Can start-ups establish the optimal Organizational culture as they scale up Culture Insights – Edition one

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The first edition of Culture Insights, the all-new video podcast from Hofstede Insights India addressed a challenge many start-ups are confronted with. Culture Insights will explore evolving trends and the multiple facets of Organizational Culture. The first edition featured Akhilesh Mandal (Managing Director India, Hofstede Insights) in conversation with Manu Parpia (Business Consultant / Former CEO & Founder – Geometric Ltd). Manu is a veteran industry leader who has founded several organisations and handheld them from start-up to growth phase. The ideal person to talk about the significance of organizational culture in start-ups and more importantly how they arrive at an optimal organizational culture as they scale up. Even before we bring you the excerpts from this insightful tete-a-tete, let’s define Organizational culture first.

Are you looking for consultation on the perfect Organizational Culture for your company?

What is organizational culture

Organizational culture is the way in which people in an organization relate to each other, their work and the outside world, in comparison with other organizations. Your Organizational Culture shows how your organization works: how to things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams. Organizational Culture is what differentiates your business, so it is important to know the various factors that contribute to your company’s culture.

“Organizational culture doesn’t just the tone but also defines transparency of an
organization”

Manu reminisces of a time when start-ups didn’t have the benefit of analytics. It was the good old ‘gut feel’. Organizational Culture sets the tone for decisions to be made and for people to understand what is acceptable and what is not. For example, if you have a performance-based culture – you are promoted when you perform and you’re out if you don’t, that defines the kind of talent you attract. The tone you set is important. It’s not just the tone but it’s also transparency. Does an organization share data down the line or is it restricted only to the top management. Manu believes that culture and values are closely interlinked.

Is there a point where you say this is the culture we want to build or it just happens.
Does the promoter’s shadow or values define that culture?

The discussion progressed towards how culture is built especially at a time when many start-ups are more focused on existential challenges and keeping their heads above the water. Akhilesh spoke about the Hofstede view that the best culture is when the team works while the leadership is not around. “Once you’ve set the culture, things just happen; you don’t need to intervene”. Manu concurs – “Culture is an enabler. It frees you to do other things”

organizational culture

Do cultural elements change from a start-up phase to a scale-up mode?

The Hofstede view is that Culture is contextual. It is determined by what stage the organization is at, what is the environment your organization is embedded in, and the pole star of your business and the strategic intent. This brings us to a key question: do cultural elements change from a start-up phase to a scale up mode?

Manu believes that at many times they do, albeit subtly. It’s why leaders need to change sometimes. A leader may be good in the start-up phase but may not be an ideal candidate to take over the organization in scale-up mode. The excitement of a start-up is difficult to maintain as you expand. Things that made you successful as a start-up may not make you successful as you expand. Processes become more important as you scale up. You do build processes as you start. Manu remembers a time when he thought titles were not important but gradually learnt that they do matter to employees and their external support systems.

As you expand you have to build structure. This structure affects culture. External stakeholders like shareholders also impact culture. It’s difficult to maintain the speed of decision making. initiative and the desire for initiative as more processes are added. Manu believes that the best solution is to remove irrelevant processes. Simple example, should the boss approve your leave? If you’re surprised by the leave application of your subordinate, it shows you’re not in touch with your staff.

How do you find the blend of the entrepreneurial spirit with the processes that takes
care of scale?

Manu remembers a time when he had to step back and make for a CEO in one of the start-ups he helped establish. That CEO took the company to great heights but it still needed Manu’s entrepreneurial streak in the initial phase before the CEO stepped in. The trick is to step back, most entrepreneurs find it difficult to let go or take a backseat when their usefulness is exhausted. But it has to be done to help the start-up achieve scale.

Reach out to us to discuss the challenges faced by your organization. We can help you build an optimal Organizational culture.

Is there a good or bad culture and can a culture be copied?

Hofstede Insights doesn’t believe  in a good or bad culture. Culture should serve as an enabling component to the business strategy. Your strategic intent is the anchor, culture should be built to achieve this intent. That brings us to the question – does every organisation need to building their own nuanced culture? Manu reiterates that a “Culture cannot be copied but can be emulated” You can learn from other people.  Make your own blend that is suitable for your organization and your context.

Stay tuned for the next edition of Culture Insights.


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