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bureaucracy-picture-340x240-jpgNOTE:  an edited version of my post on politics in a startup originally appeared on the Harvard Business Review blog on June 9, 2014.

Asking someone about whether they would prefer working for a startup or working for a big company is like asking them what is their favorite flavor of ice cream – you might get a different answer from the same person depending on the day of the month. One thing you can count on, however, is that when someone says they would prefer working for a startup over a big company, a top ten reason for why will usually include the words “office politics.”

There is a naïve and common misconception that there are no politics at startups. People see the open office spaces, the hoodies, the ping pong tables, and the fast-paced, entrepreneurial environments and believe politics couldn’t possibly be a part of the experience. However, whenever there is a group of people working together, whether it is three or 300 or 30,000, there is always going to be some level of politics to navigate. After all, each person has their own egos, personal goals, aspirations and agendas; in order for someone to get what they want, there is going to be a need for compromise, negotiation and politicking. The good news is that usually in smaller companies, particularly startups, this is not much of an issue because you have teams that have their heads down, feverishly working (typically in close quarters) to get the business off the ground, meet deadlines, etc. But unchecked, politics in a startup can quickly become distracting and demoralizing due to the fact that there is a very thin infrastructure in place to absorb it. The result is that politics can create an unnecessary risk that startup leaders cannot afford to ignore.

Interestingly, the warning signs that politics are infiltrating a startup culture are not radically different than what you might see in a big company. Some common ways politics begin to manifest in a startup can be:

  • Misalignment of an employee’s personal motivations and those of the company;
  • Lack of a common vision amongst the key stakeholders (founders, investors, employees);
  • Debate about when to raise outside money or seek an exit;
  • Mismanagement of expectations regarding credit, compensation and/or options for achievement;
  • Founders overvaluing personal loyalty to team members versus the results of the individual;
  • Indecisive strategic leadership; and
  • Lack of trust between leadership and the team.

There are several very simple steps that startup executives can take to keep corporate politics to a minimum and avoid a potential meltdown. First, preferably before the warning signs appear, leadership should make sure everyone on the team explicitly understands that corporate politics are a necessary evil, but political behavior will not be tolerated. This can be done in an employment agreement, during an offsite meeting, as part of a corporate values statement, and/or by simply posting a big sign on a common wall in the workspace. By acknowledging this upfront, executives accomplish a number of things: they break the misconception that there are no politics at startups, educate their employees about how distracting it can be for the team and empower them to call out bad behavior when it occurs, and align everyone’s measurement of success with that of the company.

This may seem like a contradiction on the surface. On one hand management says that politics will not be tolerated, but on the other it acknowledges it will occur.  How does that work?  Internal politics can be likened to speeding and law enforcement’s posting and enforcement of a speed limit. Every road in the country has a posted speed limit that explicitly tells you how fast you are legally allowed to go. However, most people also know that law enforcement usually gives a cushion above the speed limit before it starts pulling people over (usually about six miles per hour (MPH) over the limit) — because if it pulled everyone over for breaking speed laws, they would never be able to do anything else. Even though the speed is posted, it is generally accepted that speeding will occur – to a point. The same is true with internal politics. Executives may clearly communicate what will tolerated, but they acknowledge that political behavior will occur – to a point. If political behaviors become habitual, then more permanent actions may be taken. Like speeding, executives can’t completely regulate politics out of an organization, but overt political behavior does not have to be tolerated as it puts the wellbeing of the company at risk.

Next, startup executives should instill a commitment to transparency, trust and inquiry within the culture. Every person involved needs to believe they are an integral part of the process and future growth of the company, and these three tenants are paramount to instilling this sentiment within a company’s culture. Some simple strategies for executing this are:

  • Hold regular all-hands meetings or group lunches;
  • Make sure everyone knows what the corporate objectives are for the next month, quarter, and/or year;
  • Talk openly and honestly about the challenges the company is facing, including competitive concerns;
  • Provide insight into the content of upcoming board meetings, ask for feedback and, more importantly, listen to the feedback; and
  • Trust employees (not just the executive team) with information and make them stakeholders in the success of the company.  

It is important to remember that in startups and small companies, the employees are taking on as much risk as management by signing up to be part of the team, whether it be personal, financial or career-related. While someone may be a software engineer by trade, it’s not unreasonable for this person to lose sleep over concerns of the financial health of the startup since she has her own financial health indirectly tied to the success or failure of the company. Good leaders understand this concept. 

The old adage that “knowledge is power” definitely applies to the corporate environment, and can play a prominent role in the spread of politics within an organization. By committing to being available and willing to share somewhat sensitive information from time to time, it lets the rest of the team know that the leaders trust, respect and view them as equally important to the overall success of the company. This transparency breeds loyalty to the company’s success throughout the organization. Employees in this culture will worry less about trying to position themselves as an active part of the information loop and focus more on being an active part of conquering the challenges facing leadership and the company. Closed groups, inner circles open the door for people to want to become part of that faction and creating opportunities for politics to take hold.

Finally, in return for providing an environment that fosters transparency and trust, leadership must also demand equal accountability by all members of the team. Everyone should understand their role and how it contributes to the success of the company, and then be expected to deliver. When the company has a big success or reaches a pivotal milestone, it should be recognized both as a team win, and a celebration of the success of those individuals whose work contributed to the win at all levels of the organization. Likewise, when a failure occurs, those who contributed to it should be expected to take ownership for their role (and that includes executive management) so that the lessons can be learned, the mistake can be fixed and the company can get back on the path to success. This is not as draconian as it may sound, because when employees are willing to receive kudos for the wins but afraid to take responsibility for the failures, they are more concerned about their own success over that of the company — and everyone knows it. Executives at startups that allow this behavior and do not evenly enforce accountability (perhaps as a result of unwavering loyalty to an employee) may be unknowingly inviting politics to creep into their culture.

By acknowledging the presence of politics in all types and sizes of business, executives at startups can create a huge advantage for their companies: they can take steps to avoid having it derail their progress on the way up, and in the process build a strong foundation of leadership for a sustainable, winning culture once they achieved initial success.