How to Scale Without Losing Your Company Culture
When your company is expanding rapidly, it’s difficult to determine whether some changes are the result of growth or if they’re diluting your secret sauce—the company culture that made you successful in the first place. In this post, find out how you can maintain the essential qualities that made your startup a success—even as your business grows.
There was a kind of magic when your startup was just three people in a WeWork space. You all ate lunch together and worked long hours side by side, but now that your business is expanding, there are some big changes happening. Some of those changes are great—you’ve got a higher MRR, you have your own office—but some of those changes are different. These days, you don’t have time to eat together, your team has doubled in size, and you’re spending just as much time managing people as you are working on projects. When you’re scaling, it’s hard to know if those changes are just a part of growing or if they’re diluting what makes your company great. Huggy Rao, a management professor at Stanford, explains, “When people think of growth, usually they think of anatomy. How big are the limbs? But the real thing is physiology. Is stuff circulating well—the blood and the oxygen? Even if your anatomy is very developed, your physiology can be bad.” We broke down the physiology behind great companies, and how you can keep yours healthy as it scales.
The Heart: State Your Core Values
Your core values are the heart of your company. They pump blood through the rest of your body. In order to make sure your core values are pumping through every part of your company, you have to articulate them. Writing them down helps you discover what’s “situational” and what’s “foundational” to your company’s operations. Situational parts of your company change over time—for example, whether your startup does a daily standup at 9:30 AM or checks in on Chat. In contrast, foundational parts of your company should stay the same, even as situations change. While you might not have that daily standup anymore, you want to conscientiously maintain the same culture of accountability. Foundational parts of your company serve the overall company strategy, and situational parts of your company are merely a part of your team in a certain moment. This framework from XPLANE helps explain what’s foundational—so you can make sure it stays in place as you scale. They divide company practices into four quadrants:
Baggage (not unique, doesn’t serve the strategy). Baggage refers to the little issues that crop up and change over time. Baggage is situational and doesn’t serve larger goals, so feel free to shed it as you scale. Industry best practices that have become outdated fall under this category.
Legit best practices (not unique, serves the strategy). These are industry standards that help your company thrive. While they can develop over time, following best practices is foundational to company success. For example, having a customer-first philosophy isn’t unique, but is often integral to SaaS startup success.
Sacred mythology (unique, doesn’t serve the strategy). These are company quirks that might make up your culture in the early stages, but aren’t necessary as you scale. They’re situational and can easily change as you bring on new team members. For example, taking a shot at the office mini-basketball hoop every time you make a sale.
Secret sauce (unique, serves the strategy). The secret sauce includes the principles that set your company apart. That secret sauce is foundational and defines you as business, so make sure it doesn’t change much as you scale. While you might stop shooting hoops every time you make a sale, a commitment to recognize and celebrate achievements should be an essential part of your company culture.
The foundational elements, like the secret sauce and best practices, make up your North Star for scaling. You need to accept that the other elements are likely to adapt as your team and business model change.
Document your core values
Writing down your core values helps you separate the secret sauce from the sacred mythology. It cements the core values of your company as foundational and ensures your team will keep them at the front of mind as company dynamics change. Even if your employees are uniformly excited about eating lunch together everyday during the early stages, that could change as you bring on new team members and older ones leave. Without a core values document, your values aren’t any more valid than hearsay since they’re being passed around by word-of-mouth, and can potentially change in the retelling. Here at Teamwork.com, not only have we internally documented our core values, we’ve also published them. Writing them down ensures they aren’t diluted as we scale. When a new hire joins our team, they know exactly what our core values are from the get-go. You don’t have to make your values public, but you need to document them in a place where your team, and especially new hires, can easily access them so they don’t disappear.
The Muscles: Keep Your Workforce Strong
If your values are the heart, your team members are the muscles—they need to be in good shape in order to make your company move and grow. If you encourage your employees to make exercise and wellness a priority, their engagement and productivity will strengthen your company’s performance and cohesiveness.
Source. When scaling, supporting your team’s health and well-being is essential for three reasons:
Increased productivity. One study found that on days when employees visited the gym, they reported increased productivity. The same researchers concluded that exercise enhances creativity, prolongs mental stamina, and helps your team learn faster.
Decreased costs. Studies have shown that 43% of participants in wellness programs take fewer sick days, and absenteeism is 27% lower in general for employees who make healthy food choices and exercise regularly than those who don’t.
Increased company camaraderie. In a poll of nearly 10,000 employees, Wired found that 70% of wellness program participants thought the program positively influenced work culture, and 58% said that the program had a positive influence on the level of company collaboration.
At a time when many aspects of your company are in flux, these benefits are crucial. Your team need to be operating at full capacity to make sure that your company stays above water, but as you’re scaling, they also need to go above and beyond to shape the company’s future and fix any growing pains that crop up along the way. Wellness initiatives give them the boost they need to do both.
