Importance Of Organization Culture For Startups – Sirisha

Leader : Sirisha Bhamidipati -Management Consultant focused on People Capital


I am Sirisha, I’m a culture consultant. I work with a small, medium size companies, help them build the right culture that is aligned to their strategy that will help them in their growth. One of the things that I often get asked when I’m addressing early stage startup founders is when is it the right time to build culture?

My answer to that is when you hire your first employee. Now let me, let me step back and actually explain why I’m saying this. Right. Typically you know, the what I hear from the startup founders, early stage company, CEOs and entrepreneurs is you know, there are hundred things to do for us in the day and we need to get customers.

We need to ensure we be getting the right revenue. We should be able to show the right returns so that we are able to get investment funding. And then 90% of their problems are revolving around their customers, their employees, and all of that. Right. So essentially there’s so much on their plate every single day.

So building the culture in the company tends to fall in the important, not urgent care. You have seen, I’m not going to name any companies. So in while I’m talking right now, but we weren’t seeing a lot of these startups that have raised funds. And then when they were at the time of this scaling, they’ve actually collapsed.

And a lot of reasons that are given is a toxic work culture, misaligned processes, huge communication gaps, existing in the organization, et cetera. So that’s why I strongly insist that culture is something that needs to move from the important, not urgent category to the important and urgent category and culture and strategy are as important to a young company, a startup, well as anything else, right.

And both of them need to go hand-in-hand. So while strategy is going to help you you know, get the roadmap and you have your goals and it’ll help you drive get you closer to your goals. Culture is what is actually going to help your people decide how are they going to achieve those goals and how are they going to stay aligned to the company without either of them a company can never imagine growing. 

So while you know, Oh, you know, your strategy or your revenues, all of that is important. Culture has a huge impact on your bottom line because the biggest thing is your employee churn. Okay. It’s possible for every company to go ahead and hire employees, but retaining them is your biggest challenge.

And every time you lose an employee, there’s an additional cost that you have to bear which, which is significantly higher, right? In terms of, not just the monetary value, but your whole hiring costs, training costs, getting that person up to speed and the lost time in this process, then culture is what is going to help people stay motivated in the company.

A lot of times you see that as organizations keep growing, there’s a lot of miscommunication. There’s a lot of silos that are formed in the organization. There are pockets of pockets where you don’t see the trust that is there. So overall decrease in motivation, which is which actually results in a decreased productivity.

So what are you going to get out of your employees goes down much further. So to ensure you are able to execute your strategy, one of your biggest, the only capital other than the real capital that matters the most is the people capital and getting that people capital motivated and staying aligned is as critical as it can be.

So what do we mean by culture? And a lot of times when I asked this question in forums, people talk about a lot of employee engagement activities, right? So they say we have these foosball tables, we have flexi workers and we do a lot of these fun things for employees.

 While all of that is a integral part that it by itself is not culture. Culture is a lot more, building culture for your organization is a lot more scientific process about thinking how things get done in this company. Right? So it’s a very, very deliberate decision that the founders and the CEO, CXOs have to make right.

It’s about defining how work gets done in this company. What will be recognized or not be recognized because defining that explicitly very clearly will help your employees get a direction about how things should get done in the company. Right. And that’s why I say it’s important that you define the culture of the workplace from when you have your first employee.

A lot of times early companies in the startup phase where it’s the owner/ founder driven culture, where it’s the owner/ founders values and the passion that they bring to the table that gets things done. It’s important as you start growing, it’s important to ensure this is not lost in communication. And so defining that culture has to happen.

And what does culture help us in? Right. Culture helps hire, train, develop people and also retain people. It’s all to do with the kind of people that you want to hire, train and develop. Why is this increasingly becoming important? If you look at the other side of the table, right? You have these employees, the whole workforce.

Now there’s been a drastic shift in the mindset of this workforce, right? Earlier times probably two generations before you would see that people started their career in one company, continued working in the same company till they retired. There was this phase of work phase and that retirement phase and all of that right. Now, those lines are dividing.

What do you have out there today in the market is a very, very, very empowered employee. The employee knows what they want. They have their own personalized definitions of what success means to them, what happiness means to them and what kind of a place do they want to work? Increasingly you have people checking and why have Glassdoor and other places become so popular today because people increasingly check the kind of culture in the workplace that they’re about to go into.

And so you see this empowered employee has very less dependency on one company for fulfilling their needs, right? To get where they want. Money is important. The roles are important. Titles are important, but even more important for them is the kind of place. They want to spend their major part of the day, more than 60% of the day, the kind of people that they’re going to be interacting with, working with, all of that are becoming increasingly important.

I in my experience, I’ve seen so many people leaving companies where they have explicitly said that they’re leaving the company because they don’t like working at that place. It’s not the nature of work. They go for similar roles, but they go for other companies because they don’t like the nature of the workplace.

So it’s become extremely important and it is what is going to make or break the future of organizations today. So it’s very, very important that companies, you know, having defining, spending time, defining the culture and the CEOs, the founders take that extra effort to actually drive this culture within the organization.

Now like I was mentioning earlier, what do you mean by culture? It’s about how people behave. All the unwritten rules, right? It’s about how people behave when nobody’s watching. It’s about how work gets done in the company. It totally defines how people interact with each other, right it’s interaction between employees.

