How Important is Culture at a Startup

Charging for Coffee

I remember the day when a former senior executive from ATT came to talk to us at the MBA program and he had an interesting story. After a successful career at ATT he was asked to help turn around a struggling startup. They were bleeding money, had to cut their losses fast and either close shop or somehow convince the investors that there was a light at the end of the tunnel.

One of the first things he did when he arrived was to convene a town hall style meeting. All employees came to the cafeteria, and he and the senior managers stood in front of a microphone to take questions and communicate the coming changes. You could feel the stress in the air and cut the tension with a knife. The first question he was asked as about the vending machines. “What will happen to the vending machines” someone asked from the back. All eyes were on him. He knew that his answer would define him in the eyes of employees as a friend or foe. The CFO, next to him, was calm, she thought she knew the answer to the question. They talked before about the cost structure, where the money was going and what non-essential items would have to be cut. For the CFO this answer was a no-brainer.

“Right now, I don’t see a reason to remove or change anything related to the vending machines” he answered. The CFO almost choked as she looked at him with that “are you F… crazy?” look. But the employees were relieved and the rest of the meeting went well. In the eyes of the employees he was now OK.

What is Your Culture

Culture is not something you can buy, you have to build it slowly and consistently. Who you hire will help determine the type of culture of your company as will the policies, the benefits, and the perks you put in place.

Read more about startup culture and the right and wrong things to do in my recent post at Startup Grind titled Why Culture Matters, Even In Your Startup. I hope you enjoy!

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