Talent & Leadership
How to Scale Your Culture & Values
In a world where technology is increasingly commoditized—and multiple teams and companies have similar products—what sets great companies apart? Based on our experience at M13 and LifeLabs Learning helping over 1,000 innovative companies scale, we’ve seen that it’s the speed and quality of execution that counts.
What makes great execution possible? A healthy culture of learning, belonging, and high performance. The right culture will help attract, retain, engage, and empower talented employees, and give them a clear framework to do their best work.
In this tutorial, we’ll discuss what makes the best cultures (hint: it’s not the same thing for everyone) and how founders and leaders should build and scale their cultures from the start.
What is a “good” culture?
Let’s begin with a tale of two cultures. Imagine you take a look at the offices of two different companies, side by side (in a pre- or post-COVID world). In one, employees sit in solitary cubicles, wearing suits and ties, and never taking a lunch break. In the other, hoodie-clad employees huddle in clusters across an open-floor plan, some brainstorming together in beanbags, some pair-programming, and some playing a passionate round of Ping-Pong. Which is the “better” culture?
Of course, it’s a trick question. Despite what many of us in the high-growth tech ecosystem have come to believe, there is no such thing as an objectively “good” or “bad” culture. There is only a culture that is a good (or bad) fit for your goals, the type of company you want to build, and the people you want to be a part of it. Your culture needs to support the business and personal objectives you want to achieve.
For example, a culture of slow, methodical perfectionism might crush a tech startup but be essential in a children’s hospital. A culture of playfulness might be the secret to innovation at an advertising agency but threaten the safety of a nuclear power plant. A spirit of competition may drive success at a hedge fund but destroy a nonprofit.
In this first tutorial of Human Capital: The Essential Guide to Scaling People Systems, we’ll give you a step-by-step overview of how to decide what the right culture is for your organization, how to turn it into a reality—and keep it that way.
When is it time to design your culture?
Setting the culture for your company starts on Day One—and for good reason. Whether you realize it or not, you’ve made a decision about the culture you’re creating as soon as you’ve made your first hire. Each time you hire someone who isn’t you, you’re building and changing the culture of your organization.
By investing the time to design your culture at the onset, you improve productivity, employee engagement, and create a framework to scale your business. You help set clear guidelines for how decisions should be made and why, and enable your team to work more quickly, seamlessly, and harmoniously together.
Don’t wait until a future point in time to work on culture (like your Series A or hiring your first Head of HR). You want to do this intentionally rather than accidentally. Deciding on your culture strategy is as important as developing your go-to-market strategy, perhaps even more so.
What is culture anyway?
We all kind of know what culture is. But let’s define it so we are on the same page. Culture consists of the behaviors that are rewarded and the underlying principles for how and why decisions are made. Simply put, it’s a framework for “how we do things here.” Absent a guiding framework, people go in multiple (incompatible) directions.
The stronger a culture, the more it shapes people’s actions. Go too strong, and you create a cult-like vibe where individual thought is suppressed and there’s no space for diversity, creativity, or innovation. Go too loose, and you have a random collection of individuals, each with their own ideas of how to define success. In this tutorial, we’ll share tools that will help you find the right balance.
Why does culture matter?
As you hire more and more people at your company, your role as a founder changes. Instead of doing everything yourself, you’re now delegating, focusing on external relationships, raising money and working with your board, etc. This is a good thing! And because you’re doing that, you need to trust your team to make decisions you approve of even if you don’t always get to weigh in. So, how does your culture make that possible?
Culture scales aligned behavior. As your company grows, dozens, then hundreds, then thousands of people have to take action swiftly and independently without you telling them what to do. Culture becomes like a compass each person can use to point them north without having to “go ask HR.”
In any rapidly growing startup, you can’t have a playbook for how to handle every single unique situation. You want people to adapt and stay agile. Culture guides them to do just that.
Culture impacts performance. One of the best predictors of high performance is employee engagement—an eager willingness to contribute to shared success. And one of the best predictors of employee engagement is a concept called “organizational fit.” As it’s often said (though we’re not sure who said it first), company culture should be like hot sauce: some people love it, and some want no part in it. Having a distinct culture lets you recruit, engage, and retain the types of people who see your company as an extension of their personal goals and values. It makes it possible for the high achievers who will help your company succeed say: “This is the place for me.”
Having a clear culture also allows you to reduce tight management and oversight. Not only does this save you time, it also results in greater engagement and productivity. People do best when they feel trusted and empowered to make decisions. Instead of having a person tell others what to do, you can rely on your culture to guide everyone in the same direction.
