How to Create a Scalable, Human Culture for Startup Growth
6 Takeaways for Startups from the 2016 WorkHuman Conference
Luke Fryer was new in town. In 2007, the serial restaurant entrepreneur had just moved to New York from native Australia. Naturally, he did what anyone does when they move to a new place–he created a Match.com account. However, what he found was much more than a girlfriend or even lifelong companion – it was the inspiration for a new venture.
“The technology is really a human marketplace,” says Fryer. “Match is a talent marketplace where boy meets girl. So I thought I could build one that is candidate meets employer.”
That inspiration led to the 2013 launch of Harri, a New York-based tech startup, which provides a professional social network for the hospitality and service industry. In just under three years, the company grew from four to 80 people with offices in both New York and Ramallah in the West Bank of Israel. And while the client list has skyrocketed and the product has been honed, Fryer admits that the company’s culture has yet to be defined.
“We continue to define our culture every day, but I think we did ourselves a disservice in not concentrating on how to package what it means to work here,” says Fryer. “My hope is that our culture oozes from our skin and affects others. But we have not yet been successful in creating a cultural process. It’s hard to focus on.”
Messy, organic, human startup culture
Fryer is not alone. A great many entrepreneurs face these crossroads. The business idea begins to really take shape. You have a list of clients that love you. But with the success and cash flow comes another issue, the company must now scale. It must preserve what is sacred in the culture while achieving that scale.
And the pressure to solve this is paramount to the sustainability of organizations. The expectations on a more human workplace have become more heightened. According to Boston Consulting Group, younger workers expect to be recognized for their contributions. They want respect and to know they make a difference. While those desires seem obvious for anyone, few startups have the capacity to concentrate intentionally on the human aspect of their business until issues around culture become painful.
John Baldino, founder of Humareso, a Philadelphia-based human resources consulting firm, knows this inflection point well. One of his startup clients, a six-person tech startup, will have nights they all end up sleeping together at the “office”–in the plutonic sense. They work until exhaustion, nap and get back into it.
Baldino and I are sitting on the ground in the lack of shade provided by palm tree provides and snacking between sessions outside the second annual WorkHuman Conference, a gathering of some of the brightest human resources and organizational culture thought leaders.
Last week, the three-day conference, sponsored by Globoforce, featured some popular personalities such as Michael J. Fox, TED Talk darlings Shawn Achor and Amy Cuddy as well as business contrarian Gary Hamel. A good portion of the wisdom of the conference, however, came from people like Baldino – one of the influencers in the collective discussion on future of human resources. He reflects on the organic ways that culture is shaped regardless of intention within a startup.
“When you are a six-person company, you do not have a culture plan, but as you live, you realize what works and what does not, and you make adjustments. That is the start of a culture plan,” says Baldino. “But you do realize quickly what works and what doesn’t and you make course corrections. Those early decisions are the beginning of your company culture.”
According to Baldino and thought-leaders at the WorkHuman Conference, the pursuit of creating a more human workplace are not just the function of companies once they have reached a large scale. Startups and entrepreneurial firms are fertile ground for leading the movement toward increasing the humanity of work.
A human workplace begins with cultural vision
Another experienced human resources influencer at the conference, Tim Sackett, president at HRU Technical Resources, a Michigan-based IT and engineering staffing firm, and a prolific writer at The Tim Sackett Project, implores startups to begin to think of culture immediately. Namely this is due to what he has seen as the mantle of leadership necessary to produce the desired culture as the company scales.
“A lot of people like to talk about creating a grassroots culture, and that’s bullshit,” says Sackett. “If the leaders want a better culture, they will find a way to make it happen. It is up to leadership get together, come to an agreement and hold others accountable to the belief. That is the only way you can make culture scalable.”
According to Sackett, placing questions of culture in the early stages of startup also relieves the pressures of shoehorning human resources functions later in the organization. That leads to increased agility and scalability. Laurie Ruettimann, author of “I Am HR” and prolific human resources blogger, believes that the questions around how work gets done should be settled when articles of incorporation are created.
“So many startups have an attorney to help them structure their business, but few have an HR consultant that can bake in behavior questions into the founding of the company,” says Ruettimann who will soon be announcing her own tech startup. “At that moment, you could settle what it takes to get things done, if its okay to take vacation, how people should fight, how they can disagree. An HR consultant would be a powerful addition to a founding team.”
“When you are a startup, you are in a honeymoon period with culture and shaping it will only get harder,” says Faulkner. “The founding team needs to set the vision, and it is everyone’s responsibility, so make it all right for everyone to have ideas about the best way it is shaped.”
The danger of not at all including the questions around culture within the foundation of a startup have to do with the pain of sprinkling human resources on top of an already established company. According to Joanne Mallia, when an HR hire is made with the absence of cultural foundations, they often only are seen as enforcers of policy.
“Human resources is much more than a compliance-driven function of a small business,” says Mallia. “For a startup, you want to find an HR person who is a dreamer – a person who can see five years down the road what the culture needs to look like.”
