Building company culture from the ground up

In September 2021 Hadrian consisted of 7 people who could easily communicate via Slack. Sitting in the Amsterdam offices on the company Culture Day in February 2022, the company is almost 50 people. In breakout rooms on Google Meets mixed groups of developers, hackers, sales and marketing team members discuss the company values.

There are jokes about whether or not someone should be named Chief Humor Officer, and debates over whether private or public slack channels better support Openness. Culture days are key to maintaining the employee-led culture important to a successful start-up. However, as start-ups scale, building a strong employee-led culture can be hard to maintain.

Approaching how to establish a company culture in a startup is different than in a large corporation. Building company culture in a startup requires creating not only values but also a strategy for culture development.

Employee-led cultures have been shown to increase positivity, well-being and thus productivity in the workplace. Forbes writes that having discussions about values can help company cultures feel more authentic and encourage individuals to put values into practice. When employees are committed employee retention increases.

By creating an environment where individuals feel like they are heard and valued, companies increase engagement and job satisfaction. Improved employee engagement in turn increases productivity. The Queens School of Business and the Gallup Organization found that disengaged workers had 37% higher absenteeism and 60% more errors and defects.

Employee-led culture can be helpful to developing startup culture values, where rapid growth means values and strategic direction are fluid. Sofia Verkhoturova, Chief of Staff at Hadrian, emphasizes this point: “The nature of startups is that change happens quickly and frequently [...], therefore a culture that is imposed from the top-down won’t stick, because it may not resonate with changing team dynamics.”

However, this same fluidity can make employee-led culture hard to maintain while scaling. “To scale culture development you need to be ready to tackle the different challenges that come with different stages of development,” says Verkhotoruva. “There are different obstacles at 30 people, versus 60.”

One of the challenges is creating the dialogue necessary for ensuring employees feel included in developing company values. People working together through dialogue is essential to creating a strong and inclusive company culture. Harvard Business Review offers advice on optimizing the ‘wisdom of crowds’. The wisdom of crowds requires asking many people for their opinions and then combining them to get the best outcomes. A group of people is more likely to get something right than just an individual.

UX/UI Developer Yujie Shan, says discussion at the first Culture Day “deepened [her] understanding of the shared values." Dialogue allowed her to realize subtle cultural aspects that she hadn’t been able to articulate. However, decision makers need to pre-commit to a strategy for combining opinions ahead of time. These strategies ensure a lack of bias in aggregation, and encourage employees to view discussion as constructive.

The importance of strong company culture in a startup becomes even more important as start-ups scale. Creating the right environment for this kind of inclusive discussion can become more difficult. Employees are less likely to know each other directly. In a remote-first company like Hadrian, employees may have never been in the same room.

“When we were 7 people it was very easy for everyone to be on the same page from strategy to operations,” says Verkhotoruva. “Hadrian at 50 people requires us to put more thought into vertical and horizontal information flows.”

Verkhotoruva also describes how company culture can become self-reinforcing. “By championing the value of communication and integrating it into our culture, we encourage our teams to improve their communication with practices that work for them.” Employee-led cultures help to establish long term patterns of inclusion and discussion.

The other challenge Verkhotoruva discusses, is offering just enough guidance that discussion is directed, without overpowering employee voices. “The feedback we gather from our employees fuels the cultural guidance we try to foster,” she says. “At the culture days we prepare a draft of cultural practices and values we’ve observed beforehand. We then rigorously debate them altogether. It’s an invigorating process and you never know what will come out of it at the end.”

Employee-led cultures have clear benefits for increasing employee engagement and creating a positive company culture. “I think that having everyone's opinion involved is indeed important to create a shared culture that helps people relate to each other,” says Shan. While learning to scale this approach to meet a rapidly growing start-up can be difficult it is a worthwhile challenge. By referring to the opinions of employees, start-ups ensure commitment, effective organizational structures and agility.