Corporate Creed – Values, Desires, Purpose and Talents Are the Basis of a Startup’s Corporate Culture

Corporate Creed – Values, Desires, Purpose and Talents Are the Basis of a Startup’s Corporate Culture

Michael DouglasNo doubt about it, most Hollywood screenwriters disdain entrepreneurs. The negative depiction of entrepreneurs arguably reached its nadir in the film Wall Street. In one scene, Michael Douglas’s character proclaims, “Greed is good. Greed is right. Greed works.” He goes on to rationalize why it is OK to screw everyone on your way to the top.

The Hollywood screenwriters were close. The words they should have put in Michael Douglas’s mouth are, “Creed is good. Creed is right. Creed works.” The best antidote to greed is a strong Corporate Creed. Your adVenture’s Corporate Creed should be established early and be well understood by all of your employees, as it is the foundation of your corporate culture and ultimately your success.

Hollywood Shuffle

Hollywood often employs a variety of socially acceptable stereotypes, such as the nerd accountant, the dumb blonde and the unscrupulous businessperson who “does anything to win.” The vitriol with which screenwriters depict successful business people is understandable, when you consider that most scripts are written by individuals who have little understanding of business and who feel victimized by the business people with whom they work first-hand, namely studio executives. As such, their depiction of business people as greedy, avaricious and callous is unfortunate but not surprising.

Although such stereotypical depictions can make for entertaining, albeit predictable, movie fodder, such caricatures simply do not reflect reality. Entrepreneurs who are successful over the long-term do not leave a trail of destroyed relationships in their wake. As noted in Time Wounds All Heels, dishonesty is an entrepreneurial handicap.

The Importance of Being Earnest

“Their frail human nature was subjected to a strain greater than it was made for; the fires of greed had been lighted in their hearts and fanned to a white heat that melted every principle and every law.”

– Upton Sinclair in his novel, Oil

As Upton Sinclair aptly notes, greed is a powerful emotion that can “melt away” principles and laws, if they are not wrapped in the protective coating of an effective Corporate Creed. Without a strong grounding in shared values, desires and purpose, it is easy for individual employees to rationalize their actions as being “in the company’s best interest,” even when they are clearly causing harm.

In his insightful book Ready for Enlightenment?, Lex Sisney, Co-founder and former CEO and Chairman of Commission Junction states that a startup’s values, desires and purpose, when combined with its talents, result in the contribution that the organization can make to its members, stakeholders and society as a whole.

Lex points out that incongruence between these factors and an organization’s actions will result in tremendous stress and dissonance which, at a minimum, will distract an organization and potentially even cause its demise. I have borrowed these factors identified by Lex and repurposed them as the primary ingredients of an organization’s Corporate Creed, as shown in the diagram below.

An effective Corporate Creed shapes a startup’s corporate culture. In a company’s early stages, it may manifest itself in the form of a mantra, as described by Guy Kawasaki in Art Of The Start. In most cases, a pithy mantra is adequate for a startup, while formal mission and vision statements are usually overkill.

Bumper Sticker Creed

Big Dumb Companies (BDC’s) often spend months and many thousands of dollars developing mission and vision statements. Once these statements are codified, they are printed on posters, post-its, plaques, mugs, etc. Unfortunately, the BDC’s culture is usually vulcanized by the time such statements are written and thus is impervious to the impact of a slogan slapped on corporate chachkies. Despite the cost and effort, creating florid mission and vision statements is often an empty exercise, carried out to fulfill a corporate mandate, rather than to impact the company’s culture.

Culture Pryamid sml

Your Corporate Creed is the foundation upon which your Corporate Culture is built. Your culture will then manifest itself in the form of mission and vision statements.

At a startup, it is not effective to simply print your Corporate Creed on a poster and hang it in the copy room. Your Corporate Creed must be understood by all. Understood, not memorized. The internalization of the underlying message of the Corporate Creed is what matters, not rote memorization of empty platitudes.

An effective Corporate Creed should serve a self-monitoring function, which helps employees make routine, ethical decisions. If your Corporate Creed clearly defines the lines between right and wrong, you can avoid the problem encountered by William Hurt in the movie “Broadcast News.” At one point, Holly Hunter castigates Mr. Hurt for faking his reactions during an on-camera interview of a rape victim. “You crossed the line,” she screams. Without pause, he replies, “Well, they keep moving the line.” An effective Corporate Creed clearly points out the unmoving line between right and wrong.

The lack of a unifying creed is exemplified in Bowen McCoy’s Parable of the Sadhu, in which several disparate groups of mountain climbers simultaneously come upon a bedraggled Sadhu while at high altitude in the Himalayas. The Sadhu is in obvious physical distress and it is apparent he would not survive unless he is carried down the mountain a substantial distance and given shelter and food. Each party provides the Sadhu with some assistance, such as clothing, snacks and water. However, none of them climbers abandoned their journey to ensure the Sadhu’s safety.

