The same goes here at EQT Ventures. We’ve been doing a lot of thinking and introspection about company culture. Like many of our founders, we’re feeling the pressure of growing a company in the midst of a pandemic, and one that’s totally remote and spread across six cities and multiple time zones.
Along the way, we got a lot of stuff wrong and learned many things. One of the things we did right was spending the first part of the Covid-19 lockdowns focusing on talking through, agreeing, and writing down our own very specific principles that govern how we work, communicate, make decisions, and our wider mission. We’re investing not just to make money but to make a positive change in society. We also re-established the type of people we want to work with — colleagues, founders and even LPs — and put frameworks in place for our decision-making.
One of the things we got wrong was underestimating just how difficult it can be for small teams to work together when they can’t be together, and the importance of relationships and real-life contact on team dynamics. In the early days of lockdowns, everyone was incredibly productive, enjoying not having to commute and spending more time with family. As time wore on, the historical relationship “memory” and trust started to wear off and the lack of real-life, personal connections started to have a bigger impact, especially as we onboarded new team members who’d never met anyone face-to-face. This is even harder when you throw in an intense working environment and time zones that make synchronous overlap hard. And we definitely disconnected as a team because of it.
Still, we’ve learned key lessons, made a series of moves that accelerate things we’ve wanted to do for a while but haven’t had the courage to do until now, and will be all the better for it in the long run. We mirror our founders and their companies in so many ways in that we’ve accelerated perhaps six years of change in just six months. Our changes were a culture transformation, rather than a digital one.
Culture as a Strategic Business Pillar
A good company culture can often seem difficult to describe; it’s an intangible asset, which every business desires, yet few can confidently pin down what it means. It’s the behaviours and attitudes of companies and the employees that power them. It encompasses decision making, leadership and communication style as well as ethics and values, and should be woven into the very fabric of an organisation.
In my early startup days as a founder, I wrongly thought culture meant how we had fun — the table football, free beers, and a flat management structure. But it’s not. Culture is everything about how we work together. As a result, founders need to consider culture as a strategic business pillar, which is why it’s important to get it right from day one. Setting the correct tone isn’t something that can be bolted on at a later date when the company is scaling beyond the original team. It should run seamlessly through the business, reflected in the way it operates. Every decision a business makes should have people at its core.
What’s totally clear is that company culture can make or break a team at the best of times, with modern workplaces in constant transition long before the clutches of coronavirus set in, divided by location and mobility. Add a global pandemic into the mix and the importance of getting it right should become non-negotiable for founders.
Without a clearly defined ethos that can withstand the tests of working remotely alongside the challenges of this new business environment, a business won’t succeed, even if the ideas are innovative and cash is readily available. Ultimately, a company is only as good as its values.
Adapting to Covid-19
As we have taken to remote working, the strength of a business’s culture has been thrust into the limelight and tested by Covid-19. Questions have been asked: is it strong enough to withstand remote work? How does culture function without physically working closely together? To enhance team bonding whilst teams work remotely, startups and scaleups have been using video conferencing software to their advantage, hosting virtual quiz nights and after-work drinks. This has helped teams maintain a sense of community, despite their physical distance.
But it’s not all about perks. Trust has become an even more important aspect of culture in the workplace, as without the close connectivity of the office. Managers can’t have eyes on what everyone is doing. It’s critical for founders to trust that their teams are getting the work done and to avoid micromanaging. It’s overbearing to constantly check in and creates a feeling of resentment and distrust, neither of which are conducive to fostering a positive company culture. Trust and cohesive decision-making — driven by strong communication, transparency, data, and a common framework for decision-making — is at the core of every successful culture.
The best entrepreneurs think big and bring culture with them, no matter the market nor the working environment. Right now, the limits of any organisation’s culture are being tested. It’s clear that having a structure of shared values and practices in place is key to not only surviving but thriving in this crisis. Employees that fully understand and share a company’s mission tend to perform better, bolstered by increased confidence and proactivity, while feeling more stable — no matter where they work. And we’ve all learned hard lessons around this.
As an entrepreneur-turned-VC, I can say with certainty that those who invest in company culture will be the ones who build truly great businesses that shine during this crisis and beyond. Now, more than ever, culture is everything.