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What is Startup Culture? Definition, Benefits and Tips

Strong startup culture is a crucial factor to business success. Let us break it into pieces to understand its importance and ways to realize at workplace.

14 min read

Every company is formed to achieve a particular goal. This can be gaining popularity, introducing a new way to solve trivia problems, earning money, carving a specific niche, or helping people without profit. To obtain this objective, the company brings various individuals together who have to work on a common platform. This practice has served great for generations; however, it has one big flaw: it does not motivate employees to deliver their best level.

To overcome this shortcoming, in 1951, Dr. Elliott Jaques (Canadian psychoanalyst, social scientist, and management consultant) introduced the World concept of organizational culture that today is widely known as start up culture. This marketing term has revolutionized the employee environment, bringing numerous benefits to the company. For instance, when a professional startup branding agency does it, it may easily create a strong reputation.

Let us dive a little deeper into this term and find out what is a startup mentality? What are proven ways for building culture in a startup? And what are the top examples of organizational culture?

Before moving to the definition, it is crucial to note that although startups are small, relatively young organizations, it still does not mean they are alien to establishing and preaching corporate ethos and values. On the contrary, according to recent studies, small local businesses have the best startup culture. This means that this concept is native to companies of all scales, sizes, and ages, and ipso facto, every business owner should give it a thought.

Startup Culture Definition

Startup culture meaning is originated from the definition of work culture. According to Layman's language, the term implies startup environment and overall organization ambiance, whereas Dr. Elliot Jaques, the father of this concept, described it as the company's customary and traditional way of thinking and doing things that all its members share. So, what is what - let's crack this nut.

Key Elements of Startup Culture

Eric Flamholts, the professor Emeritus at UCLA's Anderson School of Management, has identified the modern version of key elements of startup company culture. They are:

  • The way the company treats customers.
  • The way the company treats employees.
  • Standards for performance and accountability.
  • Innovation.
  • Process orientation.

Compare and contrast these critical components of a startup working culture with the definition given by Dr. Elliot Jaques, who defined them more than 60 years ago. They are:

  • Fair treatment for everyone.
  • Leadership interaction between managers and subordinates.
  • Accountability and authority.
  • Long-term organizational vision.
  • Overall participation in policy development.
  • Opportunities to self-improvement in progress within the working field.
  • Providing employees with the work level that matches their capabilities and values.

As you can see, there is a slight difference between the content of the elements. Some are interchangeable, whereas others cover a wider area gathering several postulates under one roof. This means that startup company work culture principles have not been changed for decades, providing a solid foundation for small companies across the Globe to create a strong culture.

Startup culture | Image by RF._.studio

Benefits of Startup Culture

Every business has a different ethos developed to cater to their individual needs. However, even though the organizational culture may vary from company to company, nevertheless, when it is well-established, it offers almost the same range of benefits such as,

  • Smooth and productive recruitment. The team-first organizational culture implies hiring people, who are more likely to blend into the start up environment, appreciate colleagues and build strong relationships within the community from the start.
  • Smooth onboarding. When recruits know what day-to-day office life is and what the values and ideology of the company are, it is much easier for them to become a valid player of the team turning onboarding into a pleasant pastime.
  • Higher employee retention. Strong work culture helps companies avoid the high turnover of employees and bring back those who want to leave.
  • High-level of productivity. Strong startups culture is a catalyst for better productivity because it enhances teamwork, provides a high sense of satisfaction, and increases performance on various levels.
  • Heighten a sense of loyalty. When an employee feels comfortable and appreciated at the workplace, their appreciation rises. This leads to a high level of devotion and faithfulness to the organization.
  • Strong reputation. Well-defined work culture has a positive effect inside and outside the company. It helps build a reputation supported by customers' feedback and by employees.
  • Better customer satisfaction. When the team praises the company's ways and works as a single unit, it is easier to deliver the brand message and provide exceptional service. This leads to happy customers, more retention, and more leads.
  • Source of Improvement. Satisfied employees, much like happy customers, may become a source of inspiration, innovation, and improvement of the product and company.
  • Revenue growth. Good reputation, excellent customer service, satisfied employees – all these lead to revenue growth.
  • Longer company's lifetime. With revenue growth and good reputation come stability and devotion to the brand, which are crucial factors to prolong the organization's life and give it a chance to stand the test of time.

