Ideas on Human Flourishing

Defining Startup Values is a Double-Edged Sword

When I started my latest venture, I knew I wanted to create a values-driven startup, but wondered “How can articulated values avoid feeling lifeless or patronizing?”

Values are the assumptions that drive thinking and action, and the character and behavioral aspirations leadership believes will serve the company’s mission.

Every company has values.  Are they explicit or implicit?  Are they serving the mission and team or not?  In my experience a startup’s relationship to its values usually falls into one of the following groups:

1) Lip service:  There is almost no relationship between what is written on company badges or conference room walls and the common assumptions and every day behaviors of team members.  Sometimes the disconnect is the result of an aspirational few without trying to steer the culture.  This was certainly the case at one of the companies I helped start.  During the interview process, talented mobile developers who had their pick among startups told me our company was their top choice because of our values.  Those same values were distasteful a few months later when these newly recruited team members realized they weren’t shared by all of the company’s leaders.

2) Verbally unexpressed, but tangible nonetheless:  Here values are expressed through who gets hired, fired, promoted, and what initiatives are funded and and celebrated.  This approach is way better than lip service, but hard for potential team members to self-select on and new team members to assimilate into.  Another company I helped start fell into this bucket.  New team members who had been at the company for a few months knew they were expected to make the sale, have fun, and do right. Sadly, these values were not explicated, and this lack of definition left the values with little staying power after most of the founders left.  After 11 years the trust and reciprocity that catapulted the company to success in its early years had eroded to nil.

3) Intentionally expressed in more than words:  This is hard in practice.  It takes deep consciousness on the part of leaders to give the defined values gravitas.  Aligning strategy, decisions, and metrics with values requires additional time and emotional energy.  It also opens the company up to both constructive and unfounded criticism.

Attending to values is a distraction if you intend to flip the company in 12 months.  However, if you strive to build an enduring company, there are few tools more powerful than values intentionally expressed and regularly enforced.  Here are some of the reasons our team at my latest startup is working hard to live our values:

Authentic and defined values foster alignment and well-being:  

  • Potential team members and partners (e.g. investors) can self-select
  • Enhanced clarity empowers team members to create with confidence
  • Efficient conflict-resolution tool
  • Potential for culture-brand-product alignment
  • Certain values promote flourishing (e.g. Douglas North won a Nobel prize for proving how values influence standards of living, one dimension of flourishing)

In a future posts I’ll share how I discovered my own values, and how my current team is trying to lean into our values with authenticity and consciousness.

  • http://www.junkyardwisdom.com/ Roy

    Love this, Kevon.  But I’d challenge you to also think about the downside of being values driven in a startup.  I’m not talking about the simplistic “because it detracts from the bottom line” because that’s a false paradigm.  Instead, I’m referring to the more nuanced challenges, such as the time it takes to reflect on each decision through a value based grid.  The emotional energy it takes on some decisions and strategies.  It even places us in a glass house, so to speak, and opens us up for false criticism.  I strongly feel a values driven mode is the only way to go … but I think it is helpful to also know the price we pay for those values.

    • Anonymous

      Roy, thanks for your feedback! I’ve revised my post to bring the downside into sharper view.

  • http://blog.foundersnetwork.com founders network

    Thanks for sharing your thoughts and experience RE Startup Values.  We do this with Founders Network and it works.  Starting with clearly defined values enables you to intentionally align with the people who share them e.g. investors, cofounders/employees, partners and customers; which not only reinforces the values but also leads to stronger, more durable relationships among all parties.  I see this as just one more tool for being clear on what your intend to create and how you expect people to behave.

  • Zephyr

    I’d like to add a bit to group 3: “intentionally express in more than words.”  As Kevon stated, it can be hard for a corporation to stay true to clearly defined values in the decision making of a company.  This becomes particularly challenging when the a company’s ultimate goal is maximizing profits for its shareholders.  Fortunately, there are some new alternatives to this creedo for certain types of companies, particularly if it’s values relate to how the company interacts with the external world.  California now allows for a company to incorporate as a flexible purpose corporation or a benefit corporation. These corporate structures will have greater flexibility to combine
    profitability with a broader social or environmental purpose. 
    Entrepreneurs and investors will have the opportunity to organize a
    company to pursue both economic and social objectives, allowing entrepreneurs and investors to have multiple or blended objectives. 

    Flexible purpose corporations can pursue social objective/values
    without liability to directors for not maximixing profit.  A flexible purpose corporation may be formed for special purposes, including, but are not limited to,
    charitable and public purpose activities that could be carried out by a
    nonprofit.  These objectives or values can be as simple as encouraging the company to have an office near a park so employees can walk their dogs. Or they can define the corporations core values such as requiring that the company’s supply chain to adhere to specific employment and environmental standards.

    I recently incorporated a flexible purpose corporation with the purpose of improving the quality of life for all people in the world through accessible, affordable and environmentally conscious solar products.  The Board and officers can now use integrate these values into its decision making process.  Because this corporate structure is so new I’m looking forward to seeing it in practice. I’m also interested to see the investors react to companies using this corporate structure. 

    • Anonymous

      Zephyr, thanks for sharing the importance of organization form in pursuing objectives beyond profits. In case anyone whats to learn more, what law firm are you with?

      • Zephyr

         No problem. This topic is very interesting and I am so glad that influential people, such as yourself, are having these important conversations.  I am currently a sole practitioner working with startups on business and IP related issues. Feel free to to shoot me a email any time. zephyr(at)gmail.com

  • HennieS

    Well said Kevon.  

  • http://twitter.com/brandpreneur Andrea Shillington

    A values driven startup, that’s what I’m talking about!