I recently read a very interesting opinion piece by Claire Cain Miller on the contrast between the fast-growth nature of technology startups and the need for mature compliance processes to stay on the right side of the law.
With a background in medical device technology, ethics and compliance, and deep involvement in the nationwide technology product management community, I have a wide perspective on the marketing and development of products to solve problems across many industries.
In the world of growth-stage product companies, there’s a premium on getting early feedback from customers, because that feedback is what enables wildly successful products and services. In Silicon Valley, Miller explains that for technology startups, “layers of bureaucracy, such as human resources departments, are seen as the enemy of speed and efficiency.”
Along with speed, tech startups put a premium on culture. Because startups are small and fast-moving, “culture” usually refers to an informal atmosphere without much bureaucracy. Unfortunately, people don’t always do the right things without adult supervision.
In startups, culture refers to an informal atmosphere without much bureaucracy, but people don’t always do the right thing. Share on Twitter
Miller writes about the recent high profile departure of a female engineer at fast-growing startup GitHub, who publicly accused the company of discrimination when she left the company this spring. It seems the company could have benefited from some compliance training. Julie Ann Horvath tweeted on March 14th:
“My only regret is not leaving or being fired sooner. What I endured as an employee of GitHub was unacceptable and went unnoticed by most.”
In an interview posted on TechCrunch, Horvath describes an ongoing confrontation with President and co-founder Tom Preston-Werner’s wife that culminated in repeated visits by Preson-Werner’s wife to Horvath’s desk, sitting in close proximity and glaring at length. She also described male coworkers “gawking” at female teammates who were hula-hooping at the office.
In a follow-up blog post written to explain the outcome of the investigations, GitHub’s co-founder and current CEO writes that while the company’s culture showed no signs of being sexist, Preston-Werner and his wife were deemed to have engaged in inappropriate actions, and in response Preston-Werner submitted his resignation last month.
The company deserves kudos for bringing in an experienced HR investigator to determine what happened. But the company now has to deal with some of the lingering questions such as: Was the company’s response strong enough to demonstrate a genuine commitment to a healthy culture? Had anybody in the company taken any harassment and discrimination training courses? Was compliance training on necessary topics ever offered? And, why did the company not hire a full time human resources executive until 2014 despite being founded in 2008?
After harassment, lingering questions: Was the response strong enough to show a genuine commitment to a healthy culture? Share on Twitter
Miller writes that “at many tech start-ups, the role of the human resource department is to compete in the talent war for engineers and provide a Ping-Pong table, a keg and free burritos. Other personnel functions, like providing parental leave and channels to report misbehavior, go ignored.”
In March I read an interesting article on building culture in tech startups by Candida Brush, which concluded as follows:
“I have two main take-aways:
1. Intentionally defined culture should be linked to the mission and the values of the company- but they also have to be communicated, memorable and “lived.” This can provide the glue helping a company to sustain during the dynamic ups and downs of the start-up process. At IDEAN, culture is “lived.”
2. Culture is a “strategic” resource leading, invested in and central to growth and expansion. It is strategic, just like technology, brand, or people. At TicketCake, it is core to strategy.
How consistent is this description with the goals and objectives of ethics and compliance professionals?
Ethics and compliance professionals depend on a healthy culture to be effective. Simply publishing a list of rules isn’t enough to get employees to actively buy-in. In the same way, startups rely on “intentionally defined culture” to drive towards success.
Startups rely on intentionally defined culture to drive towards success. Share on Twitter
Online training courses provide a number of benefits, including being cheaper to deploy than in person training and the convenience of being reviewed at any time of the day or night. It seems wise for tech startups to consider using online compliance training courses to cover a handful of topics to supplement their culture development, including: Code of Conduct, Employment Law, and Ethics Reporting, all of which are core to running a business. And from a legal standpoint, both harassment and discrimination training and employment law training courses are advisable, especially in the male-dominated tech startup world.
Further, awareness materials like vignettes and posters can be used to keep these topics top of mind on a periodic basis, further encouraging proper behavior.
Given their nature, tech startups are less inclined to spend time and energy on compliance topics. Unfortunately, by being too informal and too narrowly-focused on the end goal, the road may turn out to be paved with unexpected–yet avoidable–compliance challenges.