Team Chemistry: How the Nationals won the World Series
A few weeks ago, the Washington Nationals claimed a World Series championship, the city’s first baseball championship since 1924. The championship was unlikely: they were given just a 1.5% chance of making the playoffs in May and entered the World Series as the biggest underdogs in over ten years.
The Nationals win is a tribute to team chemistry. Mired in a slump and having won just 19 of its first 50 games, local media had conceded the season and were calling for the Nationals to fire their coach and dismantle their team. Instead, the Nationals claimed Gerardo Parra off waivers, a player no other team wanted.
Parra helped turn around the Nationals by contributing in the clubhouse rather than on the field. He brought an enthusiasm that proved infection. Parra orchestrated dugout dances after each Nationals homerun and adopted Baby Shark as his walkup song. Baby Shark became the unofficial Nationals mascot, a rallying cry for the team and its fans. The team started winning close games they had routinely lost earlier in the season and finished the regular season winning 74 of their last 112 games. The Nationals remarkable resilience continued in the playoffs winning all five elimination games with late inning rallies.
Company Culture: The X Factor in Successful Startups
Team chemistry in sports is hard to assess, harder to design and nearly impossible to replicate. NFL teams have recruited coaches from the New England Patriots for years, but they have never reproduced the culture and success of their alma mater.
The importance of corporate culture is evident in the recent acquisition of Whole Foods by Amazon and Whole Foods. Jeff Bezos’s “Day One” mentality espoused in each annual report since 1997 has turned Amazon into an innovative juggernaut. Whole Foods free-wheeling culture garnered unrivaled employee and customer loyalty fueling remarkable growth despite “Whole Paycheck” inefficiencies. The culture clash of Amazon’s centralized data-driven operations on Whole Foods decentralized culture may be the greatest risk to the acquisition.
Company culture is equally important for startup success. If entrepreneurship is a battle, most casualties stem from friendly fire or self-inflicted wounds. Up to 65% of startups fail from internal management issues according to a survey of venture investors (Founder’s Dilemmas by Noam Wasserman). Founder conflict is a ticking bomb rarely visible to outsiders.
When company culture clicks, it is the most sustainable form of competitive advantage. Competitors can typically reverse engineer technology innovation within a year or two. Strategic advantages are harder to overcome but are still visible and replicable over time. Company culture is inimitable: it is rarely visible to outsiders and harder still to replicate.
CEOs have an outsized influence on company culture, but it is a mistake to equate the two. Company culture is most visible when away from the shadow of the CEO. Culture is evident when walking around the office and talking with employees and customers. Does the office have buzz? How does décor and office layout inform company priorities? Are employees enthusiastic? How do they interact? Are their goals aligned, their roles clear? Do employees talk about the company with the pronoun “we” or “they?”
“CEOs have an outsized influence on company culture, but it is a mistake to equate the two. Company culture is most visible when away from the shadow of the CEO.”
Company culture goes deeper than buzz. Company culture typically is defined as a complex set of values, beliefs, assumptions, and symbols that define the way in which a firm conducts its business.[i]
In his study of over 1500 venture backed startups, Noam Wasserman observed in Founder’s Dilemmas that founder issues revolve around three Rs: relationships, roles and rewards. Do customers and employees espouse the same principles and priorities as top management? Does the company’s digital exhaust align with what you hear from the CEO?
Few companies have a distinctive culture that confer strategic advantage but those that do deserve special attention. Most blend together but a few stand out. Yelp in its early days had an irrepressible culture. The office was abuzz and employee enthusiasm was infectious. Lime and Scoop (both portfolio companies) share a similarly high level of energy and employee engagement.
Company culture confers advantage through brand and reputation, customer loyalty, and employee retention and productivity. A well-designed company culture is accretive for investors as the benefits of a constructive culture far outweighs maintenance costs.
“Company culture confers advantage through brand and reputation, customer loyalty, and employee retention and productivity.”
A recent survey by AT Kearney observed a gap in employee expectations and experience at work. Over 90% of employees seek joy from work but only 37% experience this. Companies can close this gap by reinforcing goal alignment, meaning/impact and acknowledgment[ii]. Companies that work well tend to communicate more, communicate more equally and embrace diversity.[iii]
Corporate culture in established businesses are hard to change but startup culture is dynamic and malleable. As the acquisition of Gerardo Parra for the Nationals illustrates, each new hire can materially impact company culture. New hires, especially executive hires, can alter culture and require time to acculturate. Our HR advisor highlights that companies often step back before moving forward when they hire new people. Being attentive to evolving culture requires companies to norm and reform before they storm.
All employees contribute yet the Board and management are the curators of company culture. In Board that Lead, Mike Useem and Ram Charan note that culture is one of five areas where Board members can have impact through the tone, priorities and governance culture they establish.
Culture requires nurturing and attentiveness. Culture is too important for it to evolve unintentionally and through happenstance. The chains of habit are too weak to be felt until they are too strong to be broken. Company culture collapse or are reinforced through the crucibles of leadership.
Pay attention to culture. Company strategy and execution receive most attention, but strategy informs culture and culture predetermines execution. What is your company culture? What are you doing daily to reinforce desired company values, behaviors and habits?
[i] “Organizational Culture: Can It Be a Source of Sustained Competitive Advantage?”, Jay B. Barney,
The Academy of Management Review, Vol. 11, №3 (July 1986), pp. 656–665.
[ii] “Making Joy a Priority at Work”, Alex Liu, Harvard Business Review, July 7, 2019.
[iii] “Why Some Teams Are Smarter Than Others,” ANITA WOOLLEY, THOMAS W. MALONE and CHRISTOPHER CHABRIS, Harvard Business Review, January 16, 2015.