Eric Yuan was not happy at Cisco Systems even though he was making a salary in the high six figures, working as vice president of engineering on the videoconferencing software Cisco WebEx.
“I even did not want to go to the office to work,” Yuan told CNBC Make It in 2019.
Yuan was unhappy with the culture at Cisco, where new ideas were often shut down and change was slow. When he suggested building a new, mobile-friendly video platform from scratch, the idea was rejected by Cisco’s leadership. Frustrated by the resistance to innovation, Yuan left the company in 2011 and founded Zoom, whose value increased astronomically during the Covid pandemic years as it became the go-to app for remote work.
One might think that founders who, like Yuan, expressed unhappiness with their previous employers’ culture would establish new companies with very different values. However, we found that, on average, whether they want to or not, founders are likely to replicate the culture of their previous employer in their new venture.
Founders come from somewhere
Yuan’s story includes the idea that many people have of the lumbering tech giant versus the agile startup. Yet our research found that this distinction is actually not so clear.
More than 50 percent of US tech startup founders have previous experience in other companies, often in giants like Google or Meta. The work culture of these huge organizations is not always so easy to shake off when entrepreneurs go on to start their own companies.
In our research, we identified 30 different cultural elements of companies. These include cultures of work-life balance, teamwork, authority, innovation, and compensation-oriented vs customer-oriented culture, to name a few.
Previous research has shown that startup founders transfer knowledge and technology from former jobs. We found empirical evidence that they also transfer work culture.
Comparing organizational cultures of “parents”, “spawns” and “twins”
In our research, we identified startup founders and used their LinkedIn profiles to find companies where they had previously worked. Our team applied natural language processing, namely Latent Dirichlet allocation topic modelling, to text on Glassdoor, a site that allows current and former employees to anonymously review companies. We used the processed reviews to characterize the cultures of “parent” companies and startup companies, or “spawns”. We also identified a match or “twin” for the spawn organization that had a similar size, product and number of years in business.
Then, we compared the culture of each spawn startup to the culture of its parent organization, and the culture of each spawn’s “twin” to the culture of the same parent, in a given year. If a spawn was more similar to its parent than the twin was to the parent, this supported our hypothesis that founders tend to transfer their previous work cultures to their new ventures.
And we found that there are three conditions that favour such a transfer.
- Length of employment
First, the longer years founders have been at an organization, the more likely they are to transfer its culture to their new startup, because they have become very familiar with that culture.
- Congruency of culture
The second condition is the congruency of culture, i.e., the degree to which culture is composed of elements that are consistent in their meanings, and hence, have internal compatibility.
For example, in our data, there a cloud-based location services platform that has high congruency in its culture. The company has three highly salient cultural elements: it is adaptive, customer-oriented and demanding. These elements consistently point to a culture of customer responsiveness. Our data also includes an e-commerce clothing platform with two cultural elements – growth orientation and work-life balance – that are poorly aligned in their meanings, reducing the congruency of its culture.
We found that the more internally congruent a parent organization’s culture is – and thus, the easier it is to understand and learn – the more likely it is that founders will transfer its elements to their new companies.
- Typicality of culture
Third, the more atypical an organization is – the more it stands out from others in its field – the more likely it is that its culture will be transferred to the startup.
In an atypical culture, it is easy for employees to identify cultural elements, and to remember and incorporate them once they found a startup. Because an atypical culture draws a stronger boundary that distinguishes an organization from others, employees become more aware that the organization has chosen them and that they have chosen to work in it. This creates a cognitive attachment in the employee toward the organization, and also increases how well they learn its culture.
In our study, each startup’s cultural atypicality was measured by calculating the cultural distances between all organizations within the same product category for a given year.
It’s common for founders to describe their culture as distinctive or one-of-a-kind. However, we found that’s not necessarily the case. Founders tend to replicate the culture of their previous employers because they’re accustomed to that way of working.
False perceptions?
Many students tell me they’re drawn to more creative and innovative work environments – something they often associate with startups rather than traditional, established companies.
But our research suggests this perception might not be entirely accurate.
Job seekers looking for unique or forward-thinking cultures may be surprised to find that startup environments resemble those of larger tech companies more often than expected.
And for founders – especially those who left previous roles because of frustrating workplace cultures – it can be a wake-up call to realize how easy it is to unintentionally recreate the very environments they may have hoped to avoid.
Yeonsin Ahn ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.
This article was originally published on The Conversation. Read the original article.
