Culture in a software development company

These days, we hear a lot about culture and how it is crucial for any new company to thrive. But what is company culture? Why is it important? And how can you change a toxic culture in order to run a successful company? Today, we’ll be delving into the importance of culture within a software development company by focusing on these three questions.

Software Development Company

What is company culture?

Back in 2017, Ben Horowitz discussed the issue of company culture at the Startup Grind Global Conference. Horowitz has a lot of experience creating successful businesses, having co-founded and CEO the software company Opsware (later acquired by Hewlett-Packard) and the venture capital firm Andreessen Horowitz. In his talk, he mentioned that the best advice he received from people who knew how to build companies was to focus on culture as it was extremely important in order to succeed. But what did they mean by culture? No-one seemed to be able to define this apparently abstract concept, which is an ongoing issue with software development companies today, as they can confuse culture with other aspects of their companies.

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Horowitz explained that culture is not about perks like yoga at the office or getting organic food. It does not equate to company values, such as integrity, pride or sacrifice, either. He clarified that a company’s culture is about three things: the collective behavior of everyone in the organization, what people do when you’re not giving them a direction, and the organization’s way of doing things. In order to exemplify,  provided the following questions to focus on when thinking about your software development company’s culture: Do you get back to people? Are you open to new ideas? Is data or intuition more important? Does a job title impact who is right and who is wrong? Do you show up on time? Do you use your own products? Does craftsmanship matter? Is it ok to take risks? Is watching what you spend important? Do you tell the truth?

Why is culture important?

Now that we have an idea of what company culture is about, it’s time to focus on the reasons that make it a vital element of any software development company seeking to thrive in today’s competitive environment.

  1. It defines your company’s identity and reputation: company culture has an effect on all aspects of your enterprise as it reflects the way to go about your business. This means it affects both your internal and your external identity, i.e. how others perceive you, and, therefore, your reputation.
  2. It can turn your employees into either allies or critics: if your employees are motivated and feel like their work matters, they will be your strongest allies and will become advocates for your company. On the other hand, if they are not happy with the software development company’s work environment and feel the culture is toxic, they will most likely become your harshest critics.
  3. It affects onboarding: if you have a strong and well-organized company culture, the onboarding process will be smoother. Company culture starts on day 1 and you should make sure that it is reflected in your onboarding process.
  4. It affects health (for both employees and finances): culture has a direct effect on your employees’ performance and wellbeing, which then translates into your companies financial health. Models such as the Edgar Schein Model demonstrate that business performance is actually damaged when profit takes precedence over human empathy. Successful companies focus on purpose instead of profit. In other words, healthy and happy employees equal a healthy company in all respects.
  5. It can help improve employee retention and engagement: as we mentioned in a previous article[1] , a huge issue at any software development company is attracting, retaining and engaging talent. As Kate Wardin explained in her talk at Boston React, you need to foster an irresistible culture in order to succeed in this front. People are what make or break a company and you should focus on making sure they feel they are part of a community and make them a central part of your culture.

How do you change company culture?

Finally, what happens if the current culture at your software development company is not the right fit? Can you reprogram an entire culture in order to be successful? Well, there is no need to panic. In his talk, Ben Horowitz assures us change is possible with no need to start from scratch. He clarifies that culture is what drives behavior and you should learn to separate people from culture.

Time for Change

In order to change your software development company’s culture, you can simply follow Horowitz’s four keys:

  1. Keep what works: there are probably some things that do work within your company so don’t dismiss everything. Determine what works and, therefore, what you should keep.
  2. Create shocking rules: Horowitz explains that shocking rules make people question why they exist at all. And, as a consequence, they will really think about the answer when they get it.
  3. Incorporate outside leadership: bring people from other cultures and insert them at high levels within the organization, thus adopting their way of doing things and making it easy to bring about change.
  4. Make decisions that demonstrate priorities: always remember that the decisions you make matter and are a clear reflection of what the companies priorities and beliefs are.

Horowitz finishes off his recommendations by stating that, although culture sounds abstract and difficult, there is almost nothing more important than culture when starting a company.

Why is culture important in a software development company?

Final thoughts

If you are just starting out, we hope this article has made you think about the culture you wish to establish in your software development company. That said, you should make sure to add it to your business plan if you haven’t already done so. And, if you have already established a software development company, we hope this helps you reflect on your existing culture and whether any changes are needed in order to improve your culture. You can check out Ben Horowitz’s full talk in this video.