The importance of company culture


How employee happiness starts with culture

Posted on July 11, 2017

In light of all the talk about Uber's sexual harrassment problems and Travis Kalanick's departure, I thought it would be a good time to state the obvious: a company's culture starts from the top, and it's important to define it in writing for every employee to see.

The CEO defines the culture

A CEO wears many important hats, but the most powerful and least recognized one is cultural leader. There may be other influential employees: a second or third co-founder, a star engineering or sales leader, or senior hire brought on after a financing round, but none hold the same weight as the CEO. Whether she likes it or not, she sets the tone for everything.

Her actions define things like:

  • If it's acceptable to be late for meetings
  • What time to arrive at and leave the office
  • How much vacation to take and when to take it
  • Work/life balance, especially after-hours work and communication
  • If it's okay to run meetings long
  • How prepared you should be for meetings and presentations
  • How formal to be in office communication
  • What type of behavior is allowed outside of the office setting
  • How much respect to give customers, investors, and other stakeholders
  • Amount of respect for company resources like computers and even just snacks

The list goes on and on, from the major to the mundane. The CEO is responsible for all of it, and she does it not by stating a policy, but by embodying it every day. It's a lot of pressure, especially if the CEO's habits are not actually scalable for the entire company. When that's the case, what should the CEO and her team do?

Transparency maintains the culture

If a CEO cannot live up to his own company's cultural expectations, then a company will eventually find itself with a serious internal conflict. I believe this is what happened at Uber. Uber, obviously, would not have a policy allowing sexual harassment. But if the CEO tacitly allows it by joking about it, or not speaking up when he sees it, or acting chauvinistically around women outside of Uber, then it will infect his company. And that's what happened.

The best way to help a CEO in this position is to be open with employees about it. Acknowledge that leadership has not always upheld the cultural values of the company, and to fix it there will be trainings and feedback requests and transparency around the process. As the saying goes, sunlight is the best disinfectant.

The next course of action is to define your company values. This post by Scripted does a nice of job of describing why companies need to go through the process of defining them, presenting them to staff, and keeping them updated as the company grows and evolves.

You might refer back to your company values around questions like:

  • How to treat unreasonable customers
  • How generous to be with company perks
  • Whether to hire an employee with a different political or social disposition
  • How much funding to raise
  • When to give raises and how much
  • Whether departments should have different bonus structures
  • How aggressive to be with sales and marketing
  • Whether it's okay to insult competitors
  • Whether to expand into a new market or launch a new product

Your cultural values, if they're both honest and aspirational (those are not necessarily contradictory goals) will help you make these decisions and more. More importantly, if you go against your culture, you're at greater risk of failing. You won't reach the objective you sought because your employees' hearts won't be in it.