How to design your company culture
So, how do you go about establishing something as seemingly vast and amorphous as culture? The three most concrete and actionable pillars of culture are:
It’s hard to make any organizational decision or keep your team motivated without a “why” at the center. Your company mission will help you recruit the right employees, customers, partners, and even investors. It will spill out into your brand, and it will inform your vision, values, and strategy.
Get inspired by these examples of compelling mission statements:
- Sweetgreen: To inspire healthier communities by connecting people to real food
- Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis
- JetBlue: To inspire humanity—both in the air and on the ground
- Prezi: To reinvent how people share knowledge, tell stories, and inspire their audiences to act
- Tesla: To accelerate the world's transition to sustainable energy
- TED: Spread ideas
- Shopify: Make commerce better for everyone, so businesses can focus on what they do best: building and selling their products
What makes a compelling mission statement?
It should be short enough to remember and concrete enough to inspire. It helps to state your audience (e.g., communities, people, students, children, athletes), the action you’ll take, and the transformation you’ll create.
Here are some mission-refining questions for you and your founding team to answer:
- Why did we start this company?
- What inspires us most about it (especially during the tough days)?
- Who is our core user?
- What is the big problem we’re solving for them or the goal we’re helping them achieve?
- Who or what is impacted if our business shuts down or fails?
- What mission will keep me motivated for years to come?
Once you’re clear on your mission, identify where that mission will lead you and (ideally, though not necessarily) when you aim to get there. Your vision can change with time. That’s okay and better than having a lot of people wandering around in the dark wondering if they’re on the right path. It’s normal for businesses to change focus as the world changes. As far as the “when” goes, this depends on your company, of course, but a distance of five years tends to be a good starting point in terms of planning.
For inspiration, check out these examples of compelling vision statements:
- Alzheimer's Association: A world without Alzheimer's disease
- Microsoft (original): A computer on every desk and in every home
- Nike (older version): Crush Adidas
- Impossible Foods: Completely replace the use of animals as a food technology by 2035
- McDonald’s: To be the best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.”
- ASPCA: That the United States is a humane community in which all animals are treated with respect and kindness
- Southwest Airlines: To become the world’s most loved, most flown, and most profitable airline
What makes a compelling vision statement?
Your vision should be specific enough to help you focus your resources, develop a strategy, and measure success. At any given point, it should be clear whether or not you’ve achieved your vision. And it should be broad enough to give you space to experiment along the way.
Here are some vision-setting questions for you and your founding team to answer:
- Five years from now, what’s something you’d be deeply proud to achieve?
- How about 20 years from now?
- Imagine someone giving your personal eulogy. They talk about the amazing impact our company has had on the world. What do they say?
- What results will we have to achieve in order to feel like we’ve made a meaningful difference?
- Let’s say we are fully pursuing our mission every day for five years. What will we have to show for it?
Now that you know where you’re going and why, it’s time to decide on your organizational values—the how. When used well, values become the foundation of every important decision your company makes, from how you pay to who you hire, how you fire, and everything in between. When two totally different employees who have never met face a similar ambiguous challenge, your values should lead them to come to a similar solution.
We’ve rounded up some examples of inspiring values:
- Squarespace: Design is not a luxury
- Twitter: Seek diverse perspectives
- Zappos: Create fun and a little weirdness
- American Express: Customer Commitment—We develop relationships that make a positive difference in our customers' lives.
- Google: It’s best to do one thing really, really well
- Coca Cola: Accountability: If it is to be, it's up to me
- Genentech: Courage means we are entrepreneurial and thus take risks, reach beyond boundaries and experiment
- IKEA: Daring to be different
Are some values better than others?
The right values for your organization are going to be the ones that guide your employees toward your vision and mission and attract the people who will help you reach your goals. Will achieving your vision take patience or require a need for speed? Will you do best with caution or a passion for risk-taking? Will it require focus or experimentation? Your values are the essential strategy to help you get to where you want to be.
That said, the one value type we recommend all organizations adopt if they want to stay nimble is a value that rewards learning. As we noted in the introduction to this series, the world is moving too fast for any company that doesn’t learn quickly and operate with agility to be successful. By baking the pursuit of learning into your company DNA, you make it possible for your team to adapt and evolve regardless of what the future holds.