Team-wide wellness challenges
It’s always a positive to provide your employees with great wellness options, like standing desks, healthy snacks in the office kitchen or free gym memberships. You can also increase your team’s fitness levels and camaraderie by participating in an office-wide fitness challenge. A pedometer challenge to walk the recommended 10,000 steps a day (which 80% of Americans fail to do) is an easy way to get the whole team onboard with a wellness initiative. It isn’t too demanding or time-consuming, and it’s cost-effective. A cheap pedometer costs about $10, or everyone can download a pedometer app for free. Apps like StrideKick allow employers to manage step challenges for their team. You can display a company leaderboard, take part in “streak challenges” where you test how many days in a row your team members reach 10,000 steps, and post photos, videos, and emojis on the app’s message boards. The app lets you motivate your employees to stay fit while creating some friendly competition. The competitive aspect of an office-wide fitness initiative helps your team bond, and can also potentially help you cut down on insurance costs. One company convinced their health insurance provider to cut the company’s insurance bill by 5% using data from office fitness trackers—saving $300,000.
The Nerves: Keep Communication Open
The nerves are the body’s communication system. They relay information from your skin to your body’s central nervous system regarding temperature, pain, touch and pressure. Just like the nervous system, your company also needs feedback processes to make sure you identify and address any issues before they grow into serious problems. In the past, companies favored a controlled communication model, where ideas and implementation came from the top down. If employees were allowed to offer any feedback, they did so at their six-month performance reviews, leaving the impression that feedback was only welcome during scheduled, structured opportunities.
Top-down communication model. But now, a top-down bureaucracy doesn’t operate quickly enough for startups to keep up. Instead of one singular authority, companies need many skilled people working as effectively as possible to produce quality work and head off potential problems—a healthy nervous system. That doesn’t mean switching to a bottom-up communication model, but adopting an empowered one as you grow will definitely be more responsive. Create an environment where employees can voice their opinions on changes they want to see. Employees should not only feel free to speak up when they see a potential problem, but they should also be actively looking for ways to make the company better. When you start a company, you usually have a flat org chart, and everyone discusses improvements over lunch. But as you grow, people might start going to lunch in groups, or you might take on some remote employees, which changes communication dynamics significantly. As you scale, open up communication channels so that your team members have several avenues to tell you what they think. Every startup will have growing pains—which is why you need channels for discussing solutions. Your team members are getting hands-on experience with the product and the customers, while your job moves more towards business management. That means they’ll have some of the best ideas for improvements, so you shouldn’t let them go to waste.
Open up feedback channels
It’s not always easy for employees to feel like they have permission to give suggestions to the boss—your team members might worry that their suggestions could be interpreted as complaints. Even when you actively want their feedback, you may have to overcome some reluctance from your team. Opening up different communication channels helps your team voice their concerns, ideas, and questions where they’re most comfortable. Team members have the ability to choose the communication channel that suits them which ensures that you get accurate, prompt responses. Here are some great ideas:
AMAs. Here at Teamwork.com, our CEO launched an initiative called “Feed the CEO Monkey” where team members can submit anonymous questions through a Google Form, and he answers every one of them on our internal blog. An anonymous AMA here the CEO answers questions either on an internal blog or at an all-hands meeting helps employees ask questions they might be apprehensive about asking in person.
1-on-1s. When your company is small, 1-on-1s are usually as simple as going for a walk with an employee, but you can also scale them as your company grows. Scheduling 1-on-1s between new team members and their immediate team leads helps create a holistic feedback chain. Everyone in the company can still feel like they have direct access to company leadership without requiring you to sit down and chat with every single person in the company, every week.
Surveys. Doing pulse check surveys like eNPS scores can help you get a better sense of your company culture and the effectiveness of communication over time. At Teamwork.com we did an eNPS survey to set a baseline and rolled out some initiatives to improve company culture. The result was that we reduced our number of detractors (employees who were less likely to recommend their employer to a friend) from 9 to 3.
Opening up these communication channels helps your employees feel heard. But hearing alone doesn’t cut it. You have to listen and act, too. Even if you don’t make a change based on every suggestion you get, you don’t want your team to feel ignored. When there’s a problem, talking to your team about the issues they’ve addressed lets them know that you’re working on a solution—even if it isn’t the same solution they initially proposed.
Grow a Healthy Startup
It’s important to hold onto the magic that fueled your growth early on. But change is an inevitable part of your startup’s journey—Amazon operates a lot differently now than it did when it was a bookstore in Jeff Bezos’s garage. While the different component parts of your company will change, creating systems makes sure you have the physiology of a healthy company. You can’t just sew on an arm without the blood vessels to support it. Instead of adding new parts to your pre-existing structures, you need to make sure there are structures in place to support those changes. Those systems will support your company’s growth—so it can surpass what you ever imagined when it began as just a few people at a WeWork space.