How to Make Sure Your Startup is Built on Values

How to Make Sure Your Startup is Built on Values



I’m seeing a renewed appreciation of culture and values in business these days. Maybe it’s just another example of nature abhorring a vacuum, but I prefer to think it’s a natural evolution of the pervasive social networking communities, where people relate to and expect to interact with businesses and products that they like. They drive the market, rather than the other way around.

As you create a startup, your values are the key to creating an enviable culture that attracts more customers, according to Ann Rhoades, in her book Built on Values. She would assert—and I agree—that you need to get it right the first time, because first impressions are critical and because changing your values and culture in the eyes of customers and employees is extremely difficult.

I believe in a startup culture that strongly transmits the values of integrity, customer focus and results. Ann outlines six fundamental principles that are key to building this culture or changing an existing culture to improve financial return, customer satisfaction and employee performance:

  1. You can’t force culture. You can only create environment. Every culture is the culmination of the leadership, values, language, people processes, rules and other conditions, good or bad, present within the organization. No leader can “create culture,” just the environment where the desired culture can emerge and flourish.
  2. You are on the outside what you are on the inside. The service you provide for your customers will never be greater than the service you provide to your employees. You can’t force people to treat customers well if they feel ill-used themselves. Hire people who fit your desired culture and treat them the same way.
  3. Success is doing the right things the right way. By defining your values and behavior by the right actions, you enable everyone to make the right decisions on the frontline. Empowering and educating everyone to make the right decisions at every opportunity leads to happy customers and business success.
  4. People do exactly what they are incented to do. Your expressed values will be perceived as hollow and meaningless unless you base compensation and rewards on the behaviors that go along with the values. It takes diligence and courage to hire only people with these values and to fire ones who have lost them.
  5. Input equals output. Your organization will get out of values only what they are willing to put into them. Communicate your values often, and use values-based performance metrics to gauge your results. Measure the level of implementation, leadership development and succession planning.
  6. The environment you want can be built on shared, strategic values and financial responsibility. Conscious action, beginning with determining a set of shared values, can set up the necessary condition for encouraging a culture that will make a startup into a leading company. Values are most critical when making tough decisions, but that is also when they become most useful in illuminating the way forward.

Startups are the only businesses able to set their culture and values from a clean slate. Values start and emanate from you, the founding entrepreneur. Your values are not what you proclaim on your mission statement (if you have one); they are made real and set the culture by what you live by and project on the frontline in day-to-day actions.

Strategy matters, but without a winning culture and the right values to drive it forward, your strategy will take you nowhere. Good leaders matter, but you need a positive-values culture in order to attract the best leaders to compete effectively.

Leaders drive values, values drive behavior, behavior drives culture, and culture drives performance. High performance makes new leaders. This is the self-reinforcing circle of excellence every startup needs to succeed. You can’t afford to wait on any of these, so get your culture right sooner rather than later.
Reprinted by permission.

Image credit: CC by chu ko

About the author: Martin Zwilling

Martin is the CEO & Founder of Startup Professionals, Inc., a consultancy focused on assisting entrepreneurs with mentoring, business strategy and planning, and networking.

Martin for years has provided entrepreneurs with first-hand advice, mentoring and business plan assistance as a startup consultant. He has a unique combination of business and high-tech experience, and executive mentoring and connecting startups with potential investors, board members, and service providers.

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