The culture that a company embraces can say a lot about the eventual success of a company. In a study performed by sociologists James Barron and Michael Hannan, they tracked the culture of 167 Silicon Valley startups over an extended period of time. The study identified five primary cultures embraced by most startups.
This model was the most common model for product based companies like those found in Silicon Valley. These companies focused on hiring employees to fill specific skills. They are well equipped to scale quickly, but overall, they had a mixed success rate.
Rock Star Model
As the name implies, these companies hired the best and the brightest. What the researchers found was that there were often egos involved and there were situations of bad blood that killed the entity. While these companies proved to have the most spectacular success stories, they also had the most spectacular fails. Venture capitalists tend to gravitate to rock star model companies based on their star power.
This type of company leaves little to chance. Standard Operating Procedures (SOP) and Employee Handbooks define repeatable processes. Processes are measured and improved upon and the worker is mostly left with little autonomy. Franchises fall into this category.
This type of company is like a dictatorship and lives and dies based on the founder. Here employees do what the boss says and no one questions the boss out of fear of being fired. When Steve Jobs was at the helm of Apple computer it an example of a company that embraced an autocratic model.
This type of company was the 3rd most popular business culture in the study and was highly committed to the employee. Once hired, the employees felt safe and layoffs were virtually nonexistent. These entities were slow to hire new staff and once hired were slow to fire. Emphasis was on the employee. Of all the companies in the study that employed the commitment model, none failed. Therefore, as an entrepreneur who often gets just one shot at success, the commitment model is your best chance of success.
If there is one weak point with the commitment model, it is that it tends to attract people of like viewpoints. Sometimes a lack of decanting opinions can hamstring commitment model companies.
Does your corporate culture embrace the values of the commitment model?
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