Lessons from Startup Culture Meetup

The great thing about startups and their leaders is a restless drive for improvement. I rarely meet people who see possibility and want to realize it with their energy or persistence.

Ongoing invention was the theme of Startup Culture Meetup last night by sponsored by KulturEnvy and Swissnex. I felt a profound hopefulness for organizations and leadership in general listening to Greg Kunkel, SVP & Co-founder at NextJump, James Psota, CTO & Co-founder at Panjiva, and Jason Henrichs, COO & Co-founder at PerkStreet Financial.Grow your own culture

‘Evolutionary pressure’ is good

Here’s an example of that restlessness. In conversation with Greg Kunkel, he described how startup and growing companies never free like they have enough people. What that means when someone leaves is that the team’s first thought is to replace that guy. But Kunkel asks, “Are you sure? You have the chance to change the way you do things, find efficiencies, maybe automate some part of the work, or pare back on what’s not critical. Be really sure there isn’t a better way to organize. Then we’ll find a replacement.”

You could choose to hear that as, “We’re not supporting team leaders. Do more with less.” But what he was communicating was his company’s way of thinking: don’t assume anything, take a close look at how conditions have changed and take advantage of them, adapt to thrive. Maybe he should call it the evolutionary pressure of small.

Invest in culture early

Henrichs summed up the lesson of the evening: “When you start, you don’t have time or money. Looking back, I wish we’d invested in culture more earlier.” Most of the advice that the three offered describe habits and initiatives that were cheap, too.

Psoto and Henrichs both talked about their decision to define mission, vision, and values – the seeds of culture – as part of their strategic plan. They spend time with every employee to communicate it. They take regular retreats. They also talked about how, over time, simplifying that vision and the expression of those values helped everyone clarify what’s important and recognize ways to bring them to life.

In fact, Kunkel talked about how they borrowed a method from an outstanding Manhattan preschool. NextJump now holds a twice monthly reflection time that asks, “What did we do? What will to do more of? What do we want to try in the next two weeks to make that work better?” That’s reflective practice. This bunch is well on their way to the goal of self leadership: to notice yourself in action, rather than afterward, and modify as you go: reflection in action.

Other ideas for action

Recruiting and selection: Psoto aptly said that the challenge of startups is primarily an emotional challenge, so be sure to interview for emotional intelligence and people’s ability to manage themselves under pressure. As a corallary, there are few processes and too few people. So much of the work is about making something new, under great uncertainty, all while under pressure. That requires people who can do the work, take responsibility, and create ad hoc process that fits the situation and toss them when facing a novel situation.

Performance: Kunkel and NextJump incorporated contribution to culture into the performance evaluation and review process as a measure comparable to contribution to revenue. He said, “That got people’s attention.” It’s not about being nice to each other, “it’s about everybody taking responsibility for creating the culture.”

Foster independent operators: Henrichs said, “We overinvest in communication and depend on peer to peer leadership.” He also described the way he communicates responsibility: leadership by staring. When people ask him whether they should do something, he just stares. He should have gotten a bigger laugh here. “What people come to understand,” he said, “Is that you don’t need my permission. What I’m not saying is, ‘Just go do it.'”

Maybe the most important factor of fostering independent operators is the effort these leader put into creating the mental models and principles for action. They place a premium on transparency, err on the side of distributing responsibility, are open to reviewing what’s not working and getting feedback themselves, and they engage in candid discussion about how well this deal or that feature conformed to company values. Taken together, these experience create ways of thinking that allow people to act in alignment with the vision and with those who share it. That takes real generosity in leaders. In fact, Henrichs describe how he didn’t even know that the team had rolled out a mobile app. And he was thrilled.

Kunkel said that when I comes to managing, “You can’t get people to do what you want.” Brilliant and true. “So how can I get them to do what they want that’s also what we want.” Given their commitment to creating culture that allows people to thrive and make a difference, these leaders recognize that you need an organization that can free them for a bigger, meaningful, creative act every day.

Values in action ARE the values. Ask Greg Smith

If you lead anybody or anything, and you think you know Greg Smith’s story, think again.  It’s a story about learning that could be worth $2.2 billion.

