This article was heard on the radio program "The Computer Report," which is broadcast live on WCAP in Lowell, Mass., and is syndicated on WBNW in Boston and WPLM in Plymouth, Mass, and is also available as RealAudio at www.thereport.com
It was prompted by reading Clicks and Mortar: Passion Driven Growth in an Internet Driven World by David Pottruck and Terry Pearce and from a recent chat program where we had Terry Pearce as a guest. For an edited transcript of that chat session see www.samizdat.com/chat131.html. For links to all the transcripts and the schedule of upcoming chat topics, see www.samizdat.com/chat.html.
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As Terry put it, the world is changing so fast that the ultimate competitive advantage is to institutionalize the ability to change. This is done by building commitment from people, by building a culture based on values that do not change. This is primarily the responsibility of leaders, who inspire commitment rather than merely requiring compliance. The entire organization has to be aligned behind this idea, and the business practices, from measurement to compensation to marketing, have to be consistent with that culture.
My take on that from the employee's perspective is that you only have one life and you want it to mean something. If the company you work for is striving to accomplish goals that you believe in, that's more important as a motivator than cash and perks.
Internet startups face the problem that they must build a "culture" extremely fast, from scratch, and motivate a team that is probably geographically dispersed and that consists of people who have been recently thrown away by big companies or are coming for other startups where they stayed for less than a year. That's not easy.
Terry noted that if the entrepreneur starts with the right stuff, then he or she can draw people to the company who share the right values in the first place.
But, from what I've seen, the founders typically have great business ideas and passion, but may not have lots of experience running companies. Hence they may not appreciate how difficult it can be to strongly motivate employees over long periods of time and hence may not value the concept of corporate culture.
In any case, in today's tight labor market, you can't cherry-pick your employees. It's extremely rare that the founders will be able to recruit significant numbers of people who they have worked with before and who already understand and trust them.
The founders are moving very fast, and have no time for courses on culture building and leadership. Typically, they have 6-9 months from when they got their angel money to recruit dozens of skilled people, develop product, and find early customers, so they'll be in the right position for the first round of venture capital. They work 30 hours a day, eight days a week.
My sense is that the business plans and prospects get close scrutiny, but that corporate culture gets short shrift, if any shrift at all. In the first weeks and months, when everyone is running on adrenalin and dreams of fortune, and when the company is small enough for the founders to know and talk to everyone, the value of culture may not be evident. But when the founders get wrapped up in making customer and partner contacts and trying to raise the next round of money and don't meet face-to-face with the team for weeks at a time; or when much of the team is dispersed; or when critical elements of the team are not "employees" but rather are contractors and consultants and partners, the gears may start to grind.
To move as quickly as they must, the founders have to inspire and motivate a work force that, in recent years at other companies, has been treated as "disposables." And they have to make a strong and clear impression right away, while they still have the luxury of being visible and accessible to employees. They have to pay attention to the corporate culture that they help shape -- either knowingly or inadvertently -- by their every action -- how they treat their people and respect them and give them responsibility and reward them for team behavior. Building a culture is as tough as building a brand -- it's not the words that count, but rather the actions that people perceive and remember.
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