Should You Hire for Cultural Fit in Startups?
The realization that culture is critical to your company’s success is nothing new. In 2002, James Baron and Michael Hannan published the results of the eight-year study of startup cultures called “Organizational Blueprints for Success in High-Tech Start-Ups: Lessons from the Stanford Project on Emerging Companies”.
The authors studied over 200 startups. The results of their study indicate that a startup’s culture has a massive impact on the probability of success. In fact, the culture choice of the company’s founders likely has the most impact on a company’s chances of success. There are five types of culture that are prevalent in startups. They are:
1. Star: “We recruit only top talent, pay them top wages, and give them the resources and autonomy they need to do their job.”
2. Commitment: “I wanted to build the kind of company where people would only leave when they retire.”
3. Bureaucracy: “We make sure things are documented, have job descriptions for people, project descriptions, and pretty rigorous project management techniques.”
4. Engineering: “We were very committed. It was a skunk-works mentality and the binding energy was very high.”
5. Autocracy: “You work, you get paid.”
The result of their study showed that, for start-ups, the Commitment culture is your best chance of success (see below):
When selecting candidates to work for your startup, you should consider how they would do in your culture. For startups, hiring for cultural assimilation is more important than for companies that are already established. The reason is that, even though there is compelling evidence that diversity is good, in startups with small teams, the need to keep things running fluidly requires a team that thinks and acts alike. When the company gets past the startup phase, then it makes more sense to hire a diverse workforce, as studies have shown that diversity of thought, diversity of experience and broader representation is beneficial, and candidates should be evaluated for how they add to the culture rather than evaluated for how they fit the culture.