Startup founders who align culture and strategy are more likely to succeed in the long run.

So you’re a founder with a great idea. You’ve researched the market, studied your competition, assessed the risks, developed your strategy, wrote a business plan, and you are ready to pitch, get funded, and execute. You and your co-founders want to turn this great idea into the next great Latin American unicorn

And yet, as you begin to build your company, you will probably make a big mistake most founders make: you will overlook the importance of company culture and its alignment with business strategy. This oversight is unfortunate because it is often the difference between success and failure. 

When one considers that the “team” is one of the most important factors that VCs in Palo Alto, Miami, and Sao Paulo look at when evaluating a startup, it really should come as no surprise that culture is a key component of the success of any startup. Lack of cohesion or shared vision, conflict, and lack of passion within a team are some of the most common reasons that startups fail. These happen most often when founders do not establish early on the core values of the organization and use those values to build a company culture that is intentionally aligned with the startup’s products, services, and business strategy.

“Culture” is a company’s people, their psychology, and the way they do work. It can be broken down into behaviors, motivators, and work environments:

  1. Behaviors are the HOW you tend to behave in a given situation, the typical ways that you go about your work. A functional team, over time, will have behaviors that are supported by shared experiences.
  1. Motivators are the values and beliefs of each individual and the organization. Hidden motivators that drive your behaviors and help to explain WHY you do what you do. 
  1. Work environments are the way work happens, the characteristics of the work itself that give you the most energy, fulfillment, and success. 

Founders should evaluate these factors to determine if the company culture is actually aligned with the company’s long-term goals. This process can be used to identify important strengths and weaknesses: 

  • What behaviors are working and should be reinforced? 
  • Is the team motivated by the company’s strategy and vision? 
  • What are the individual motivations of team members? 
  • Can team members thrive within the company’s existing work environment? 
  • What needs to be changed? 
  • And of course, the very important question founders often neglect: Do you know and recognize the difference between your startup’s aspirational culture and its actual culture?   

An important part of aligning culture and strategy is to hire for fit to reach business goals. Many founders spend months or even years looking for the right people to join the team. And then, after resumes, interviews, and Zoom calls, founders often hire people they like or people that are just like them, not people that will fit within the culture, or help change and drive the culture to where it needs to be. 

In many ways, hiring for culture fit is just as important, if not more, than hiring for skill. Founders should make hiring the right people a key priority as the company grows. This leads not just to a diverse team, but also to “diversity of thought” within the team. This is so much more important than hiring your friends. Founders often miss this because it is human nature to want to hire people like ourselves. We have all done it. Avoid this by evaluating what the culture needs in order to effectively execute business strategy and deliver results. 

Here are some important things that founders should consider as they develop their startup’s culture:

  • Make culture a strategic priority by establishing core values right from the start. This will make it easier to align culture with business strategy.
  • Measure and assess culture often. Very often, companies say they have one culture when in reality, it is just an aspiration. Be aware of where you’re headed both in terms of strategy and culture.
  • Understand the behaviors, motivators, and ideal work environments of the company and its employees. This helps founders cultivate a cohesive culture, identify problems, and leverage opportunities. 
  • Encourage “diversity of thought.” Improve collaboration within the company by acknowledging other team members’ strengths, even when they are different than the rest of the team. Diversity of thought and perspective drives innovation, effective problem solving, and collaboration.
  • Encourage individual self-awareness and understanding. Understanding company culture begins with each team member’s awareness of his/her own individual behaviors, motivators, and ideal work environments.  

Founders can build strong and successful company culture by defining it, describing it, and communicating it right from the start. When people understand each other better, they work better, collaborate better, and perform better. For this reason, startups whose founders make culture a key part of the company building process are more likely to succeed in the long run. 

For a best practice guide for intentionally building culture for your startup, download the Humantelligence eBook here.

This post is also available in: Español (Spanish)

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