True North: Is It Possible To Maintain Culture When Scaling Up?

The story starts in a co-working space with a founder and a team of three or four employees. Fast forward a year or two and the payroll has expanded to around 50 people and the founder has been joined by a couple of experienced department heads, paid for by the first decent-sized funding round. Jump further down the timeline and the business is employing 250 people. With some heavyweight non-executives on the board, things are beginning to look pretty corporate. At this point, the founder may tell you that success, to date, has been achieved while retaining the all-important culture that was in place back in the co-working space days. Indeed, that culture has been instrumental in the success of the company.

But here’s the thing. In the early days, culture is often defined by the personality of one or more founders. They may be people who encourage team members to contribute ideas, challenge decisions and actively play a role in moving the company forward. Conversely, they may prefer a top-down approach to making decisions. That personal modus operandi becomes the company culture. The chances are that nobody thinks about it very much. It simply is what it is.

But as the company grows, things begin to move a little. The CEO/Founder who once did everything from sales to product design must cede a certain amount of responsibility to incoming managers. They, in turn, have their own personalities and ways of working. The team members are also drawn from a bigger pool. They no longer look quite so much like clones of the founder. So how do you retain the culture that worked in the early days? Is it even possible to pin down and define culture as a business scales?

A couple of weeks ago, I spoke to Charlie Coode, founder of Culture15a consultancy specializing measuring and managing culture within companies. I asked him about the reality of nurturing that potentially amorphous thing called culture in a fast-growth business environment.

What Does A Culture Look Like?

As Coode sees it, the culture of organizations naturally changes as they grow but it is important for leaders to think about the culture they want to maintain or achieve. This is not necessarily straightforward. It’s easy to think in terms of headline terms such as agility, innovation, or teamwork but that can be a bit fuzzy.

“You have to ask yourself what, say, innovation looks like,” he says. “What do the behaviors look like?”

And for scaleups, the challenge is to take forward what is already good about their cultures as their payrolls grow. As Coode sees it, there is a natural tendency to move away from some of the more “freewheeling” elements that characterize very young companies.

“When a business starts, decision making is very easy,” he says. “As it grows, you tend to lean towards the status quo and conflict aversion.”

So assuming that culture matters, founders have to codify and communicate their values and intentions. “There is a point when you have to go from implied to explicit,” says Coode.

This does not, he stresses, mean relying on a mission statement. “Mission statements are very useful for defining the corporate agenda, but they are very deeply unhelpful when it comes to culture.

Instead, he says,scaling businesses should begin to formulate not only a culture but also the ground rules for achieving it, with behaviors as the starting point. “|You need to be more explicit about culture,” he says. “And the starting point is to become more explicit about the expected behaviors.

What Kind Of Culture Do You Want ?

Then there is the question of whether or not a particular culture is desirable – or to put it another way, whether it will help the company achieve its ambitions. Coode says this where managers can become confused. He cites the example of a client business that was seeking to create an environment where people want to work. That was the stated cultural aim. However what it really wanted was to create a “high performance culture.” The two things are not mutually exclusive, but neither are they, necessarily, the same. It’s important, therefore, not simply to target a particular culture but also think about whether it’s the right one.

Andy Fishburn, managing director of Virgin Startups – an organization that provides a range of support services for young companies – agrees that culture should be defined and nurtured.

“Every organization has a ‘culture’ – whether that be good or bad – so it’s important to know what type of culture you’re striving for from day one. Your culture should be intrinsically linked to your business values, purpose and mission – which is why it’s crucial to have a good understanding of your company culture as you grow and scale.” he says.

So how does that play out in practice as entrepreneurs grow their businesses? Professor David Keene is CEO and co-founder of Aurrigo Internationala U.K. company that designs and makes autonomous vehicles for the automotive and aviation industries. The company floated on London’s Alternative Investment Market in 2022 and has since expanded its workforce from 50 to 100 people.

Strong Identity

As Keene sees it, a focus on culture is vital for fast-growing businesses. “When you grow this quickly it is vital that you are doing so in keeping with the culture the business was founded on,” he says. “Developing and retaining a strong identity is essential. It attracts and retains top talent, fosters the desire to do things differently, boosts employee engagement, and ultimately drives organizational success.”

Keene says the cornerstones of Aurrigo International’s culture include innovation, inclusivity, agility and well-being, elements that have to be embedded in the working practices of employees. To that end, he stresses the importance of employee engagement. “We believe communication is key and maintain open lines of communication through employee forums, suggestion boxes, regular team meetings, and quarterly newsletters ensuring everyone is up to date and feels heard and valued,” he says. In addition, the company uses staff recognition programmes and awards to underline its cultural messaging.

Hiring The Right People

Arguably it’s much easier to maintain a consistent culture if you have the right people there in the first place. Certainly, that’s the view of Lena Hackelöer, CEO and Founder of fintech Brite Payments. Based in Stockholm, the company provides services across 25 countries.

“I believe that getting early hires right is really important,” Hackelöer says. “They help to shape an authentic culture. And as the business becomes established, it’s equally important to bring in leaders that have a good cultural fit. This approach helps to create stability and security – all important when it comes to staff retention.”

Ultimately, every business will home in on the cultural elements that it deems most important. That might mean hiring staff who are open to flexible working and regular upskilling. Others may focus on diversity. Each scaling company will have its own idea of what represents a good cultural fit.

The question that hangs in their air is whether any of this can be effectively measured. As a consultancy, Culture15’s answer to that question is yes – through surveys that track metrics around decision making, trust, interactions and information flow.

Regardless of whether a growing company wants to take the survey route, the key is to understand the company culture as it is today, define where it should be and communicate that to staff and managers.

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