and the importance of positively reinforcing them will help founders on their journey.