Core Values That Sustain Your Startup’s Culture

The following is a true story. The names have been withheld to protect the entrepreneurs’ competitive advantage.

Once there was a startup that grew to the point that the newly hired employees began making decisions that troubled some of the long-time employees. Distressed, the tenured employees approached the CEO and expressed their concern that the company’s culture was being damaged by the newer employees.

The CEO was initially at a loss. The new employees were well-educated, hard-working and dedicated to the adVenture’s success. However, the CEO agreed that some of their actions were inconsistent with the company’s values, desires and purpose. The CEO was confused, as conveying the Company’s cultural tenets had never been an issue that he had to proactively address. In the past, everyone just knew the company’s Corporate Creed.

Understanding how the CEO solved this dilemma may benefit your startup.

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The CEO was well aware of the shortcomings of most Mission Statements, which often are little more than corporate wallpaper. He did not want to waste time crafting empty platitudes that would be understood by few and acted upon by no one.

Instead, he methodically devised ten Core Values based on the new employees’ actions that troubled him and his long-term employees. He was motivated to focus on these troubling actions as a basis for deriving his Core Values after reading Verne Harnish’s book, Mastering The Rockefeller Habits.

The Core Values have been so effective in maintaining the company’s culture, the CEO believes they represent a significant competitive advantage. He agreed that I could publish the values with the proviso that I not cite him or his company. The CEO believes this list of Core Values is one of the key reasons that his adVenture has maintained below-industry employee turnover rates for well over a decade. As such, he does not want to alert his competitors to what he believes is a real competitive advantage.

The Core Values

1. Always Invest, Never Spend

Be frugal but not cheap

2. Proactive Mentality

Follow up, anticipate, prevent

3. Seek “Quad” Wins

Ideally, the Client, Company, Team, and Individual should all benefit

4. It’s Everybody’s Problem

Take ownership, be accountable, offer assistance

5. Mistakes Are Opportunities

Learn from new mistakes, avoid repeating old ones

6. Never Give Up But Be Reasonable

See a commitment, resolution, project, or idea to its completion

7. What SHOULD I do? vs. What CAN I do?

Never take advantage of a situation, just because you can

8. Enhance Everything

Make continuous improvements to Client, Company, Team, Individual

9. Team Above Self

The Team’s objectives supersede those of the Individual

10. No Solution, No Whining

Whining allowed only if followed by a thoughtful solution

It is refreshing to discover a set of real-world Core Values that have been effectively internalized by a thriving organization. The values have become part of the organization’s fabric. There is no need to plaster the walls, coffee mugs or paperweights with your Core Values when they reside inside the hearts and minds of your employees.

Focusing on the “bad behavior” exhibited by the newer employees resulted in a set of values that were highly relevant to the CEO’s company. Over the past several years, the Company’s Core Values have become so ingrained in the company’s culture that employees regularly cite specific values as the basis for their decisions. For instance, when someone proposes a suboptimal solution, a common response is “that is not a Quad Win.” If an employee complains about an issue without proposing an alternative course of action, the team’s response is “No solution, no whining.”

The Core Values represent who the company is. Once it was clear that the Core Values had been internalized by his organization, the CEO created five Keys to Success to define how the company would achieve its objectives.

In order to make the Keys to Success more memorable, the CEO created the mnemonic “IP-Triple C,” which has become the term by which most employees refer to the Keys to Success.

Keys To Success

Integrity

Passion

Commitment

Competence

Conscientiousness

These factors are essentially self-explanatory, with the possible exception of Competence. In this context, it refers to the employees’ individual and the company’s overall talents, which tend to be consistent over an employee’s career. In contrast, interests generally change over an employee’s lifetime. Talent is the fourth component, along with values, desires and purpose, which form the foundation of a company’s Corporate Creed.

In order to help his employees discover their aptitudes, the CEO encourages them to take the Johnson O’Connor Aptitude Test. Once an employee’s aptitudes are understood, the organization attempts to assign each employee responsibilities that are best suited for their individual talents.

The CEO notes that there is no “magic” in the number of Keys, stating, “It is not five factors because that is a nice, round number. It could have been one, seven or eleven. It just turned out that I identified five success factors that are aligned with our culture.” The CEO holds all employees, vendors and other Stakeholders associated with his adVenture to this definition of how the company pursues success.

