I have highlighted the critical things needed to scale: articulating your values, building diversity, equity, and inclusion into your foundation, building your team, setting up structures and practices that lead to the culture you desire, leadership development, recruiting, people operations, onboarding, talent management, organizational design, and team development. Each chapter provides ideas, tools, and issues for the startup and scaleup phases so you can both learn about your current situation and also see what's on the horizon. I realize that the journey from startup to scaleup is not linear and there are times when you need to reduce headcount and I have a chapter on best practices for doing that (Chapter 35).
Chapter 24 Values and Culture
Driving alignment on values and culture will guide you in nearly everything you do. Your values help you find and hire the right people, reward and recognize people and behaviors, influence your organizational structure and operating system, and help you make decisions. Your values also shape the things you don't want to do, or shouldn't do: they prevent you from hiring people who don't fit your company, they guide you on the markets you'd like to enter, or ones you don't want to enter, and they frame how you select vendors and customers. Your values also influence the culture that you build.
Culture is the sum of the everyday behaviors of employees—how work gets done, how people interact with each other, and how they exemplify the values. For example, if leadership team members make every decision themselves without including others, you'll soon find that the culture of the company is one in which everyone waits for a leader to make a decision before they take action.
You may run into a CEO who just wants to build a business and isn't interested in the culture. They may believe that business takes priority over culture, that culture is just “soft stuff,” or that it doesn't add value. There's a quote attributed to Peter Drucker that “culture eats strategy for breakfast”; as Chief People Officer, it's important for you to help people understand the importance of culture to support the business strategy. I don't advocate for culture over strategy. It's just that many executives focus only on strategy, and you can help them add culture to their perspectives. If you're in this situation, you can help paint the picture of what the company will look like if you aren't focused on culture and values from the very start. You are going to have a culture, and the options are to build it intentionally or let it happen by chance!
Every person you hire at an early stage has an outsized impact on the culture. If their values don't match those of the CEO or executive team, they won't be successful in the organization, or they will build a toxic subculture that is hard to dismantle. Until they leave the company, there will be tension and unproductive conflict which wastes time, resources, and impacts productivity and engagement. For example, suppose you have a CEO who values transparency and direct conversations and you hire a leader who is more political and is not transparent with their colleagues. That individual is unlikely to be successful, and the reverse is true as well.
Being able to hone in on the values and culture your team wants is an iterative process, and the starting point will differ depending on how strong a vision the CEO/founders/leadership team have about culture. The number of people involved in the initial process can make a difference, too. If you have three people, you can become aligned more quickly than if you have a dozen people. To get things going, have conversations with a small group of people, just the CEO and founders or, if the team is small, the full leadership team. Start with a conversation about what matters to the stakeholders: What do they care most about and what's the best culture they can envision? Or, you can start by asking what legacy the CEO/founders would like to see the company have. Here are a few topics you can ask about:
How do you think about hierarchy and decision making? Do decisions need to be made at the top, or do you want people to feel empowered to make decisions themselves?
What is the level of transparency that you want? Do you hold this as a value? Would you rather be fully transparent about everything, or operate on a “need‐to‐know” basis?
Will you embrace a remote culture, or do you want people to work in the office? (This topic is especially important right now, as we manage through the global pandemic. It's an opportunity for companies to rethink their priorities and explore whether a remote culture works for them.)
How important is diversity to you? If important, what does it mean to you?
How do you feel about corporate social responsibility? As a startup, how much effort do you want to focus on this?
How innovative do you want or need to be?
Do you value speed over quality?
What's your financial model? Will you reinvest any profits in growth? What responsibility do you feel for sharing profits with employees?
Do you value a work hard/play hard model or do you want to focus on more of a work‐life balance?
Do you have a preference for building everything in‐house, or are you willing to partner or outsource?
Your role as Chief People Officer is to help continue that conversation, to facilitate it so that alternative voices are heard, until you have enough content to articulate that culture. Once you're comfortable (as a team) on the culture, shift your focus to values. Look online to find lists of company values—either through articles or looking at different companies' websites and pull together a starting list of values for the team to explore. The list should be broad and encompass some of the diverging viewpoints you heard. You'll want to have another conversation with the CEO/founders/leadership team about values. Your aim in this conversation is to narrow down the values list to the most important three to seven values.
Getting alignment on culture and values is the best use of your time as a startup Chief People Officer and the results will carry the company far, since the culture and values impact every facet of how you work together and how you approach and solve problems. Your company's values need to be ingrained within the people in your company and it's something that you, as Chief People Officer, will measure, evaluate, champion, and help course‐correct as your company scales.
As you grow, you'll want to build deep skills in the company on how to talk about your values and tell stories that demonstrate your values in action. This helps to make values part of your company's DNA and when you grow, the values will grow with you. While people may have an intellectual understanding of values, they'll also need to be able to see them in action concretely, and you'll have to help them recognize and reward values‐based behaviors. At Return Path, we built values into every people practice: we interviewed people on values alignment, we had story‐telling sessions during onboarding, all our rewards were based on a value, we highlighted people who embodied the values, and we evaluated values‐based behavior in promotions and performance.
You'll also periodically evaluate whether the stated values still accurately reflect the actual and desired behaviors. Generally, values don't change over time but they might if you've experienced a change in leadership or if you realize that you missed or misstated some values at the beginning. It's not uncommon for the leadership team to refine the values over time, to help them be more clearly understood by employees. This is especially important if you're growing very fast, if you have remote workers, or if you're geographically dispersed.
At Return Path, about 10 years after our founding (in 2008), we experienced a large growth spurt, including international growth. We weren't sure if the mission and values we started with reflected who we had become. We ran a company‐wide values exercise to better understand what was most important to employees. Everyone at the company
