On Leadership and When Culture Goes Wrong

January 5, 2023

Culture is something that nearly every single entrepreneur who's sharing their story will talk about, and I think that in and of itself is worth paying attention to.

Why is it that every founder speaks about culture? Why is culture fundamentally one of the most important pieces to the entrepreneurial puzzle?

The best way to understand culture is by observing how people behave. It's very easy to talk about the values you aspirationally want to uphold as ideals, and it's very easy to pay lip service to culture, but often you'll observe a discrepancy between what people say they will do, and what they actually do — a discrepancy between the values you espouse and the values you practice. Culture is what you do in practice, not what you aspire to do in theory.

It's hard to pinpoint exactly what culture looks like at any given organization but it can be gauged by observing:

  • what kinds of behavior are rewarded and punished

  • how people are actually spending their time, attention, and resources

  • which rules are enforced, and which are ignored?

  • what happens when someone fails?

  • how is risk assessed and handled?

  • how are decisions made when management is not in the room?

  • how prevalent is encouragement and how prevalent is shame? how do they manifest respectively?

Culture ultimately is revealed when things are tough, and the espoused values are tested. These kinds of questions can help you discern what exactly is that gap between what values are espoused and what behavior is practiced. Again, it's very easy to state values — whether those be transparency, integrity, commitment to diversity, or whatever you're aspirational saying is important to you — but in practice, what you state doesn't matter. What you do is the only real reflection of what you value and what kind of culture you actually have.

Why does all this matter though? Why do so many focus so intensely on curating a specific kind of culture? The proverbial wisdom is that culture eats strategy for breakfast, which like many aphorisms resides in some truth, but I've come to believe that people spend so much time and attention on culture because when there is a discrepancy between what you say and what you do, people disengage, stop taking it seriously, and ultimately stop caring. Outside the most obvious reason startups fail, which is by running out of money, most startup problems are people problems and people problems generally stem from culture and how some of those questions we just went through are answered.

…Consider how this can manifest in a startup and imagine a hypothetical culture…

To me, the best kind of culture is one that facilitates and promotes both vulnerability and accountability, where people feel comfortable talking about risks and surfacing things that are not going well, where leadership sets the vision and communicates to people so clearly their worth and value that they feel inspired to achieve and realize their own potential.

What happens when the gap between espoused and practiced values grows? When culture breaks down? When the opposite becomes true where you instead create an environment where people question their self-worth and competency? What happens you vitriol is normalized? What happens when you care more about being right than understanding what is reality?

What you may start to observe in that environment, as you make your way through those prompting cultural questions, is that success is not celebrated, failure is punished, mistakes are lambasted, risks cease to be effectively escalated, and ultimately, a self-reinforcing downward spiral where now from a place of fear or disinterest rather than of inspiration, people optimize their time for avoiding mistakes rather than achieving excellence and doing the best job, which actually requires making mistakes.

At a company level, it kills an organization's tolerance for risk, and risk aversion fundamentally kills innovation. At an individual level, people will check out and it becomes a prescription for employee attrition.

You'd find yourself with a pernicious culture — it is the exact kind of fatal scenario you want to avoid and its why culture matters

The best of leadership and cultural tenets stem from the lessons you learned in kindergarten.

Culture doesn't have to be complicated — most kindergarten lessons are pretty simple. But that doesn't mean it’s easy, especially because culture isn't a static thing. Culture is dynamic and present. Intentionally maintaining a culture requires diligence and attention, and care! If something feels off-culture, and it's not addressed, that becomes the new culture that you now have to reconcile with.

A company's most valuable asset is its people, one of the many trite but true things.

Business is just people, and culture’s importance follows from that.


Other: https://share.transistor.fm/s/701e5b4b

h/t Brene Brown