How to build a strong company culture

Pairing the right culture with your brand identity is one of the most important decisions an entrepreneur can make. Your company culture determines how decisions are made all the way from the executive suite down to ground-level employees.

Yet entrepreneurs launching a new business have a lot on their plates, and it’s understandable to feel like they can’t get to everything. The development of a strong company culture is one element that deserves attention early on but is often neglected. Stanford University professors Huggy Rao and John Lilly explain that entrepreneurs cannot afford to neglect culture when pursuing a new venture, as it will inform their organizations’ day-to-day operations for years to come.

The pair sat down to discuss the value of organizational culture and how founders can build a strong culture from the beginning. Drawing from their extensive experience working with Silicon Valley startups and other tech companies, Professors Rao and Lilly share their insights.

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Here are a few highlights from the webinar:

Establish a clear mission

The first step to building a company culture is to identify your organization’s core mission. What are your broader goals beyond simply turning a profit? Professor Lilly uses his experience working with Mozilla to launch the Firefox web browser as an example. Mozilla’s mission was never to create the most popular or widely used browser on the market — instead, company leaders wanted to ensure everyone had access to the internet and that it wasn’t controlled by a small group of large conglomerates. That overarching mission informed other aspects of Mozilla’s culture, helping define and support its most important values.

Positivity vs. negativity: What’s better for company culture?

Once your company has developed its core values, do you champion them with positive reinforcement or behave more reactively, focusing on steering employees away from actions and mindsets that don’t reflect your organization? Professors Rao and Lilly discuss the merits of both a positive and negative approach to instilling culture. They note that it may seem easier to take a problem-solving method to cultural issues, but in the long run, reinforcing good behavior is likely more effective.

The concern with a negative approach — i.e., calling out employees when they do something that doesn’t align with the company culture — is that it can lead to overcorrection. Embracing a more supportive mindset and giving a shout out to staff members who reflect your values can do more to strengthen your culture. The one caveat is that it can take more instances of reinforcement for people to really absorb those messages, so it’s important that founders heap on the praise when it’s warranted.

Building diversity in your organization

For companies and organizations seeking to champion diversity and acceptance, it’s important to incorporate these qualities into their brand identity. But how do you do that effectively and sincerely?

The duo argue that it’s not enough to just roll out diversity programs — you need to be able to say why diversity is important to your organization. If it’s a cynical play for good press, then the public will see right through that. On the other hand, if organizations recognize it’s the right thing to do and understand that a more inclusive culture will help them deliver better services and support to diverse audiences, then they can get started on the right foot.

Decide the right company culture for your business

Matching culture to brand identity is critical. Even within Silicon Valley, there are many examples of successful companies with organizational cultures quite different from one another. The one thing they all share in common is those values — as different as they may be — fit them like a glove.

For instance, Google has a very collegial culture, providing employees with a lot of leeway to make their own decisions based upon the information that is available. Apple employees, in comparison, are on a much shorter leash. Professors Rao and Lilly explain that in each case, the organizational culture has been directly influenced by their founders. What you believe in and what you care about most will inevitably bleed into your organization. With a little awareness and preparation, you can strategically create a company culture that aligns your founders’ beliefs with a winning business strategy.

Be sure to check out the full webinar to learn more. Professors Rao and Lilly bring so much hands-on experience to the discussion, it’s well worth the watch to learn from them. If you’re interested in more interactive instruction, Professor Rao currently teaches the course “Building Company Culture” as part of the Stanford Innovation and Entrepreneurship Certificate Program. It’s a great opportunity to learn directly from one of the leading authorities on entrepreneurship and innovation.

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