Entitlement in Startups
Part One
Note to readers: The following addresses a broad subject. That’s why today’s entry is the first in a series of at least three linked but separate blog posts. As always, I welcome your comments on this post and any suggestions you may have for future topics.
Everyone who is honest and open acknowledges that there is a sense of entitlement manifested by many founders, executives and employees working in startups today. The extent of this “problem” is subject to debate.
In this blog post I’m going to describe the startup entitlement phenomenon, as well as how and where it usually arises. Next, I’ll explain that there are concrete ways to deal with both episodic and chronic entitlement in early-stage companies, and outcomes you should expect from taking corrective actions.
I’m of the opinion that entitlement is pervasive in startups. It can be destructive and often has the potential to be ruinous, which is why it needs more elucidation. I want to emphasize that it’s a real problem, and mustn’t be taken lightly.
Entitlement can be percolate up in a wide range of behaviors, such as:
Bothersome comments in a Zoom conference,
Injurious diatribes at a company meeting,
Rigid adherence to a 9-5 work day,
The ‘long weekend effect” (frequently taking Fridays or Mondays off,
Acidic exit interviews,
Holding back strategic communications or documents.
Negative, unhealthy comments and destructive actions fall into the behavior sphere of entitlement.
Entitlement, according to Business.com, “can include a whole slew of destructive behaviors from employees: a 'that's not my job' stance, alienating co-workers with arrogance, or inflexibly defending ideas that don't necessarily contribute to the company's well-being. Ultimately, entitlement degrades collaboration.”
Entitlement is frequently observed and deliberately disregarded because of the general belief that it’s the third rail of employee relations. It is often not fully addressed in startups, partially because it is manifested by founders, CEOs, executive leaders and junior (but critically important) employees. Entitlement raises its ugly head most often in conversations about sensitive topics, such as age, sex, title, being a parent, school or work affiliations, political views, privilege, and other sensitive topics.
A couple of examples of behaviors occurring in startups that show entitlement’s dark side involve:
A founder compensates for his/her/their inability to contribute to the company post-Series B with rants during meetings
An executive says that “senior” management is less competent than they are
An executive says that if it weren't for them, the entire company would fall apart
An engineer doesn’t show up on Fridays for meetings with the sales and marketing teams because the engineer doesn’t think those people are worth his or her time.
A junior employee expects positive reinforcement from peers and management despite their consistently subpar performance (regularly missing deadlines, blowing assignments, etc.)
A founder tolerates a rock star coder’s mismatch with the culture. Other engineers report that that person is a “great coder but a terrible fit” for the dev team.
In short, entitlement is a corrosive problem in the startup realm. If episodes like those mentioned above are tolerated by leadership, entitlement can become pervasive throughout a company, and that’s a story that never ends well.
Addressing entitlement head-on is a much more viable strategy. The following section outlines several specific, concrete actions company leaders can take to root out the insidious problem of entitled behavior and other related behavioral concerns in the workplace.
Create a Culture Document. Startups should create a one-page culture document as early as possible after company founding that identifies values and other elements of culture. More specifically, this document should encourage collaboration, foster a team environment and spell out how people should respect one another and not take on airs – like entitlement.
Set Clear Expectations. To reinforce the culture document, other key HR documents should frame management’s expectations around things like interpersonal communications. Managers should set the tone and lead by example with elements such as maintaining respect for the individual, equality for all, and leaving no room for a sense of entitlement.
Encourage Collaboration. When announcing MEOs (to learn more about MEOs, click here), new initiatives, new fiscal year objectives and other goals, the company’s CEO and executive leaders should encourage and underline collaboration as the way that things get done.
Create a Team-First Environment. Make it a point to recognize “the team” in general and in particular, team achievements. For example, recognize the marketing and sales teams as the reason for the success of a tradeshow. When individual achievements are regularly singled-out by executives, a signal is sent that the company prizes individual achievements more than those of its teams.
A team-first environment inspires trust in teamwork and encourages the sharing of recognition by all employees. Professional athletes often have a team-first attitude. This has been ingrained in them from an early age, but is reinforced at a heightened point at the pro-level. The same goes for startups as well.
Call Out Your Concerns. Hold regular check-ins, reviews and ad hoc 1:1s to deal with instances of entitlement.
Create An Anonymized Bottom-Up Feedback Channel – such as a special email address.Consistent feedback from the staff – that is anonymized but known to be read by the ELT and CEO – can help identify instances of this behavior and help overcome a sense of entitlement in the organization.
Document Your Concerns. When entitlement becomes an inter-personal or performance-related issue, it’s necessary to document your concerns in writing. For example, if an individual’s job performance is impaired or entitlement leads to destructive behavior, a performance improvement plan (PIP) is sometimes appropriate. If you choose a 1:1 meeting, file a memorandum and opt for a PIP. These measures help the employee realize the seriousness with which the company takes the issue. It also gives the company and managers a way to monitor the situation and keep the employee on track, and a paper trail in case the employee doesn’t turn it around.
I think that the ultimate cost of these behaviors is an erosion of the social fabric that binds together a company. In some companies, there are isolated instances or sporadic outbreaks of entitlement. But when there’s a prevailing sense of entitlement in the culture, customers, partners, investors and others can readily detect it. That’s when it starts to impact business performance at an individual level and, in turn, at the team and collaborative level. Left unchecked, it inevitably hinders employee retention, eventually causing an HR and productivity nightmare affecting the entire company. In today’s market, where retention is based on many different factors beyond compensation packages, dealing with these problems before they become widespread is critical for the success of the company.
The real learning moments are tough to talk or blog about. But denial clearly isn’t the answer. Entitlement in a startup can lead to disruptive, unhealthy and even destructive behaviours which impact performance. Proactively dealing with entitlement in a head-on manner helps address the root cause of this behavior before it becomes an issue or a problem.