In the life-cycle of a company — be it a high tech startup or a paint manufacturer — the initial culture of the company is grown from the seed corn of the founders’ values.
The first challenge for any founder is to codify his/her values while recognizing that she/he owns the culture when the ink is still wet on the founding documents.
The culture is a living organism in much the same way that yeast provides life to dough and water to somehow magically become bread when presented to fire.
It is important to think about culture, but it will happen whether you think about it or not.
If you fail to think about and nurture your culture, then it will become whatever organism is blowing through the air. [The air is different in Silicon Valley than it is in, say, Austin By God Texas. Know this.]
In thinking about culture, go here: The Company Culture Series — a collection of 14 blog posts on the subject of culture.
Founder Values Beget the Initial Culture
The founders’ values beget the company’s initial culture.
Again, a founder must marshal and codify her/his values, reflect upon them, prioritize them, speak them, but, most importantly, live them.
Values are what you really do when nobody is watching.
They are not what you write down in a literary exercise answering the question, “If everything went fine, this is who I would like to be when I grow up.”
You do not have any real values until you are confronted with their price tag. When you see and PAY the price, only then do you have values.
I am reminded of my once saying to my company: “We eat all the broken pies.”
I meant that if we made a mistake on a quote, on anything that we independently controlled, then we honored it.
I once reported my own company for a fairly substantial regulatory violation. Oddly, the regulators could not fathom why I did this, so they exacted no penalty.
The company got the message and for the rest of time they knew — “We will play this game in conformance with the rules and if we don’t there will be consequences.”
Thereafter, the company owned that value.
The company had picked my pocket, stolen my value, and labelled it their own. And, I, wisely, stood there and let it happen.
Founders Surrender the Culture to the Company
In my anecdote above, there is a subtle point about ownership of the culture.
As the CEO, I imposed my values on the company. I was not running a democracy. In business and life, you do not get power. You take it. I took it.
However, thereafter, the company owned the values and they owned the culture. To continue to grow, I had to surrender the values and their impact on the culture.
Members of management drove the business no longer with MY values, but with the company’s values.
The CEO was no longer the exclusive planter of the cultural seed.
The company now owned the culture. The seeds were no longer producing seedlings. They had taken root and were growing into mighty oaks that could stand changing winds because they were deep rooted.
Culture Begets Reputation
Culture exists inside a company. Reputation is the view from the outside.
Within the company we know what we do and why.
Outside the company, the world knows what you do and speculates as to why.
When you have been in business for some time, the company, its leadership, its management develop some public note of how they conduct business.
I was once negotiating an acquisition with a major insurance company. I was trying to buy a high rise office building.
The competition got down to my company and the largest US company in that industry.
The seller said to the other competitor, “I would take the Big Red Car’s handshake before I would take your 40-page contract with the escrow check attached.”
My competitor told me that story some years later. I had heard it, but I didn’t believe it. He confirmed it.
We were trading on our reputation, which was driven by our culture, which had been created by our values.
Reputation Begets History
When I sold the company, I was left with a full pocket and a fuller heart. I never intended to create a company that lived beyond the disposition of the assets.
Two funny things happened.
First, the acquirers found value in the going concern and paid for it. They hired all the people and stole our systems.
Second, the people who had worked for the company remembered with fondness the character of their association and over the years a warmth developed.
That was the beginning of our history.
I was very impressed with the team I had assembled and, without exception, all of them went on to better things. Several companies were spawned.
Today, I will bump into those people and they will tell me they credit their success to what they learned working for me. I am understandably grateful, but I really only get credit for hiring them. They did the learning and the growing by themselves.
Bottom line it, Big Red Car
So, dear reader, there you have it.
In the life of a company the founder/CEO brings his/her values to the enterprise.
The initial culture is imbued with those values and grows until the founder/CEO is no longer the owner of the culture. It is surrendered to the company. The company owns it. If the culture was good, it will continue in a positive direction.
The subsequent culture is owned by the company itself, the people. The CEO must let go, like sending a child off to college or into the military. If the CEO has done a good job, if the seed corn was true, the company will be fine.
This internal culture creates the view from afar, the company’s reputation. The company will trade on that reputation.
Over time that reputation and culture begets the history of the company.
What you have to know is this — IT ALL STARTS WITH THE FOUNDER/CEO’S VALUES.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car and I need a good paint job. Plan to call somebody on the weekend who needs to hear your voice. BTW, while we were chatting, college basketball cranked up. Hook ‘Em, Heels!