Need For Startup Culture

Do you know that Forbes called 2022 "Year of Work Culture"? Why? According to recent studies done by Glassdoor, nowadays, it is much more challenging to recruit talents than several years ago. Due to the pandemic, a tight labor market is gaining momentum. More and more people prefer to stay and work at home, enjoying a balance between work and personal life. Therefore, a work culture that drives employee engagement and offers perks that compel employees to stick around the office comes to the fore.

Apart from this, there are some other good reasons why the well-defined culture of a startup company is crucial.

  • First and foremost, it meets emerging trends. For instance, the Harvard Business School survey suggests that companies whose work culture offers their employees a hybrid schedule with flexible hours are more likely to recruit top performers. It is a trend to meet to secure the best employees these days.
  • Second, it motivates employees to work hard. As studies show, companies with the best startup cultures ensure a high level of performance regardless of the current situation in the market.
  • Third, it celebrates recognition, making employees feel appreciated. This helps to escalate productivity and strengthen brand reputation.
  • Fourth, it creates a collaborative work environment that makes employees work as one unit. As a single unit, a company may easily enlarge its portfolio or improve existing products.
  • Fifth, it helps attract highly skilled job applicants and extends the pool of top talents who will improve the product and company inside out.
  • Sixth, it minimizes expension and lowers turnover rates.
  • Finally, it helps young companies to overcome challenges and survive the cut-throat competition because well-thought-out work culture unites forces of various professionals and makes the most of this symbiosis.

Tips to Build Startup Culture

The marketing universe is infamous for lacking one-size-fits-all solutions; building a startup culture is no exception. It is a multistep process that requires constant enhancements to unlock its potential. It largely depends on its philosophy, niche, and current trends and moods. Though, no panic. All healthy work cultures have many traits in common; therefore, you may follow well-established principles and get some insights from startup culture ideas shared by successful businesses.

Lay out Core Values

Clearly defining core values and educating your employees about them is crucial. This helps guide the organization's evolution and make the right decisions to improve the overall environment.

Take your time to evaluate every opinion: leadership, long-term employees, HR representatives, and newcomers – everyone should be heard. Always focus on a value or practice that matters to employees. For instance, provide a meal allowance, let everyone pitch ideas and voice concerns, or offer an education stipend to develop new skills.

Focus on Financials, Flexibility, and Formation

According to recent studies, these three cultural aspects are critical for employees to feel satisfied. Conduct surveys to find out what expectations are for them.

To give you a hint, some companies improve the financial aspect by offering free counseling with a financial advisor or updating Paid Time Off policy to meet the needs of the employees. These small changes go a long way. They show your company invests in a person's future, which builds trust and increases loyalty.

Create an Inclusive Work Culture

Promoting inclusivity and diversity by erasing borders and welcoming everyone regardless of their background is a massive step towards creating healthy and strong work culture.

Celebrating diversity helps unite people together and gives them a boost and inspiration to move towards the goal more efficiently. Therefore, not only do make it a part of your recruitment process, but most importantly, practice it every single day in meetings, conferences, and conversations.

Diversity | Image by Katie Rainbow

Establish a Strict Zero-tolerance

Providing employees of all levels an opportunity to report incidents and speak openly in the workplace is another fundamental facet of the healthy startup's culture. Not only should employees know their rights, but they should also feel protected. For this, grant everyone access to critical information, and ensure you provide quick access to vital resources and your HR department.

On top of that, prioritize respect regardless of employee's status within the company and departments. Everyone should have an opportunity to share their thoughts and put forward ideas. Every member should feel valued and heard.

Preach your Ways

Laying out core values is one thing, but practicing what you preach is another. This can be difficult; nevertheless, it should be done.

As many successful companies agree, leaders may set a healthy startup culture; however, employees should maintain and nurture it while HR specialists should monitor the process. Therefore, train your team to ensure everyone is on the same page. Do not let go of this process; always keep abreast of changes and address issues immediately.

In addition, use these values in the recruitment process. This will help add to your pool of professional individuals who will blend in and work effectively from the start.

Capitalize on Rewarding Programs

Rewarding programs are the best way to make employees feel appreciated and valued. Recognition compels professionals to perform at impressive levels and pushes them to achieve better results.

On top of that, this motivates peers to foster a positive environment that maintains a strong work culture.

Collect Feedback and Keep Improving Startup Culture

Your company may stay small and exclusive with just ten members on the board; however, the work culture constantly progresses. It will grow and evolve, trying to meet ever-changing trends and adjust to the current situation in the market. Therefore, it should be regularly reevaluated.

Unvarnished feedback provided by employees is the best source of insights on what should be changed or improved. Conduct surveys and roundtable meetings time after time to surface issues and quickly address them, keeping work culture healthy and strong.

