Two Sweet Spots for When Startups Should Implement Company Culture
Identifying the optimal timing for startups to formalize their company culture.
You can start to define your company culture at any time in the company's life cycle.
Company culture exists, whether you like it or not and the longer you wait to define your culture, the harder it gets. If culture is left undefined it is developing invisibly and unconsciously - by default, not by design. Bad habits and practices creep in with the good as the company progresses and the team grows. Reversing or undoing these habits and practices is hard to do because they become ingrained into the "way we work around here", and on the surface, they appear to be working. The bad habits and practices may be working for now, but they become serious issues when the company starts to scale.
The stages where the implementation of a company's culture is most efficient and effective:
1. When you found the business
Instead of choosing to focus on only building the product, you focus on building the product and defining the culture at the same time. Granted, it takes more effort at a time when there is less time and resources are scarce, but you are investing in the foundations of the business and the ROI is real. Take hiring. As a startup you really cannot afford to make hiring mistakes. You just do not have the runway to learn that 3 or 6 months down the line your new Commercial Director is not a good fit for your team and the culture. You will save time and money if you and your team are able to make better hiring decisions, by defining your company culture and matching candidates to that culture.
2. Before you start to scale the business
Once the product market fit is demonstrated and the business model works, the company will hopefully raise a big round and prepare to scale up. This situation normally results in companies being desperate to make new hires to fill the gaps, and if the culture has not been defined it is impossible to consistently hire candidates with the right culture match. As the headcount grows the founders become spread too thin and are no longer able to be the effective cultural glue for the company that they were. This is when the original culture starts to become diluted and where a lot of startup companies that attempt to scale, fail.
So when will you start to define your company culture?
