Michelle HammondFollow on twitter www.startupsmart.com.au
Stopping corporate culture from strangling your start-up
A lot of entrepreneurs come from a corporate background, which often stands them in good stead when they launch their start-up.
But if all you know are big business practices, how do you stop them from slipping into your new venture? And why is this so important?
According to Google, maintaining a “start-up philosophy” is at the forefront of the company’s vision, even though it employs more than 28,000 people throughout the world.
One way Google has sought to achieve this is via its Google Labs initiative. The company also has a policy whereby employees are encouraged to devote 20% of their work time to “projections of their own invention”.
Unfortunately, the average start-up doesn’t have the scope to introduce these sorts of initiatives. However, there are other ways you can avoid corporate culture, experts say.
But first, it’s necessary to understand why it should be avoided in the first place.
How corporate culture can hurt your start-up
“Examples of corporate culture that I think could hurt a start-up are creating a work culture that is hierarchical in nature,” says Cas McCullough, founder of Mumatopia.
“If there’s no glass ceiling to be broken through, there cannot be a boys’ club mentality.”
Another potential problem that arises in corporate culture is the micromanagement of employees, McCullough says, as this can stop people from learning how to think for themselves.
“I lose patience when I come across people who are just ‘doing what they’re told’ and not using any initiative to solve customer problems,” she says.
“I think this kind of thinking is bred in schools. I call it ‘yellow pencil’ disease. School is great at preparing people for the corporate workplace because school teaches kids to comply.
“Entrepreneurs need to move away from that kind of thinking or they’ll sink.”
Escaping corporate culture
“In my experience, it was the desire to experience something different from the corporate culture that drove my decision to leave it,” says Martin Nally, founder of hranywhere.
“Starting my own business was a way of achieving that aim.”
Right from the start, Nally says he built his business based on its ethics, ethos and positive approach, and promptly communicated those values to his staff.
“I repeated and educated each and every new team member to understand what they meant,” he says.
“We adopted our own terms and a common language that become our currency, and a way of refreshing and reinforcing our non-corporate culture.
“We then sought and attracted people who were themselves seeking this culture. Trust is a big part of it as well.”
Maintaining a start-up mindset
“We keep honest by regularly communicating the importance of not being seen to be a corporate-based culture,” Nally says.
“We also ban certain phrases such as the word ‘consultant’. We replace it with practitioners as we actually do the work, not advise what to do.”
According to McCullough, the key is to communicate well.
“I make a point of keeping clients well informed, particularly if a project is stalled for a reason outside of my immediate control,” she says.
“As I work with businesses all over the world, it can be difficult to get things done within a short time frame (because support services may be asleep in New York or the UK while I’m working).
“The other key thing is to network… Relationship-building is fast becoming the way to reach potential clients.
“In order to develop relationships, you have to be real, innovative and willing to go the extra mile.”
Brad Krauskopf, co-founder and chief executive of start-up co-working space Hub Melbourne, says start-ups work to different deadlines, so this also needs to be taken into account.
“We’ve got into a great rhythm here. Every 100 days, we set up a new theme. We see in the start-up land it’s impossible to plan for anything longer,” he says.
“I see many of our members employ those kinds of techniques. The compression of the planning [cycles] is a tactic that is seen quite a lot.”
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Keeping the corporates at bay
When APN News & Media took an 82% equity stake in brandsExclusive last year, it promised not to “smother” the three-year-old company.
Going into the deal, this was the number one priority for brandsExclusive, says co-founder Daniel Jarosch.
“APN wasn’t the only company talking to us. A lot of very large companies were talking to us. In this process, you pick up a lot of signals,” he says.
“Did you get to speed directly to the CEO or does it take four weeks until you sort out an NDA with the legal department?
“If the CEO says ‘Let’s have a beer and talk about what we do’, you say ‘Wow’… What is unique for APN is they all get eCommerce and they know the importance of culture.
“[They understand why] we don’t have a three-year planned budget.”
Giving away large chunks of equity is a big risk, Jarosch admits, which is why it’s so important to get it right, particularly if you’re determined to preserve the culture of your start-up.
“Companies say, ‘Let’s all move into the same office’ and suddenly start-up people are mingling with people in suits, and it doesn’t work,” he says.
“[APN] bought us because of our culture. They’re actually pretty good because they’ve invested in a number of different companies.
“They are all very different in culture, and APN never tries to interfere in them… We’re here to build an eCommerce business, not negotiate with lawyers.”
Accepting the inevitable
Jarosch says while it’s possible to resist corporate culture in the event of an acquisition or investment, size is a different matter.
“When you have 10 people in one room, it’s very easy to have that… Then you grow and suddenly you’re 200 people,” he says.
“When you have 10 people, everyone’s on Spotify and looking at YouTube videos. When you have 200 people, you need to have guidelines.”
So as you grow, how do you maintain professionalism without compromising your culture?
Nally has outlined some dos and don’ts.
- Use the terminology of big business
- Be inflexible with work times
- Adopt policies without collaboration
- Trust those who are part of your business
- Allow flexibility
- Surprise and delight your staff
- Be seen to be prepared to have a go at any task
- Treat people with respect