6 Bits of Wisdom for Startups from the Workhuman Conference
While the stakes are high and many experts implore entrepreneurs to bake good cultural and human resources vision into the foundation of a business, the challenge of actually implementing that advice remains. To help mitigate some of that challenge, here are a few kernels of wisdom from both the presenters and expert attendees of the conference.
1/ Customize work relationships and shape values.
As a startup makes its first few hires, there exists a common misconception that those people will be as invested as the founding team. This false belief is ubiquitous according to Baldino and Sackett. Instead of assuming everyone has the same expectations from a workplace, use the first onboarding processes as a chance for setting in place appreciative inquiry.
“With a startup, you have a unique opportunity to have a different kind of relationship with employees – one that is very customized for each individual,” says Charlie Judy, founder of WorkXO, a cultural transformation consultancy. “Ask them how they like to work. Find out the behaviors, actions, beliefs that they value.”
According to Judy, this kind of approach begins the process of being intentional about discovering culture. He claims that being serious about shaping culture is more than just thinking about your people. It is having a methodology for exposing what the cultural values are and looking for cultural prowess in new hires.
2/ Don’t hire friends and family just because you like them.
Many startups rely on friends and family for their first rounds of funding. And often that extends beyond cash. One of the founder’s uncles has done taxes for his friend’s auto repair business, so he is suddenly named the CFO. This can be a fatal error, according to Baldino, and have a malignant effect on culture.
“Often best friends and family are the most difficult to manage as a company grows,” says Baldino. “Just because you get along with a person or you like them, if they do not have a defined role that is growth oriented, they will stay in the business for too long and you end up hiring people like me to fire them.”
3/ Don’t get caught up in workplace happiness hype.
As mentioned, Shawn Achor, author of “The Happiness Advantage,” was the kickoff speaker for the event. And throughout the conference there was much ado about making a workplace happier – rewards, gratitude boards, adult coloring books and team outings. While fun and camaraderie is important, foundational cultural understanding and basic HR needs lead to long-term fulfillment.
“Unless the activity or program connects to something bigger, then the results of effort will be weak, and you will look like an idiot,” says Faulkner. “You have to figure out what works for recognizing people within your organization.”
Ruettimann echoes this concern. “You cannot have a happy culture if the basic needs of people are not met,” she says. “You can’t expect good results from adult coloring books if there is not first pay equity, health care plans and paid leave. Rewards will not cover up those issues.”
4/ Make authentic appreciation part of the culture.
While it may look different within every organization, a genuine expression of gratitude or appreciation for a job well done is a simple practice. But, according to experts, a culture that does this does require some practice. Pam Ross is an HR consultant and knows well the benefits of authentic appreciation. But, even she, after 15 years in the trenches of HR, has made errors in this simple appreciation that led to one of her employees leaving. When she found it was a lack of appreciation, she was crushed.
“I think what felt the worst about that situation is that it was out of alignment with my values,” says Ross who has since hired a new employee and makes certain to appreciate efforts. “It has made me pay attention to when I have that icky feeling and make a correction immediately.”
Ross points out that something as simple as beginning emails with a “Hi,” instead of jumping into issues or asking questions makes the conversations human instead of task-oriented. The forms of appreciation, according to Sackett, can be as simple as a two-minute moment for gratitude every morning. Something as simple as a quick email or note to a friend, employee or colleague. This helps to keep that practice top of mind.
5/ Create the least amount of policy as possible.
Some apprehension around addressing issues with people do not have to do with humans, but they are motivated by formalized ideas of what HR looks like. There exists an association with only compliance issues or bureaucracy. Baldino, however, says that concern over compliance is often premature for startups.
“Compliance will come,” says Baldino. “You do not have to build a corporate monster. Don’t rush into making sure you have everything buttoned up. Instead, find those people-centered frustrations, pay attention to how they show up and create a plan around them.”
Regarding bureaucracy or layers of management, Gary Hamel, author of “What Matters Now” and “The Future of Management” presented ideas that challenge traditional forms of workplace structure. Often those systems lead to increased fragility and decreased innovation – a recipe for disaster for startups.
“Humans, by nature, are adaptable, creative and passionate. And most organizations are not,” says Hamel who encourages leaders to investigate nontraditional forms of management structures. “Changing the exoskeleton of bureaucracy is not an initiative. It is a platform issue. You can instead create a new set of principles for how to manage people and reinvent the how at work.”
6/ Employ some strategic foresight in the construction of your workplace.
Another way to ensure increased fragility is to build a company of today based on yesterday. According to Yvette Salvatico, a futurist with Kedge, a strategic foresight company, you can instead build a team of humans today that can meet the challenges of tomorrow. Future studies have been used for years by those in the defense and architecture world, and Salvatico illustrated how those disciplines can be applied to creating a culture.
“Strategic foresight, creating multiple five and ten year visions, is not an app or something to add, it should run in the background like an operating system of an organization – it is thinking like a futurist,” says Salvatico who encouraged conference attendees to lean into their uncertainty and discomfort. “The future is not technology. It is not flying cars. The future is human, and it is about people.”
Creating a culture that strives for excellence while also embracing humanity will help a startup create a more agile team that can meet the demands of an uncertain future.