Founders and Executives: Your Startup Is Your Baby

If you’re a parent, take a look at your child. Think about the things you did when they were a baby — the culture you raised them in, the principles you live by as a mom or dad, and the aspirations you maintain for them as they get older.

Almost everything you do is influenced by the hope that your child will grow strong and succeed in life.

Now, compare that to how you treat your company. As a founder or executive team member, why should the way you manage your startup or expansion stage business be any different?

When I work with our portfolio company’s management teams and offer them operational support, one of the first things I observe is the company culture. What rules do founders ask their employees to live by? How strict are their guidelines? What role do employees play in determining performance goals and expectations?

Like a lot of households, the culture at most startups and expansion stage businesses is established by the people in charge. Are they hard-nosed rule setters or more relaxed free-spirits? Is there a culture of discipline and power, or creativity and self-accountability?

There are numerous management philosophies (like parenting styles) that foster different forms of that culture. But in my years working with early stage companies, I’ve found that company culture can often be broken into three distinct types:

 

Power Culture

I define Power Culture as one in which the executive team is highly directive in all aspects of the business’s operations. There’s no room for idea sharing or change management, direction is in the executives’ hands, and employees are responsible for executing that direction. In general, teams seem to be micromanaged and uninspired.

Supportive Culture

The easiest way to describe this type of company culture is to label it “warm and fuzzy.” In a Supportive Culture, people are challenged only to do their best and that’s often good enough, regardless of outcomes and results. Goals may exist, but there is generally a lack of consequence and creativity.

It’s important to note that there’s a big difference between creating a loose, relaxed, and innovative corporate culture (like Google has) and establishing an overly supportive one that doesn’t also encourage performance. You want your employees to take risks and not be afraid to make mistakes. But supportive cultures often do those things without any sense of measurement, review, or discipline.

Performance Culture

This type of company culture is a kind of hybrid category of the previous two. A performance culture is one in which every employee works with transparent goals and is empowered to challenge each other to reach them. There’s a high degree of accountability between teams and departments to achieve targets, and that culture tends to spark innovation and creative thinking.

What’s your company culture?

If you’re not sure which category you fall into, try taking Inc.’s corporate culture quiz. Answering its list of 15 true/false questions (which include “Senior management says the door is always open — and they mean it” and “We have performance reviews less than once a year”)  should give you a much clearer picture of the culture you’ve established and how it might affect your employees’ and business’s performance.

Here’s my analysis of the three culture types above: Many of the companies I’ve seen grow into big businesses have all established a Performance Culture. They were able to strike the right balance between empowerment, goal-setting, performance measurement, and accountability.

As a result, their exits, morale, and revenue were all high.

The important thing to remember is that as a founder or top executive, it’s up to you to infuse your own core values (the same ones you try to instill in your children) into your company and its corporate culture. That’s what company’s like Zappos have been able to do, as founder and CEO Tony Hseih laid out for the Harvard Business Review.

So, are you you raising your company like you would your baby? If not, maybe you should be.

Brian Zimmerman is a Managing Director at OpenView responsible for delivering value-add consulting service through Openview Labs. You can follow him on Twitter @BrianZimm1.