3 Ways to Create the Company Culture You Want

Successful businesses have learned to look beyond skills to whether prospective employees mesh with their company culture from the start.

As the founder and CEO of KeepSafe, a San Francisco startup with a cloud-based app for storing personal digital files, Zouhair Belkoura is well aware of how difficult it can be for a fledgling venture to attract and retain talent. Which is why he instituted a “test drive” policy for new hires, leaving the door open for them to simply walk away from their new position within a few days, no hard feelings.

Most new hires decide to stick around, but not all. “We just lost two really solid candidates this way,” he says.

That’s fine by Belkoura, who explains that he would rather focus not on what the company loses from defections but what it stands to gain from methodically building a company culture around people who feel they fit and who genuinely want to be there. Better to let a person walk away sooner to minimize the damage from a bad hire.

While Belkoura says company culture “is something we think about a lot,” all too often startup founders hurtle forward with a single-minded focus on getting to market.

“The typical startup mentality is to get their great idea out there,” says Marissa Levin, who three years ago launched Successful Culture, an executive coaching and consulting firm near Washington, D.C., that helps leaders develop healthy organizational cultures. “They work 24/7 to monetize their idea. They’re not thinking, ‘Maybe I should put certain foundational pieces in place’ around the culture of their company. And that’s a mistake, because they end up having to reverse-engineer their culture. A culture is going to form inside an organization no matter what. The question is, Are you going to drive it, or is it going to drive itself?”

A social contract

A veteran of half a dozen startups, Dan Merritts has experienced firsthand how tunnel vision can hamper a young company. “You get so maniacally focused on your product and growth. Then a year or two in, you finally look up and say, ‘Gosh, this isn’t the culture I had in mind.’”

With his latest startup, New York City-based newrow, which provides an online video-classroom platform for higher-education and corporate-training settings, he tried a different tactic. “We established a clear social contract for our staff and our organization, a sort of startup playbook that explains our cultural vision. By doing the work of defining our vision for a company culture, we have a guiding light for how to build out our organization. And that, I think, will help us to grow and adapt, and to achieve better results as a company quicker.”

Founders like Merritts have been around startups enough to conclude that there is a direct link between culture and bottom-line results. In their view, defining and creating a values-based culture right out of the gate can translate into a sustainable, high-performance, high-satisfaction workplace, instant brand differentiation and thus a better chance at profitability.

A strong, healthy internal culture serves as the raw material from which a startup may build the external brand identity.

“We fundamentally believe that our brand is our people,” Merritts says, “and that is what sets our company apart from some of our larger competitors. As long as we maintain that belief structure and people continue to buy into it, and as a leadership team we constantly reinforce it, we will see superior results.”

When launching newrow in October 2014, Merritts and his executives consciously sought to emphasize values such as trust in the team, personal ownership of decisions and simple problem-solving. “This has everyone rowing in the same direction,” Merritts says.

The founders of ride-sharing service Lyft put a similar emphasis on cultural engineering in laying the groundwork for launch in 2012, according to Ron Storn, a vice president in human resources. In the early stages, they identified four core values on which to build an organizational culture and brand: be yourself, create fearlessly, uplift others and make it happen.

Those values breed a sense of engagement among employees, notes Storn, who in the span of three years has seen Lyft grow to more than 450 employees. And that engagement “gives us instant momentum in new markets, which obviously contributes to the bottom line,” he says. “When your people are engaged, you’re going to have better results and you also are going to have lower turnover.”

Built from scratch

Creating a healthy culture “is really a bottom-line business problem,” says Sarah Nahm, founder and CEO of Lever, a Silicon Valley company launched in October 2014 that develops applicant-tracking systems for hiring and recruiting. “Your growth hinges on competing against established companies for talent, and your culture really is the only competitive advantage you have against companies that can offer much richer compensation packages, so it’s absolutely essential that you nail it.”

Nailing it doesn’t happen by accident. Rather it’s the result of deep thinking by the leadership team to identify the principles or standards of behavior on which they want to build a company, then developing practices, processes, rituals and other avenues through which to underscore, reinforce and sustain those standards as the company grows and its work force expands.

Nontraditional benefits like flexible or unlimited vacation time, abbreviated work hours and in-office yoga classes may help attract and engage employees, but don’t confuse cultural values with perks, Nahm cautions. “People now have different relationships to their careers, where they’re not motivated so much by perks as by substance, such as opportunities for success and growth. That—not all the fluffy perks—is what attracts top-tier talent.”

Once founders identify their values, the hard part begins: instilling them at every level of an organization, especially among new hires. “We can’t settle for mediocre talent, and we can’t afford a bad hire,” says Lyft’s Storn. “We want a cultural and technical fit.”

How do you measure for this type of fit? Collective Bias, a Rogers, Ark., company that runs social influencer campaigns via a community of bloggers, subjects candidates to a “cultural fit” interview in front of an eight-person panel of people from all departments. This not only allows them to gauge how the candidate’s personality meshes with core company values, it gives potential hires a taste of company culture, explains co-founder and chief client officer Amy Callahan. Once hired, the employee “has a group of eight cheerleaders supporting them,” she says.

Callahan believes soft skills matter more than hard skills when evaluating candidates. “A company’s culture can get lost as you grow,” she says. “I can teach people hard skills. I want to find people who share the values we prize as a company, like teamwork, community, being frugal and scrappy.”

To preserve cultural continuity, she adds, it’s wise to “keep founders involved in hiring as long as possible. When company leaders de-emphasize or outsource hiring, that’s when they lose control of their company’s culture, and in some respects, its future.”

BREAK-IN PERIOD

Want happy employees? Take a cue from these companies, where the aim is to get new staffers started on the right foot.

Instead of traditional job descriptions, Silicon Valley startup Lever creates “role” profiles that describe expectations for theposition and opportunities for growth in various directions within the organization. For new hires, Lever has a dedicatedzonboarding process called “ramp camp” that’s all about “getting people up to speed on tribal knowledge, customs and representing our company and our culture well,” says founder Sarah Nahm. “This is not about training to do the job, but how to be a good ‘Leveroo.’”

As part of the onboarding process at ride-sharing service Lyft, new hires receive a coffee card to encourage them to meet other employees and get to know the neighborhood. Every two weeks, the company honors an Employee of the Fortnight forgoing above and beyond in terms of company values.

At San Francisco startup KeepSafe, employees eat lunch together “to give people a chance to talk about work or other randomstuff,” CEO Zouhair Belkoura notes, adding that new hires get a skateboard, symbolic of the expectation that “their work will take them out of their comfort zone but that it’s still about having fun.” Each month, the company founders hold informal “happiness check-ins” with employees to see if management is meeting expectations.