Bring your culture to life
Now that you have your culture framework in place, it’s time to go beyond the theoretical and into the practical. It’s a great start to showcase your startup’s values on a wall, website, or brand book. But values only have actual power in the way they’re lived, not in where they’re written.
To bring your values to life, take a critical look at each of your People Systems, and deliberately embed your values into each one so the right behaviors are consistently reinforced. While values should be visible in all your People Systems, the systems we outline below are the most essential touchpoints.
For each touchpoint, we share sample questions that will help you decide how to embed your values into your People Systems:
1. Hiring & onboarding
How do we assess whether candidates share our values?
- Most companies know how to “test” for technical skills, but “values fit” is a little more nebulous. Figure out what each value looks like in action. Use behavioral- and situation-based questions (we’ll talk more about how in an upcoming tutorial).
Do we value speed—or inclusion?
- Make interview process decisions at the outset guided by your values. For example: some companies give strong leeway to managers to make rapid hiring decisions with little or no input from others. This is a “hire fast/fire fast” mentality. In other companies (Google and Whole Foods are two examples), hiring decisions are made by committee to increase alignment and reduce bias.
2. Compensation & benefits
Do we value competition—or collaboration?
Think about the way this manifests itself is by analyzing your payment structures. For example:
- Do you have a fixed bonus pool where managers have to allocate to each individual on the team based on their assessed “performance”? While this might drive individual productivity, it’ll be difficult to encourage everyone to support their colleagues’ best performance. Companies that value collaboration should create team-based bonuses. (We’ll discuss this in more depth in a future tutorial as well!)
Do we value transparency—or privacy?
- Do you believe a commitment to transparency will best service your organization? If so, you should be prepared to have conversations around salary, equity, and compensation bands out in the open.
3. Performance management & feedback
Do we value top-down or company-wide learning?
- When it comes to developing skills and improving performance (again, we’ll be covering this topic in way more depth in a future tutorial), consider how you want your values to guide people’s actions. For example, if you value rapid, company-wide learning, there should be training and processes in place to enable people to give one another feedback, regardless of their role or hierarchy.
How do we create value feedback loops?
- Remember: What gets rewarded gets repeated. What results in negative consequences gets avoided. Make it easier for people to work in line with your values by creating feedback loops that celebrate values in action (e.g., a kudos Slack channel) and correct behaviors that are not aligned with your values (e.g., by embedding a values assessment into your performance reviews template).
Keep your culture alive
When you do the work of identifying, articulating, and designing your culture from the start, your team becomes more focused, effient, effective, and motivated. In most cases, this groundwork will pave your way for a long time to come.
That said, it’s smart to revisit your vision, mission, and values on a regular basis to make sure they’re still serving you and feel authentic to your team. For example, consider adding the following questions to your engagement survey:
- “I believe in our company vision.”
- “I am inspired by our company mission.”
- “We stay true to our values.”
You can also meet once a year with your leadership team and employee representatives with diverse roles and backgrounds to ask: “Are our vision, mission, and values still true? Are they still serving us?” If you see alignment dropping, consider why that might be. It’s likely because your employees are not seeing the values in action in day-to-day decisions and actions, and that what served your company well at the outset is not scaling as you grow.
Keep in mind that in most cases, your values will stay the same—but how you act on them will be different as your company scales.
To continue the hiring example from above, if your company values an inclusive “hearing all voices” approach, you might begin by interviewing every single candidate all together as a company when you first start out. While this may work when you’re a small startup, it will not scale with size. So think about how you can remain true to the cultural principle in different formats. Perhaps at a larger size, “hearing all voices” might evolve into having a representative from each department or people from a broad range of backgrounds and identities.
As another example, if your company values transparency, as a small team this might mean joining every single meeting together. As you grow, it might look more like making meeting recordings or notes accessible to everyone.
Every once in a while though, you might realize that you need a change. To quote Marshall Goldsmith, “what got you here won’t get you there.” In that case, the best practices and exercises in this tutorial can help you evolve your culture framework as you grow.
Takeaways & Next Steps
- Culture is the foundation of your company. It’s the framework for how and why things get done and decisions are made.
- There’s no such thing as a good/bad culture—it’s a matter of what will help you reach your goals. You need to understand what is authentic to the type of company you want to build, and make sure the behaviors you reward are aligned with that.
- Design your culture by articulating the three cultural pillars: mission (why), vision (where), values (how).
- To bring your values to life, embed them in your People Systems.
What to do next:
It’s never too early to start the culture conversation with your team. Do the exercises in this tutorial to test and refine your cultural clarity and alignment.