When a new venture is founded, does the founder create the culture? Much rhetoric from the founders of high-tech firms suggests they do – some even post manuals of the firm culture for others to admire and copy. But coming to think of it, the founders might be influential but still not important in the end. In any firm that scales the founder quickly becomes a small minority, and employees form the culture too.
So, which is it? That is the question answered in research by Yeonsin Ahn and me published in Organization Science. We looked at the cultures of information technology firms listed in Crunchbase and used descriptions of the firms at Glassdoor as data to do a linguistic analysis of their cultures. That way, we could compare the cultures of any firm, and we went on to detect how much the new venture culture was related to the culture of the previous employer of the founder. That’s because founders typically carry along the culture of their employer even when they try to create something new.What did we
discover? New venture cultures, on average, do not show much trace of the
founder creating the culture. The keyword here is “on average” because the
exceptions are very interesting. The first is atypicality. There is a wide
range of organizational cultures also in technology firms, and there is a mix
of more-or-less typical organizational cultures along with more atypical
organizational cultures. Do employees like atypical cultures? That is hard to
tell, but we know from the data that founders could more easily transfer
atypical cultures than typical ones. Most likely this is because atypical
cultures are more distinct, so employees can more easily notice the culture
that the founder is used to and likes, and they can copy it.
Are there
any other interesting effects? Yes, we made one more discovery. In general,
cultures are not necessarily congruent – they contain internal contradictions
that cannot be resolved, but instead lead to compromised or case-by-case
choices. This is true of culture in general, and also of organizational
cultures. We found that congruent cultures transferred more easily, again
indicating that ease of learning the founder’s organizational culture makes the
founder more influential.
So founders
can create organizational cultures under the right conditions. The culture
needs to be atypical enough to be recognized, and congruent enough to be easy
to learn. A simple answer to a complicated question.