Greg Smith is another example of people who are telling leaders that their personal values are not that malleable.  Among the easy scapegoats for this cultural trend is one or another generational demographic:  Gen Y, millennials, whoever’s next.  But that’s too simplistic.  Forty-somethings and fifty-somethings are changing what they want from work, too.

What's that mean, anyway?
What is that value, really?

Smith is the guy who’s leaving your department to go to graduate school in an unrelated field, a high performer whose work has fallen off, the guy who is leaving to each English in China, and the woman who just left to start a bakery.  (Incidentally, the last example? That’s my wife.)  They tried to influence the conditions at work.  But they’re swimming against the tide and they can’t bear the cognitive dissonance any more.

What Smith said was that the Goldman culture he knew and joined had “revolved round teamwork, integrity, a spirit of humility, and always doing right by our clients.”  He no longer saw those values in evidence.

Few companies can pay their employees enough to take the issue of values off the table.  If any can, it would be an investment bank.  But Smith said he “can no longer in good conscience say that I identify with what [the bank] stands for.”  Remember your Maslow: If you can eat and provide for your family, soon after issues of identity become the highest priority.

Leading means examining values that create value

The most important lesson for leaders is that values in practice need to be held up to scrutiny.

  • Are we the organization we say we are?
  • Is our private conversation a reflection of our public proclamations?
  • The last three things we did, how are they examples of who we are?
  • What values did this quarter’s work reflect?

This kind of continuous organizational learning gives everyone the chance to influence and reinforce the values that matter.  Everyone learns what values look like in action, even when they’re not all part of the mission statement, even when the organization falls a little short.  The kind of cognitive dissonance and isolation that Greg Smith felt won’t fester unattended until a departure from your company takes over the national news cycle for a week or so.

If you’re sure you don’t need to worry about Op-Ed pieces appearing in the New York Times, think about the unsolicited, unvarnished reports on Glassdoor.  How much could you save by discussing the values in action where you work or lead?

How we used it: Climate

You are reading a previously unpublished entry written August 11, 2010.

The Boss buys the climate idea

November 2009:  At the heart of “the climate idea” is notion that climate dimensions are a model for managing and leading.  So they offer a method for and measuring managers performance.  The problem the Boss faced is that after repeated invitations to change, fervent exhortations to change, and even some modest efforts to demonstrate that performance matters to you and your job, very little had changed.  What the Boss saw in organizational climate was a way to establish measures and hold people accountable for performance.  One way of looking at the state of affairs is that people were not changing because they were not carrying out, and not being held accountable for carrying out, day-to-day management and leadership responsibilities.

I learned about this idea from my pal and mentor Mike Maginn.  Without his sage advice, we might have taken a more piecemeal approach to looking for Archimedes’ lever.

Senior leaders learn about the idea

April 2010 The Boss and I gingerly introduced the climate idea to the senior management team.  We began the discussion with them where we began that discussion with Mike and among ourselves.  In August 2009, a survey of staff to identify issues of readiness to change delivered a load of complaints and frustration about management and leadership.  It hung in the air, and from where I sat, went on stinking up the place.  Few saw the messages in it as urgent pleas or indictments.  The main messages were that leadership doesn’t lead, leaders don’t communicate, and too much is expected of us.  If you know your climate dimensions, you’ll hear feedback about standards, structure/clarity, and perhaps, recognition.

The senior leaders read our text and in a group meeting, completed my version of the Rohrschak test:  What do you think our climate profile looks like? Interestingly, they rated their teams high in structure/clarity and standards and moderately low on the others, with responsibility being the lowest.  They envisioned that Teamwork and Commitment would be higher.  Weeks of discussions followed, all of which amounted to natural reactions to getting used to the idea.  Just as we planned to T-boned by the need to develop a plan for other efforts.  The projects that flow out of that plan promise to define much of our work for two years or more.  With the day to day work, they are our lab for using climate to focus action, especially by leaders and managers.  By the time we returned to climate in June, senior managers found little to object to and much to hope for in using climate to frame how we manage work and people.