A lot of times when scaling, culture can creep up behind your back and bite you at times least expected. Not too long ago, I asked my more experienced serial entrepreneur colleague, what should I focus as a CEO, and his answer didn't surprise me. He said "Your focus should be on recruitment, culture and sales". While I could understand all the words and I had plans for sales and recruitment, I didn't fully fathom how to build the culture.
Initially I thought it was about a nice workspace, perks in the office such as lunches and workouts, but soon I realised that is not culture. Culture is not like a vision statement that you set up and let it be. So how do you manage to work with this as you scale?
1. Values vs. Virtues
Lots of companies have great values. We are customer obsessed, honest, humble etc. While the words can be memorable, most times I find them not useful in daily business scenarios. In my opinion, your company culture creeps up through a combination of things you do but as much with things you don't.
That is why I like the word virtues more. Virtues simply means what you do and not what you just say. So if people in your company work from home and just inform people on the day, that is now part of your company culture, whether you like it or not.
Facebook's virtue initially was Move Fast and Break Things. They just didn't speak about it, they did everything to practise it every day. If you had an idea, you were free to try it even if it broke the code base and the user experience for a short period of time. You had the mandate to try, that was the culture, driven by the virtue.
Tip: Observe the virtues going on in your organisation consciously or unconsciously, and then decide how you want to enforce behaviour that you want to foster.
2. Cultures are shaped more by the invisible than the visible
It is the invisible that stands out more than the visible rules or meeting agreements. What you don't do can speak louder than what you keep talking about. For instance, how do values help you answer questions like these? You surely can't have policies for every situation that might creep up. And even if you do, how many do you think will read them?
- Do you expect me to reply if you send me an email on Sunday?
- Should I stay at that fancy hotel or the cheapest option I can find?
- Should I take the express train to the airport or can I take the taxi?
- Should I take more space when my boss is there in a meeting or should I ask him permission first?
- Can I work from home by just informing or should I ask for permission first?
Tip: Get outside neutral observers (e.g. trusted advisors) to help you notice what you might not see. They might see patterns that your team or specific parts of your team do that might need to be set straight.
3. Some of the most important parts of your organisation are culturally driven
Be it sales, customer care, quality or design, they are probably culturally driven. If you see a repeat pattern of teams shipping late, churn numbers going up since customer care is more reactive, quality of your product dropping, it is more likely a systematic cultural problem than just firing an individual to make the situation better. At this point, you need to wake up to realise that the soil in which these teams are operating in need to be changed.
Tip: Carve out time to do check ins with different teams and ask them questions around their shipping time if tech or design teams, or ask them to show screenshots or demos of how they manage the hard customers if customer care teams. You will get hints of how the culture is forming as you scale.
4. Don't be afraid to remove a star performer
One of the costliest mistakes of my career is to hold on to a star sales girl despite knowing that she was detrimental to the culture. We kept telling ourselves that "Yes, she is a pain to be around. No one enjoys working with her, but look she is bringing in her numbers, she is finding fringe customers, contributing with her ideas". Little did we realise that she was one of the biggest reasons we could never recruit the people we wanted, since people kept leaving or the ones that stayed, felt sapped out at work and couldn't wait to get home. We kept saying that the timing was never right, as we were about to fund raise or she just got a big deal that she had to manage, but in all reality we were just cowards.
Tip: Don't be a coward. I recommend starting with a strong feedback session to catalyse change. If you see no improvement of the situation, you need to bite that sour pill. While it is probably one of the hardest things to do as a CEO and might slow you down temporarily, you will look back on it and thank yourself for having the guts to do it.
5. Ultimately, it is about making people safe to help them do their best work
At the root of it all, culture is really helping people feel safe. If people feel unsafe or threatened or not included, you have slim to no chance of getting work done. No wonder turn arounds are hard. People do not trust the leadership, they feel unsafe if they will have a job when they come back on Monday, or worse if a colleague might harass or discriminate them.
Tip: Break organisational hierarchies when it comes to understanding if your people feel safe or not. Don't rely on only your managers words.
Culture is dynamic. You can't put it inside a jar and hope it stays there.
Culture evolves every day. What worked for you to get so far might not work for you to go further. You hated people in suits? Well guess what, you might need to add more of them as you scale to get more enterprise serious customers. You didn't like key tags for your employees since it felt too corporate? Guess what, you need to find your way of providing security to your workforce. Embrace the dynamic challenges of culture as you scale.
Success in scaling is a multi-variate equation. While just a good culture doesn't guarantee that you will scale successfully, organisations that successfully scale manage to keep up with their culture, lead with their virtues and are not afraid to make changes to keep scaling sustainably.