Advice For Founders: Stop Running Your Startup “Like A Family”

Before joining the amazing company I work for now, I spent several years doing marketing consulting for various stage B2B startups. As a result, I’ve been granted insights into many different startup cultures ranging from the excellent to the mediocre to the occasionally crappy.

Even if you sell the most incredible product in the world, if your workplace culture isn’t great, you’re not doing it right. Since recently (finally) reading The Hard Thing About Hard Things by Ben Horowitz, I really agree with his perspective that a great company culture is essential.

To make your company culture great, your most important values must be lived by you and your team. After all, company mission statements are only as strong as how well they’re operationalized.

On this topic, I’ve noticed an unfortunate trend where well-meaning founders make the mistake of deciding to solve the “values/culture thing” by declaring that their startup is going to run “like a family,” especially during early stages. Here’s some thoughts on why “running your company like a family” is a really bad idea.

Saying you run your company “like a family” is extremely vague, and by doing this, you may create confusion among your team.

More often than not, when a CEO says to her team that she wants to run the company “like a family,” what she really means is that she wants to run the company according to her definition of how a family runs. After all, no two families are alike. How Jack the CEO’s family operates may be vastly different than how Jane the VP of Sales’ family functions. This leads to terrible and avoidable miscommunications.

Let’s say Jack the CEO calls his executives into a meeting and tells them that the company will now run “like a family” and that he expects leaders and their teams to act accordingly.

What if in Jack the CEO’s family, it’s common to call people out on their mistakes in public settings. After all, a little public shame is how people learn to correct their mistakes, right? So, without explicitly verbalizing any of these assumptions about what family means, Jack expects that when telling his executives to “run their teams like a family,” they’ll align with his understandings.

When Jane the VP of Sales heard Jack’s speech about “family,” she would have likely unconsciously applied it to her own understanding of family. Jane’s family does not behave like Jack’s family. Jane’s family only delivered criticism in private. People are praised in public, and given constructive criticism in private. Period.

When Jack the CEO sits in on Jane’s meeting with her Sales Development Reps (SDRs), one of the SDRs, Carl, reveals that he’s very behind on his numbers for the quarter. To Jack’s surprise, instead of tearing into him in front of the other SDRs, Jane centers the discussion around best practices and what everyone can work on as a team to improve processes. Jane plans to address Carl’s individual issues with him after the meeting in private and to review his performance improvement plan then. But Jack butts in, “Carl, why is everyone else outperforming you? Do you take this job seriously?” Jane goes beet red and after the meeting feels unsettled and confused. Why would Jack  undermine her authority in front of her team, and why he would blatantly go against their stated values? After all, wasn’t this company supposed to run like a family?

This is a pretty simplistic example, but you get the point. If you think a family should behave a certain way, chances are someone else disagrees. So don’t run your company “like a family”. State your explicit values instead.

Your experience of family is inherently subjective, but you likely won’t see it that way—and unchecked subjectivities are a big problem.

Perhaps in your family everyone was supportive, so you think running a company like a family means supporting each other. Great. But what if being supportive in your family also meant that while men in the family worked, women were expected to work only until they had children and then stay at home? So when your VP of Product comes to you announcing she’s going on maternity leave, will you treat her “like family”?

Some families are toxic, and you may unwittingly turn your company culture toxic if you run it like your family.

This is a point I’ve been intimating along the way in this post, but a lot of families are, simply put, dysfunctional and toxic. Maybe in your family you “just don’t talk about” the alcoholic gambling father in the family, so when the CEO’s personal problems start affecting his performance, or he does something unethical, it’s understood no one is to confront it lest they be breaking the family code. After all, you’re family! This is a really big problem and it’s surprisingly common in companies that run this way.

You can’t easily fire or lay off your family.

As Ben Horowitz shares in his book, as CEO or leader, you’re going to have to lay off people, many of whom are really, really great but who just aren’t the right fit anymore or because you personally failed them in some way. Depending on what stage you’re at in your company, it’s not a question of if this will happen—it’s a question of when. And running “like a family” will make it much harder for you and your executives to do this. Because it’s really hard to lay off “family”. Startups aren’t, and can’t be, families.

Better Alternatives Exist

On the surface, running your company like a family sounds like a nice, cozy idea. Family can be a source of a lot of joy and community for many people. But I’d argue that even if every single one of your employees right now consists of your actual family members, still don’t run it “like a family”! Instead, create company values that are specific and actionable. Some examples from leading companies:

  • Talk straight. (ServiceRocket)
  • Results first, substance over flash. (Rackspace)
  • Focus on the user and all else will follow. (Google)
  • Deliver WOW Through Service (Zappos)
  • Respect for the Individual (Accenture)
  • Move fast and break things. (Facebook)
  • Take work but not ourselves seriously. (Kappost)
  • Feel Free (Twitter)

Note that these values have nothing to do with “family” but may overlap with how some families operate.

Final Thoughts

I implore you, startup leaders: stop running your companies like a family. If you have that written somewhere in your mission statement or on your website, take it out right now–or at least be very specific about how you as a company actually define operating like a family. Instead, think about all of the good things you see in family and write those down as values that your company should embody.

Special thanks to Daniel Nelson, Founder of Food On A Truck, for his feedback in an early draft.

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