How to Build a Great Company Culture

My Say, Advice and insight from the frontlines of entrepreneurship.

Opinions expressed by Forbes Contributors are their own.

The following guest post is by Todd McKinnon, CEO of Okta.

Every Silicon Valley executive has an opinion about what company culture means and
why it’s important, myself included. But it’s premature to focus on building a world-class
culture before a world-class product. In the beginning, all that matters (or should matter)
is building something great and lasting. Only then, as your company grows, can culture
exert its powerful effect on people by steering them to act or to behave in a certain way
when the path is otherwise unclear.

When headcount is in single digits, founders, CEOs and first employees sit and talk
through every decision together. The problems are simpler, the communication more
direct – and there’s less ambiguity about what’s important and how to act. Your culture
is implicit in the personalities and values of this early group. That was certainly my
experience with Okta, the startup I founded in 2009 to help businesses and their IT
departments contend with big changes that were affecting ‘business as usual.’

And then it happened. I woke up and no longer knew the name or role of every person
whom I passed in the office. At 100+ talented and driven employees, it wasn’t always
clear how to act, how to communicate and how to prioritize in a fast and dynamic
environment. The level of context shared at 10 employees just was not there at 100.

When Culture Really Starts to Matter

It was time to think about what sort of company we wanted and how we would get there.
It wasn’t enough just to ‘let it happen’ on its own. Just like we’d maniacally built the
product, we needed to do the same with culture.

Of course, this inflection point is different for every fast-growing company, but the good
ones all get there eventually. As you grow, it becomes harder to communicate
everything, to get consensus on every decision or to create a process and procedure for
everything. A strong and clear culture can give everyone the proper framework to work
within.

Here are six lessons we’ve learned along the way:

Assign An Owner: It sounds simple, but companies need someone who is directly
responsible for culture. Of course, that person can’t do it on their own, but deputize
someone to focus on culture and push everyone else in the right direction – whether
they’re hiring candidates or managing the engineering team as it sets priorities.

Leadership Sets Tone: Culture is shaped mostly by how your leaders act, so make
sure your leadership team embodies the type of company you want to be. Is a
‘teamwork culture’ the ideal? You’d better make sure your executive team truly works as
a team. Is ‘transparency’ most important? Guess what, your leaders better be
transparent — even when it’s difficult. My alma mater salesforce.com and its leader,
Marc Benioff, are famous for valuing customer success above all else. If you were a
leader at salesforce.com and didn’t put customer success front and center, you were
quickly shown the door. No excuses or questions asked.

Structure Says Everything: Organizational structure drives culture. Apple famously

elevated the design group in the organization by having them report directly to the CEO.
If you take pride in being a product and engineering-driven company, but those teams
are buried in the hierarchy and under a marketing leader, I’d question how much you
value product.

Not Just Kumbaya and Trust Falls: Hold an offsite. Seriously. On the surface, it may
seem like a waste of time to executives being pulled in 50 different directions
simultaneously, but it’s important. Get employees who you think exemplify the culture
you want to build and ask them some simple questions: What do you like about the
current culture? What don’t you like? What is culture, anyway? Does it even matter?

Understand that culture doesn’t have to be neatly wrapped up at the end. Questions will
go unanswered. There will be disagreement. You won’t define culture by the end of the
offsite, but you will know where you’re headed, why and how to get there.

Prioritize and Focus: Sure, every leader has the utopian vision of running a company
where everyone’s happy, has fun, loves their coworkers, brings their dogs to the office
and specialize at marketing, design, engineering and sales. Don’t fall victim to the cult of
the ‘rock star,’ a popular trap in Silicon Valley. Give me five people who work together
as a team, as opposed to the one person who’s talented at everything. They’re not, and
it’s not worth the trouble.

Decide what will really move the needle for your product and customers, and act as a
team. And don’t be afraid to disagree with your customers. They don’t always know
what they need, and their requests might not be in your company’s (or your product’s)
best interest.

Communicate. Always: Communicate your values and culture explicitly and

continuously, both internally and externally. Employees must understand your culture,
and why it’s important. Reward employees who advance your culture, and be open and
honest with those who don’t.

Do this always and in tandem with every other culture initiative, or your culture will be
merely hollow words on a mission statement. Done well, however, and the culture will
bleed into employees who will spread your culture, whatever it may be.

As your company grows, culture will help keep it on track, steer hiring decisions for the
people who will maintain that success and safeguard your company from spiraling into
something you don’t recognize—even if you no longer know everybody’s name.