Most new startups have the kind of organizational culture leaders dream about. They can nimbly gather, process and reflect on employee input with minimal bureaucracy and capitalize on regular interaction with their carefully chosen teams. While positive cash flow is the prize everyone strives for in the formative lean years, unfortunately, some leaders lose sight of their culture along the road to success.
Eight-year-old Uber has already had its share of troubles and, recently, multiple examples of performance at the expense of culture makes it clear that something has to give. One disruption in particular resulted from a mishandled case of sexual harassment experienced by Susan Fowler, a former engineer for the online transportation network company. Uber’s human resources department recognized it to be a clear case of sexual harassment but they didn’t feel comfortable giving the manager in question anything more than a warning and a stern talking-to because he was a performer.
Also eight years old, but at the other end of the cultural spectrum, is a company called Inkling, a digital content management site, that works hard to nurture its workplace environment. Founder and CEO, Matt MacInnis, recalls a painful lesson when they hired “Jane” who was a hard-working employee but a “vortex of negative energy.” She brought everyone down with her. By waiting to fire Jane, management sent the message that performance was more valuable than good behavior and positivity. MacInnis explains that hiring Jane was their first mistake but their inaction compounded it. As a result, there are three ways Inkling now works to keep their culture in check:
Hire slowly and fire quickly
MacInnis talks about rejecting the urgency to make risky hires and to fire as soon as possible, overcoming the anxiety it brings. (I talk about the importance of hiring good people here.)
Reinforce behavioral values
Choose principles, like those found in Conscious Business by Fred Kofman, to guide your culture and hiring process. The book outlines essential character traits that MacInnis incorporates into his onboarding process in a six-week reading club where they use the book’s language every day.
Prioritize your values and live by them
MacInnis and his team adapted Suze Orman’s maxim, “People first, then money, then things” to say they put people first, then culture, then strategy. Great performance has staying power when it’s grounded in value-based behavior.
Most organizational cultures experience death by a thousand cuts. No one cut on its own is fatal as we’ve seen in Inkling’s case with Jane, but they can build over time and, ultimately, hemorrhage. I understand the challenges of turning a company’s culture around—my first day as Prologis’ CEO showed me how important company culture could be. The company had done extremely well for 15 years, but in the ten months leading up to my first day, the stock had fallen by more than 96 percent. The company was in a fragile state and our culture needed mending if we were going to turn our performance around. Fortunately, we succeeded.
Culture and performance go hand-in-hand. You can’t forsake one to secure the other. Otherwise, you’ll find yourself leading an organization where questionable behavior rules the day, and your culture becomes something that happens to you rather than something where you nurture what happens. Don’t let culture be a casualty. Instead, lead your people with character and make room for values-based performance.