Years later, McCoy remains haunted by his encounter with the Sadhu. Among the many challenges that he notes led to no one offering the Sadhu sufficient aid to ensure his survival was the individual climbers’ lack of a collective purpose, based upon shared values and beliefs. In effect, their lack of a Corporate Creed caused each of them to make an expeditious and arguably unethical decision to pursue their goal of reaching the summit.

“It is harder to be kind than to be clever.”

–Jeff Bezos, Founder and CEO Amazon.com

Jeff knows that consistent kindness can be a challenge, especially in a hectic, stressful startup environment. However, cleverness without kindness is likely to eventually result in unethical decisions that will harm one or more of your stakeholders. The manner in which Enron manipulated electricity pricing may have been clever, but it clearly was not kind. Organizations are not intrinsically evil. Those that turn to the dark side generally come into the world with high ethical standards that incrementally erode over time. A solid Corporate Creed acts as the guardrail that keeps your employees off the slippery slope that leads to the unethical dark side.

Google’s famous Corporate Credo, “Do No Evil” has recently come under fire. Is conspiring with the Chinese government to dictate the Internet content its population can access evil? Do No Evil is a powerful Corporate Credo. However, the criticism it has generated is indicative of the challenges companies face as they attempt to remain true to their Corporate Creeds as they grow and the control of employees’ actions becomes more decentralized. A Corporate Creed that is effective in a 100-person organization may be too idealistic and even ephemeral within a BDC whose culture has matured and is no longer based on the Founder’s values, desires, purpose and talents.

The Creed Seed

The following parable was sent to me by a friend. Although I rewrote it to a fair extent, the basic premise remains unchanged. My research indicates that the original author is unknown, but please apprise me if you know the origin of this story so I can provide proper acknowledgment.

A successful CEO was growing old and knew it was time to choose a successor to take over his company. Instead of choosing one of his senior executives or Board members, he deployed an unusual succession plan.

He gathered his young executives and announced, “It is time for me to step down and choose the next CEO. I have decided to choose one of you.” The old man ignored their surprised response and continued, “I am going to give each one of you a seed – a very special seed. I want you to plant the seed, water it regularly and return three months from today with the plant you have grown from the seed. I will then judge your results and choose the next CEO.”

Jim, one of the young executives, went home and excitedly described to his wife his role in the unconventional succession plan. That evening, they went to a nursery and purchased a large pot, expensive, high-quality soil and organic fertilizer.

After about two weeks, some of the other executives began to talk about their plants, which were beginning to grow. Jim kept checking his seed, but it had not yet germinated. Three weeks, four weeks, five weeks went by and still nothing sprouted. By now, Jim’s peers often spoke about their thriving plants, but Jim’s seed still showed no signs of life.

Two months went by and Jim’s pot remained lifeless. He did not confide his failure to his colleagues, who continued to boast about the growth of their seeds. Despite his disappointment, Jim continued to diligently water his seed.

Three months finally passed. On the morning of the dreaded inspection, Jim lay in bed and told his wife that he would rather submit his resignation than be subjected to the humiliation of his lifeless pot. Although she shared his frustration and disappointment, she encouraged him to attend the meeting and live up to his obligation to reconvene with the CEO. Jim was sick at the thought of the embarrassment he was about to face, but he knew that his wife was right.

When Jim entered the company’s Board room, he was amazed at the variety of lush and bountiful plants grown by the other junior executives. Apparently, no one else had killed their seed. Jim clutched his lifeless pot to his chest while doing his best to avoid eye contact with his colleagues, some of whom smirked, while others offered looks of sympathy.

When the CEO arrived, he surveyed the room and greeted the young executives, “My, what great plants, trees, and flowers you have grown.” The CEO spotted Jim through the foliage, holding his empty pot. He pointed and called Jim to join him at the front of the room. Jim was horrified. He thought, “The CEO sees that I’m a failure and plans to make an example of me. I just hope he does not fire me in front of everyone.”

Jim stood before the CEO, who asked him, “What happened to your seed?” Jim explained how he purchased quality soil and fertilizer and meticulously watered his seed during the entire three-month period.

When Jim was finished, the CEO turned to the crowd and announced, “Behold your next Chief Executive Officer.”

Jim could not believe his ears. He could not even grow a seed. How could he be expected to grow and nurture a company?

Then the CEO said, “Three months ago, I gave everyone in this room a seed. I told you to take the seed, plant it, water it, and bring it back to me today. The seeds I gave you had been boiled and thus were incapable of germinating.”

“When you found that your seeds would not grow, you substituted another seed for the one I gave you. Jim was the only person among your ranks with the courage and honesty to bring back the original seed. Therefore, I am appointing him to be our new CEO and each of you must immediately begin seeking employment elsewhere.”

A clear and deliberate Corporate Creed will help you define which seeds to plant in order to achieve your adVenture’s aspirational values, desires, purposes and talents. From these seeds, you will reap your corporate culture.

Plant honesty – reap trust

Plant goodness – reap loyal relationships

Plant humility – reap honor

Plant consideration – reap perspective

Plant persistence – reap success

Creed is good. Creed is right. Creed works.

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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