As your company scales, your culture will change with it. You will be hiring a broader set of functions, bona fide executives who can function at scale, and probably people with less risk tolerance and more process tolerance. At the same time your company will grow ten- to a hundred-fold in size which means communications, processes, and adherence to various internal controls for an IPO or other reasons will need to increase. It is inevitable your culture will change alongside everything else.
As the founder or CEO you will be responsible for determining which parts of the culture you need to keep, what to morph, and what to drop altogether. You will need to communicate to veteran employees that these cultural changes are needed just as you need to keep iterating on your products and team. Your biggest levers for shaping culture have to do with who you hire, the behaviors you emphasize and reward, and the people you let go.
Never, ever compromise: Hiring for culture
While your company should be focused on diversity of background, ethnicity, gender, class, and other attributes in employees, it should also look for cohesion in purpose, intent, and baseline culture. Your culture acts as an unwritten set of rules and values that drive behavior and cohesion across the company. Your company culture is the foundation on which everything you do rests.
Cohesive cultures are more resilient and can withstand shocks (fierce competition in the market, bad press cycles, a product failure, or other issues). They can also be extremely motivational and draw out the best in people (e.g., engineers at Palantir who used to sleep under their desks in the belief that they were helping national security, or the emergence of Google’s “don’t be evil” doctrine).
Bad culture leads to pain
Most companies do a poor job of pursuing a common culture or are willing to sacrifice it when they hire in order to “get someone effective” or “fill a need.” This typically backfires in a big way over the short- to medium term. Every single founder I know who has compromised on culture when hiring has regretted it due to the disruptions it has caused their company: having to fire bad actors, creating a crappy work environment, good people quitting, trust eroding between coworkers, product moving in the wrong direction, misaligned incentives emerging in the organization, etc.
“Every single founder I know who has compromised on culture when hiring has regretted it due to the disruptions it has caused their company.”
– Elad Gil
How to build a strong culture 1
1. Have strong hiring filters in place. Explicitly filter for people with common values. You need to be careful that this does not act as a mechanism to inadvertently filter out diverse populations. You can have both a common sense of purpose and a diverse employee base at the same time. See later sections and the interview with Joelle Emerson for more information.
2. Constantly emphasize values day-to-day. Repeat them until you are blue in the face. The second you are really sick of saying the same thing over and over, you will find people have started repeating it back to you.
3. Reward people based on performance as well as culture. People should be rewarded (with promotions, financially, etc.) for both productivity and for living the company’s values.
4. Get rid of bad culture fits quickly. Fire bad culture fits even faster than you fire low performers. 2
This chapter focuses on #1 above: the hiring filters you can use to optimize for core values and culture.
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