By Jason Graham-Nye
Co-founder and CEO of gDiapers
YPO member since 2011
They say that we are really only very good at one, maximum two things in this life. We could be blessed with great programming skills or product design, branding or financial wizardry. For those with that one particular skill along with a vision for an innovative, new approach plus the courage to actually act on the urge to launch a new venture, there is a very common and very crucial missing link. It can sometimes be addressed with a co-founder, but even two founders can be found wanting in this most important part of the business. I speak of culture.
While one, two, or three founders can come together over a laptop at a local café, devise a whole new mousetrap, quit their jobs and launch, it is very rare that the topic of culture and team come to mind.
Some attempt to pause and think about vision and mission, but there is typically a sprint to just build the product and go to market. There may be some work on identifying the best people to poach from elsewhere, but that’s not culture. That’s just thievery.
No, what I speak of is the deliberate act of creating a culture from the very beginning. What does that mean? It means establishing from day one how a company hires, fires, runs meetings, reviews performance, manages conflict and makes decisions. It is meaty. And it is vital.
Culture versus strategy
As Peter Drucker famously said: “Culture eats strategy for breakfast”. The very best strategy can be swiftly thwarted by a maladjusted culture. Many a founder has woken up three years in asking themselves “what just happened?” as they see their enterprise unravel — not because of a lack of sales, poor product, limited resources or a recession. Rather, it is the captain and crew on the boat that has failed, despite a world-class vessel.
A great example is Tony Hseih, CEO of Zappos.com, the online shoe company. Note that he doesn’t describe Zappos in that way. According to Hsieh, Zappos is a company centred on culture and happiness. 95% of his team are call centre operators, speaking with customers about their orders. You couldn’t find a more challenging environment to find enlightened culture and yet Hseih has done just that, creating a high-functioning work culture from the very first day in 1999 — well before Amazon acquired them in 2009.
What drove Hsieh to be so people centred? It was driven by a truly awful experience at an earlier start-up. Prior to Zappos, he launched a highly successful business, Link Exchange, that was ultimately acquired by Microsoft in 1998, for USD$265 million. It wasn’t until revenues had hit USD$100 million that Hseih realised just how broken the culture was and by then it was too late. He was so uninspired by the company that he himself had started, he could barely get out of bed. And so like all our life experiences, he took the lessons and applied them to his next idea. That’s what he did at Zappos. Seventeen years in, and now as a division of Amazon, Hseih continues to tweak the culture. Last year he famously introduced self-management in the form of Holocracy. He offered the entire company a financial incentive to leave if they didn’t want to be a part of this new approach. Only 10% took the offer. Regardless of whether you agree with self-management or not, the point is the founder is being intentional about the culture. And that is pretty rare. Like an untended garden, weeds can grow in any culture and soon engulf what was a beautiful space.
If you can’t do it, find someone who can
If you are a founder who sees the need but doesn’t have the skills to develop a great culture from your first hire on, hire a chief culture officer. This isn’t a human resources manager. This is someone who can work with you to co-create a high-functioning, adaptive culture. They may be a consultant and only engaged for the first three months of the life of the company, but their impact is crucial. If you choose to have them full time, they are incredibly valuable as a sounding board on people issues.
Regardless of what business you are in, from the geekiest gaming app to a consumer product, from financial services to retail, we are all in the people business. And it’s not the people “out there”. Those are your customers. Before you can get to them, you need to start internally: it all starts with the people in the building. Your people. Your team. Your job is to find them, inspire them, establish a culture within which they can thrive in, grow in, move up or move on and succeed personally and professionally. Because when your team succeeds, you succeed and when you succeed, your company succeeds. It’s that easy and that difficult. Start by hiring a chief culture officer.
This article first published on The CEO Magazine.