It is interacting with the management, it’s interacting with the external stakeholders and the customers. So culture of the company defines how all of these things happen. Maybe in another conversation, I’ll talk about some of those examples. We’ll talk about real examples in companies and how a culture is actually either helping the company grow or helping some companies collapsed.

The other part that I wanted to also talk about today is purely from a owner /founder perspective, right? Why is culture so important? Very recently, I was having this conversation with the CXO for financial FinTech startup. And one of the things he was saying was they’ve been there in the business for more than four years.

They’ve been hiring the best in class people and still, they don’t see, he doesn’t see that motivation or drive and he sees. , you know, innovation, creative thinking is missing and I’m getting the brightest minds. So I don’t know what’s going wrong because I keep telling them that they need to be innovative.

They need to be creative, come up with creative ideas. And so I spent some time with talking to his next in line and their employees in general spend a lot of time in there, talking to their teams. And the biggest thing I realized is it’s a culture where there was no trust. So, if you have to drive innovation as a culture in the organization, it’s important that people should be okay to fail, right.

And everybody should be okay to talk about failures and accept failures. And here’s a culture in that FinTech startup where there was absolute lack of trust. So failure was held against people. And people were supposed to, uh, everything was supposed to go, right. People are you know, something didn’t progress.

They would have these frequent reviews and some things didn’t progress. They would be questioned. And if the person at the other end and what was important was the output rather than the, what went through. While those timelines deadlines are important. 

Suddenly, when I spoke to or close to about 50% of the organization, we realized that people are scared to experiment because they just want to go with the tried and tested path and get things done in the specified timeline. Then we did a lot of work around it to build innovation as a culture in the organization. And today they’re like they’ve got recently got a huge amount of funding and they’re growing really big.

But bottom line, these are the problems. These are problems that are going to have haunt CEOs, right? They say we thought we identified a purpose but something is missing. People still don’t seem to be aligned to the organization or they say, you know, we wanted to talk about you know, creating this culture of collaboration, but I still see people being extremely insecure and operating in silos.

These are problems that each of you, you know, as the CEOs or the founders are going to face and all the root cause for all of these is not really working on spelling out your culture early on. So and again, clearing culture, right? Like I was mentioning about, you know, you want to reach your vision or mission.

You need to have your culture and strategy work hand in hand and people leave company, people today, the empowered employee that we were talking about leaves company today not just because of their role or pay, but they primarily leave because of the culture, the negative culture.

That’s something that is bringing down the performance. So it’s important that both of these go hand-in-hand. Now, what do you mean by defining culture? I mentioned about culture being those unwritten rules of the workplace, right? How things get done in the workplace. There’s a very, very scientific way you can go about by defining a culture where you, you know So when we do it with companies, we have our proprietary framework called the culture dilemma where we are looking at resolving some, some of these dilemmas, right? Under your strategy and how you want to execute, under your people strategy, under communication, decision-making, customers in market the team, the distributed teams that we were talking about, right.

The distributed workplaces today. Building your culture has to be well thought through process needs to be done early on and you need to actually get into what are those core values for your company. Again, that’s another thing that I wanted to speak about in this call.

Values are not something that are restricted to your plaque. This is what I recommend to companies. Values very precious, values are your differentiators as a company. So define those values that are actually going to serve your company. So don’t go with the, when you know, people talk about values in people still keep talking about integrity and respect and humility and things like that.

I keep saying that. They were good probably 15 years ago. Now they’re all permission to play values, right? These are values that, that your business will exist only these values are there, right? Without integrity, without trust with without respect in the workplace your company is going to come down. 

So let’s not define those. Let’s assume that those are given because we want to be in the business for the long longer run. And let’s start looking at what are the values that are going to be differentiating us from the competition and create those three or four values that you want to stand true to.

And when I say you want to stand true to let’s say you want to build collaboration as a Keystone value in the organization right? You build your entire benefits, rewards, recognition, everything that are aligned to your core values, you hire people based on your core values.

And you keep talking about a lot of stories and what happens in the organization around these core values. So building everything that you do around your culture has to revolve around these core values. So people get to understand the importance of it. It’s something that needs to be spoken about on and on.

And maybe another talk we’ll talk about orchestrating culture and organizations and how critical and how deliberate it needs to be. That’s extremely critical to ensure that you’re not just defining, but you’re actually bringing your values to life by aligning everything to do with people around these core values.

So again, here, make sure you’re defining four or five core values that are going to be very unique to your company that is going to be very personal to you in alignment with the purpose of the organization. So define those four or five core values, and be very deliberate in executing these core values and bringing these core values to life by revolving all the people practices around these core values.

You know, how you give the benefits, the rewards recognition the kind of people you’re hiring, the kind of people you’re letting go. Also, have to be around these core values. I think what I would say is, be very deliberate and start building culture from when you have your first employee.






One response to “Importance Of Organization Culture For Startups – Sirisha”

  1. […] I also think that organizational culture to some extent will be determined by the stage or the life stage of the organization itself. For example, in a startup, it is important to be really entrepreneurial, really innovative, flexible, and almost…. […]

Leave a Reply

Your email address will not be published. Required fields are marked *