There’s an essential, intangible something in start-ups—an energy, a soul.Company founders sense its presence. So do early employees and customers. It inspires people to contribute their talent, money, and enthusiasm and fosters a sense of deep connection and mutual purpose. As long as this spirit persists, engagement is high and start-ups remain agile and innovative, [61](1. spurring 2. diminishing 3. restraining) growth. But when it vanishes, ventures can falter, and everyone perceives the loss—something specialis gone.
The first person I heard talk about”the soul of a start-up” was a Fortune 500 CEO, who was trying to revive one in his organization. Many large companies undertake such “search and rescue” initiatives, which reflect an unfortunate truth: As a business matures,it’s hard to keep its original spirit alive. Founders and employees often [62](1.upgrade 2. confuse 3. embrace) soul with culture and, in particular, the freewheeling ethos of all-nighters, flexible job descriptions, T-shirts, pizza, free soda, and a family-like feel. They notice and wax nostalgic about it only when it wanes. Investors sometimes run roughshod over a company’s emotional core, pushing a firm to “professionalize” and to pivot in response to market demands. And organizations trying to recover an “entrepreneurial mindset” tend to take a superficial approach, addressing behavioral norms but failing to [63](1.zoom out 2. break even 3. home in ) on what really matters.
Over the past decade , I’ve studied more than a dozen fast-growth ventures, conducting 200-plus interviews with their founders and executives,in an attempt to better understand this problem and how it can be overcome. I’ve learned that while many companies struggle to retain their original essence, creativity, and innovativeness, some have managed to do so quite effectively, thereby sustaining strong stakeholder relationships and ensuring that their ventures continue to [64](1. ramble 2. backtrack 3. thrive). So often entrepreneurs, consultants, and scholars like myself emphasize the need to implement structure and systems as a business grows, missing the importance of preserving its spirit. We can and should focus on both. With effort and determination, leaders can nurture and protect what’s right and true in their organizations.
Most founders, [65](1.by contrast 2. as a result 3. on occasion), believed that their start-ups were about something more than their missions, business models, and talent,even if those founders couldn’t articulate it precisely. For example, in his book Onward, Howard Schultz described the spirit of Starbucks this way:”Our stores and partners [employees] are at their best when they collaborate to provide an oasis, an [66](1. upstaged 2. upstream 3. uplifting)feeling of comfort,connection, as well as a deep respect for the coffee and communities we serve.” Iinterviewed another founder who identified “loyalty to customers and the company” as the “core essence” of what made his business great. A third spoke about this essence as “a shared purpose built around an [67](1. obsolete 2. audacious 3. erratic) goal and a set of common values.” Early employees told me that they identified intensely with their enterprises, feeling what Sebastian Junger,in his book Tribe, refers to as “loyalty and belonging and the eternal human quest for meaning.”
Myinvestigation pointed to three elements that combine to create a unique and inspiring context for work: business intent, customer connection, and employee experience. These are not simply cultural norms designed to shape behavior. Their effects run deeper, and they [68](1.nullify 2. spark 3. derail) a different,more intense kind of commitment and performance. They shape the meaning of work, rendering work relational instead of merely transactional. Employees connect with a [69](1.galvanizing 2. patronizing 3. demoralizing)idea, with the notion of service to end users, and with the·distinctive,intrinsic rewards of life on the job. People form emotional ties to the company, and those ties energize the organization.
All the ventures I studied had their own animating purpose. Usually this “business intent” originated with the entrepreneur, who communicated it to employees to persuade them to trade stable jobs for long hours and low pay. Although many factors—including the desire for an eventual [70](1.firewall 2. windfall 3. waterline)-drove the people I interviewed to join their companies, all had a loftier desire to “make history”in some way,to be part of something bigger. They wanted to build businesses that improved people’s lives by changing the way products or services were created, distributed, or consumed. Many ventures define their mission or business scope, but the intent I [71](1. uncovered 2. unloaded 3. unleashed) went further, taking on an almost existential significance-a reason for being.
Consider Study Sapuri, a Japanese enterprise started in 2011 within the multibillion-dollar information-service and staffing company Recruit Holdings. Seeking to turn around Recruit’s declining education business, Fumihiro Yamaguchi, a relatively new employee at the time, [72](1.refuted 2. hatched 3. averted) a plan to create a website that helped students by giving them free access to study guides to university exams. When he presented the idea to an internal group charged with [73](1.arresting 2. launching 3. preventing)in-house ventures, he explained that the website would address educational inequality in Japan by providing more people access to learning materials—an intent that aligned well with Recruit’s long-standing mission of creating new value for society.
Since its launch, Study Sapuri has continued to evolve but always with [74](1. deference 2. exposure 3. resistance) to its original intent.Among other moves, it has marketed its services as a college prep service and a tool for high school teachers to use with remedial students, and has expanded its content to include elementary-and junior-high-school material and academic coaching. In April2015, through its parent company,it acquired Quipper, which offered similar services mainly in SoutheastAsian markets. Quipper’s founder, MasayukiWatanabe, remarked that he liked the deal because ofStudy Sapuri’s intent:”We believed that learning is a right and not a privilege. We shared the same vision.” Top talent felt the same way.”I was drawn to the idea of addressing these issues ,” one employee told me. “My motivation to join was to offer true value to customers; the users and their parents can actually see that their academic ability is improving.” By early 2019, Study Sapurihad [75](1. contracted 2. stagnated 3. emerged) as a central brand of Recruit’s educational business, with 598,000 paid subscribers.
Often, it takes a crisis for people to notice that a company’s soul is disappearing or gone. Recently, Facebook and Uber both publicly apologized to customers for losing their way.In 2018 hundreds of Google employees demanded that the tech giant [76](1. execute 2. formulate 3. shelve) plans to develop a search engine that would facilitate the stifling of dissent in China. “Many of us accepted employment at Google with the company’s values in mind,” they noted in a letter to the company, “including…an understanding thatGoogle was a company willing to place its values above its profits.”
When damage to the soul is especially [77](1. dismissible 2. temperate 3. grave), founders have sometimes returned to restore it. In 2008, Howard Schultz resumed the CEO role at Starbucks because, as he explained in his book, he “sensed something intrinsic to the Starbucks brand was missing.” In the ensuing months, he undertook a number of measures to [78](1. nurse 2. police 3. doctor) the company’s spirit back to life. Notably,he convened an off-site session at which leaders thought broadly about the brand and focused specifically on customer relationships. As he told his team, “The only filters to our thinking should be: Wililt make our people proud? Will this make the customer experience better? Will this enhance Starbucks in the hearts and minds of our customers?” Weeks later, when presenting a transformation plan to investors, he [79](1.invoked 2. neglected 3. renounced) a return to the company’s original business intent,saying,”There are people in this audience…who believed in a young entrepreneur’s dream that we could create a national brand around coffee, that we also could build the kind of company that had a social conscience. It’s time to convince you and any other people…to believe in Starbucks again.”
Safeguarding the organization’s soul is a critical if little appreciated part of the founding
cohort’s job, on par with such key decision areas as governance and equity splits. Study Sapuri and Starbucks both blossomed as start-ups thanks to their founders’ deliberate efforts to preserve the alchemy that made them great enterprises from the beginning.Over the long term, a strong soul will draw [80](1. off 2. in 3. away) and fire up various stakeholders. Even as companies institute processes, discipline, and professionalization, they should strive to retain the spiritual trinity of business intent, customer connection, and employee experience. It’s the secret to not only growth but also greatness.
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