The combination of the Core Values and the Keys To Success has resulted in a thriving organization that, despite competing in a vigorous market, has managed to consistently generate profits that substantially surpass industry norms. The Values and Keys clearly communicate the “rules of the game” and provide guidance to employees when they encounter potential ethical or moral dilemmas.

One of the reasons the CEO was able to successfully reinforce and clarify his company’s corporate culture was that the words he chose to communicate who the company was and how it would conduct itself were directly aligned with the company’s Corporate Creed. Without such alignment, his Core Values and Keys to Success would have made decorative paperweights and coffee mugs and nothing more.

These lists will be ineffectual if they are mindlessly applied to your adVenture. However, they can serve as a catalyst to assist you in devising relevant core values and keys to success that are aligned with your company’s Creed. Such alignment will serve to unify your employees around common values and desires and a shared purpose, in the same fashion as the company featured in this true story.

Copyright © 2008 by J. Meredith Publishing. All rights reserved.

 

John Greathouse

John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara’s Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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  • Fantastic post – right on the money as usual!

    As the CEO of an early stage high-tech venture and having started a few I have to say that as you grow this culture problem can be a real challenge to the business.

    My own take on this, although less comprehensive is:

    F..un
    S..ervice
    P..rofit

    Don’t do it unless you can have fun doing so – in other words do what you love and make sure the rest of the team feel the same way. Misaligned, miserable, grouches need not apply.

    Give 150% to yourself, your team and your customers (and suppliers) – demand the same in return. Be totally committed and passionate about your role and be prepared to “contribute” to and support others within and without the venture. Let the team be involved with new hires so that they can help filter and apply the “culture” before recruitment and during the settling-in process.

    Profit will come if you can pull all the rest together…but that’s the end result not the focus of the venture.

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  • Uncle Saul

    Jon,

    Thanks for the kind words and the additional insights regarding “FSP”.

    I checked out your site (http://www.tobeanentrepreneur.com/) and we clearly agree on a number of startup related issues. Keep up the great work.

    Uncle Saul

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  • Great post – but what about how to deal with employees that do not conform to the new corporate creed.

    Its easy to say, “this is the creed” – but if the new employees don’t “Get it” or “understand it” or “respect it” then what?

    The easy answer is “get rid of them” but what is Uncle Saul’s answer?

  • Uncle Saul

    [quote comment=”1231″]

    Its easy to say, “this is the creed” – but if the new employees don’t “Get it” or “understand it” or “respect it” then what?

    The easy answer is “get rid of them” but what is Uncle Saul’s answer?[/quote]

    Yes, firing people is all too often the “easy” answer.

    However, if the issue is lack of understanding or not ‘getting it’, I would take the time to ensure the employees really do ‘get it’. You can do this in a variety of ways, keeping in mind that different people learn more effectively from different methods.

    For instance, you might set up an informal interaction (lunch, drinks, whatever) by which the old-school employees who do ‘get it’ can share why they believe in the Creed. Hopefully they will be able to draw upon real-world examples that underscore why the Creed is good for the Company and its Stakeholders.

    If someone doesn’t ‘respect’ the Creed, I would hear them out. They may have a legitimate issue or concern. However, if they still do not respect the Creed after you have explained its rationale to them, their lack of respect may signify deeper issues that may well warrant their departure.

    It is tough to say without knowing the specifics of your situation, but a lack of respect is often a corporate culture cancer that manifests itself in numerous negative ways. It is usually best to excise it as quickly as possible.

    Best of luck to you and thanks for the question.

    Uncle Saul

  • Interesting article and Verne’s book is very interesting. Have met him and few times and seem him speak many more. We are big believers in core purpose and core values, we even had Gary Busey record a video to share these.

    http://www.davidhauser.com/MINDdrift/2008/07/gary-busey-and-gotvmails-core.html

  • Adekoya Bimbo

    i found this piece very informative,very useful for me as i intend to set up soon.thank you uncle Saul.

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  • communicate, it’s your job to promote the new corporate identity, you can’t force others to do it

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  • Yadgyu

    The real problem seems to be that the tenured employees were snitches.

    I often see older employees become jealous of newer employees. This happens when the old folks become complacent. They get lazy, but scared when the new employees outproduce them. The older employees will either try to bully the younger employees into compliance. When that doesn’t work, the older employees will start telling on the newer guys.

    I just wish that people would mind their own business and stop trying to tell others how to work. Some people do not want to be a part of the team. They want to contribute and be left alone.

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