This informal CPD article Why Organisational Culture Is Important for Tech Start-ups was provided by The Tesseract Academy, providing executive training in data science, AI and blockchain.
Take two companies that are similar in size, operate in a similar market, and sell similar products or services — even though there are massive resemblances, the experience of dealing with those companies as a customer or supplier will be completely different. The experience of employees will also be different. This is because of organisational culture.
Organisational culture is the values, beliefs and principles of a company and how those values, beliefs and principles define expectations and practices.
Organisational Culture in Tech Start-Ups
Organisational culture is important to the success of any company. However, there needs to be extra focus on it if you are a tech start-up. As a tech start-up, you will have a minimal track record to trade on. You might not have sales, customers or even a product.
There are things you do have, however, including the idea for the company and the character, skills and passion of your founders. You also have your organisational culture. This will help you attract investment, and it will help you recruit the talent you need to drive your company forward.
Yet, it's not just about achieving these milestones. A positive, dedicated and people-focused company culture will also help you get through the tough times and challenges you will need to deal with. Your organisational culture will help you retain the talent you need, as well as motivate your team to push forward in a collective effort to achieve your goals.
The Microsoft Example
The days of Microsoft being a tech start-up are long gone, but this example demonstrates the importance of organisational culture to the success of technology companies. Before Satya Nadella become CEO of Microsoft in 2014, the organisational culture in the company was cutthroat. Departments were at loggerheads with each other, and employees were constantly pressured to prove themselves.
Satya Nadella set about changing this by encouraging employees to improve (rather than prove) themselves in an organisational culture that centred on having a growth mindset. Did it work? If the market value of a company is any indication — yes, it did. Microsoft has grown from a $300 billion company in 2014 to a $2 trillion company now.
Benefits of a Positive Organisational Culture in Tech Start-Ups
Good financial performance isn’t the only benefit of fostering a strong and positive organisational culture. Some of the other important benefits include:
Talent Acquisition and Retention
Finding the right talent for your start-up is often difficult, but it becomes considerably easier if you have a good reputation for having a positive, people-focused organisational culture. In fact, the companies with the best organisational cultures find talent is eager to come to them.
When you get high-quality people, it's important to keep them. This is getting more difficult as it is now the norm for employees to change jobs regularly. A positive organisational culture will ensure that employees feel valued as being a part of what the company is trying to achieve, and they will also feel they are getting opportunities to reach their full potential. This will help you retain the talent that you need.
If your organisational culture is negative, employees will be demotivated, which will hamper productivity. The opposite happens in a company with a positive organisational culture, where collaboration will improve and there will be energy and enthusiasm throughout. This will deliver a massive productivity boost.
More Engaged Workforce
You will also have a more engaged workforce if you have a healthy and positive company culture. This helps both the points above — staff retention and productivity improvements. However, there are additional benefits that come from having a more engaged workforce. This includes greater alignment with business objectives and a more unified effort to achieve goals and deliver on customer expectations.
Having a good company culture will ensure you have a happy workforce that doesn’t feel under stress. This doesn’t mean everyone coasts along with as little effort as possible. Instead, there will be a healthy drive and ambition to push the company forward — just what you need in a tech start-up. This happy workforce will also keep absenteeism rates low, particularly absenteeism that is the result of mental health and stress-related issues.
When employees compete with each other or have an us-or-them approach to completing tasks, teamwork suffers. This is often most obvious when you have one team that achieves its goals at the expense of other parts of the business. In a small tech start-up, this problem can be catastrophic.
A good company culture brings teams and people together and prevents divisions and rivalries from developing. In this type of work environment, teamwork will thrive, so you can get more done, faster and with a higher level of quality.