Why Culture Beats Strategy [How To Build A Great Startup Culture]

Culture eats strategy for breakfast. Every time. This is especially true in the world of startups. I liken a startup to flying a plane, and then attempting to build the engine in mid-air. The engine in this case is the team and culture that powers the plane, but without the right culture — startup founders can quickly see their perceived Concorde quickly unravel and turn into the business equivalent of the Hindenburg disaster.

Culture vs Strategy

The reality today is that a startups strategy is often forced to adapt to shifting market conditions, changing customer needs and to an increasing extent, disruptive competition. But regardless of the strategy, it still requires a team and ultimately culture to drive its agenda internally and its execution in the market place.

In my interviews with some of the worlds leading CEO’s and entrepreneurs, the influence of culture is often credited with playing a key role in business success. It’s ironic however, that even though a high-performance culture is a critical aspect of succeeding in business, startup founders commonly overlook and often under appreciate it’s role in building and running a successful business. In my experience — both in the startup and corporate space — the influence of culture is directly proportionate to the degree of competition in the market. It should not be ignored.

The Seven Pillars

A business culture can also be described as an expression of the dysfunction of management. The strategic management function is critical in creating and developing a winning culture. Here is my view on how to do just that.

  1. A Landmark Methodology

The lean startup methodology by Eric Ries is designed to eliminate the uncertainty in the product development process by validating iterations of product developments with customers. It has become the status-quo in terms of building a new startup. While it is an excellent methodology in the product development context, the value and impact of culture dwarfs the value that is created by the lean startup methodology.

Let’s take Steve Jobs for example — imagine if he attempted to validate the iPhone using the lean startup methodology. My guess is that it simply wouldn’t work. What differentiates Apple, is their innovations lead culture and their unique approach (“Think Different”) to product innovation and its underlying business model. It is what fundamentally makes them the company that they are today.

I recently interviewed the serial entrepreneur Vinny Lingham and he said: “If Henry Ford asked his customers what they wanted, they probably would have said faster horses!”

When startups are establishing a play on the edges of what’s known to be possible it becomes increasingly harder to validate ideas. This puts a greater emphasis on the engine — the culture of the business — to redefine what innovation means and the categories within which they operate.

2. A Compelling Narrative

The human brain is hardwired for stories. We find messages that are framed as stories more memorable, easy to understand, and convincing. Because of this, a brands story is equally important to its customers as well as to the staff that serve them. Seeing things through the lens of narrative can lend a startups culture meaning and texture, and they can galvanise a team around a single purpose and goal.

To quote Elon Musk: “A company is just a team of people working towards the same goal”. His space exploration company Space X has one ridiculously compelling narrative — to enable humans to become a multi-planetary species. Besides showing that innovation is truly iterative, their attempts at creating reusable rockets is a classic narrative which they uniquely own (shown below) and its a narrative that speaks volumes to their business culture and ambition.

3. A Forward Looking Business Model

In today’s digitally enabled economy, if the rate of innovation inside your company is slower than the rate of innovation outside it, then you’re likely to run into trouble. Disruptive competition is on the rise, and legacy traditional business models are paying a heavy price because of it.

The same can be said for startups. Even if you have first mover advantage, it’s likely that before long you’ll be joined on the ‘beachhead’ by a competitor whose learnt from your initial mistakes, and has since come up with a shiny, new and improved product and business model designed with the sole purpose of eating into your existing and hard won marketshare.

Future proofing a business relies heavily on business model innovation i.e. the process of defining new ways to deliver existing products to existing customers using existing technology. A tool I’ve found helpful is the Business Model Canvas — it’s an attempt at providing a common framework that all businesses can use to create new or improved business models.

4. A Powerful Belief

One of the more striking commonalities between successful CEO’s and entrepreneurs that I’ve interviewed, is their unwavering belief in what they are doing in business. Successful founders and executives use belief to inspire mass corporate action, and to align organisation behaviour towards a common goal. To quote Steve Jobs: “A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.”

5. A Striking Motto

Motto’s have been used to express cultural beliefs for centuries. From America’s “In God We trust” to AirBNB’s “A World With No Strangers”, Apples “Think Different” and Nike’s “Just Do it” — they are simple but essential forms of communicating cultural beliefs. Motto’s (or slogans) impart a key message into the minds of consumers and most importantly, the staff that serve them.

6. A Strategic Vocabulary

The enablement of a strategic vocabulary in a businesses culture goes along way to driving the organisations collective understanding of a top-down business strategy. One could even argue that it is a pre-cursor to the strategic alignment of disparate business functions and ultimately the enablement of business performance through collaboration.

Creating and implementing strategies, that ultimately create value for customers, stakeholders and shareholders all need to be aligned with a broader business vision and communicated in a similar fashion and at all customer touch points (both offline and online).

It is also vital that executives give their staff the tools and training they need to acquire their own rich strategic vocabulary as it relates to specialised departmental functions and disciplines.

7. An Open Talent Policy

Businesses with the best people win. Period. An open talent policy should creatively address the way startups acquire, develop, reward and retain their staff in order to address “the future of work” — this means that employers and employees must come to terms with a new working environment in which flexibility and adaptability take priority over job security and long-term employment, structured environments, and standardised roles. A fresh approach should be adopted by startup founders so that their staff can enjoy better work/life balance, autonomy and career control.

Conclusion

Early to bed, early to rise, work like hell and merchandise. But take heed of your culture — it’s important to get it right in order to truly enable disruption and challenge the status quo. Happy flying.

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