Follow these tips provided by successful businesses:

  • Increase DEI (diversity, equity, and inclusion) efforts.
  • Increase sense of belonging.
  • Offer more benefits for moving toward well-being.
  • Provide ways to strike a balance between work and life.
  • Make employees feel connected at work.
  • Make a company a place where employees may feel authentic.
  • Make people feel connected to the purpose.
  • Recognize the work of employees.
  • Incorporate trends. For instance, offer remote and hybrid work arrangements, provide more transparency in the work environment, communication, and relationships, offer free educational resources for upskilling and reskilling.
  • Invest in employee's growth.
  • Create new promotional opportunities.
  • Improve digital tools and provide necessary applications to enhance the workplace.
  • Satisfy the need for inclusivity and equality.
Inclusivity | Image by Marcus Aurelius

Top Startup Culture Examples

Organizational cultures come in all shapes and sizes. As we have already pointed out, mainstreams, current moods, and even such things as a pandemic may drastically change its face. Therefore, it varies from company to company. However, according to studies working cultures can be broken into categories. These types are a solid foundation for building your organizational culture or improving existing ones. Let's consider them closely.

  • Innovation-centric. Old ways are despised here. Companies with this organizational culture stay on top of things and employ cutting-edge technologies. They improve and innovate the environment by rolling out new offerings. Tech startups and pioneering companies adore this practice. With its great tech startup culture, Google is among its famous representatives.
  • Equality-centric. This type of culture does not recognize hierarchy. Employees are seen as peers or equal members of the team. Equal footing is seen across various professions, levels and departments. Open and informal communication is another characteristic trait of that. It helps to establish a healthy and comfortable environment. Employees feel a part of the company. Usually, small local companies fall into this category.
  • Customer-centric. "Customer is always right" is the motto of these companies. Customer ratings and feedbacks are of top priority. As a rule, employees are willing to go the extra mile to ensure clients are satisfied with the service. Zappos is one of those organizations that cultivate this type of culture.
  • Hierarchy-centric. This is one of the most popular types of work cultures. It sticks to well-established rules and traditions to avoid mistakes. Everyone has a clear understanding of the role and responsibilities. There are managers, subordinates, and all other levels. Sometimes it implies various programs for training mentorship, coaching, and leadership that help existing leaders and high-level managers to assist their subordinates in achieving the same success in their career. It is the most stable and practical type; however, it is old-fashioned; some employees may feel stodgy there. Financial institutions prefer this type.
  • Power-centric. Competition is the critical factor of this type of organization. Employees implement various strategies to gain power, stepping over the "good of the whole." Although it seems such cultures are toxic and destroying, nevertheless, they prove to be effective in such sectors as investment banks, insurance sales, and financial consultancy firms.
  • Mission-oriented. Most startups prefer this type of organizational culture because they are tied to one goal. This is typical for nonprofit organizations and startups that want to make the world a better place. All members are tied together and work towards one mission. As a rule, employees are chosen by their passion and devotion to the mission. However, there are exceptions. For instance, startups may also employ a task-oriented culture that implies a working environment where all team members work as a single unit to sort out inbound issues. In that case, the recruit is interviewed by all group members to see whether they are the perfect match.
  • Strong role-playing. Specialists are a top priority here. They undergo extensive training, have a responsibility to finish projects on themselves, and get higher payments compared to the organization with other types of working cultures.

All these types come with their pros and cons. For instance, while adhocracy benefits companies by sticking to innovative ways, as practice shows, it can be too fast-paced for some professionals who may play a crucial role in product development. Therefore, when deciding on what type of working culture fits your startup, it is essential to weigh all pros and cons and find suitable solutions to overcome shortcomings.

Conclusion

Startup culture is a term with a long history. Originated in the late 50s, it got some enhancements along the way to meet the needs of various generations. While it was just a pleasant addition several decades ago, today, it is a crucial facet of the company with immense importance. Why? In today's realms of remote and flexible working hours and a wealth of opportunities to prove yourself, inner organizational culture has become vital for employees to stick around.

What's more, summing up startup culture values and qualities and everything a company stands for, including postulates, beliefs, and attitudes, it is also the most effective tool for businesses to retain employees and attract talents that fit the purpose. Therefore, it is crucial these days.

To make the most out of it, it is vital to understand its meaning and key elements. There are five to seven cultural components. However, depending on your niche, scale, age, and pool of talents, you may deem other features essential for success.