Keeping culture intact as you grow

Maintaining a unique company culture is hard enough. But how do you keep your corporate personality intact when you hit a growth streak and your original values start breaking apart at the seams?

Culture doesn’t always last as you grow. Once the first big investment comes, the second interstate office opens and the bookkeeper counts employees in dozens rather than single digits, your values can start to deteriorate.

While the consequences of a deteriorating culture may not seem serious at first, it’s actually one of the biggest problems fast-growing companies face. Businesses end up losing key talent who joined the company purely because of that culture in the first place. 

Just last year, Google star employees Lars Rasmussen – one of the brains behind Google Maps – and Kate Vale decided to leave, saying the tech giant had lost some of its innovation and “start-up” atmosphere, even though Google regularly won “best place to work” awards.

Rasmussen now works for Facebook. 

“The most important thing is that you mustn’t compromise,” says Gillian Franklin, chief executive of cosmetics distributor Heat Group. “If you have a culture that’s supportive and hires people with can-do attitudes, it can change.

“The bigger your company gets, the more people compromise a small company. You lose your culture, so you have to make sure everyone understands it.” 

With the rise of Generation Y-friendly workplaces such as Google, employees now want more than just a pay-packet and experience – they want a culture that makes your business better than any other place to work. Otherwise, they’ll leave. 

“Gone are the days when you can just pay people more,” says Gap Adventures founder Bruce Poon Tip. “They want their jobs to offer them more, and they want great places to work. If you want to maintain the brightest and the best, then corporate culture is everything.”

What’s the worst that can happen?

Figuring out how you want culture to work in a start-up is easy. There are few executives and employees, so deciding how you want the business to run can be a simple, organic process. 

Benefits and perks like Friday afternoon drinks, regular team-building exercises and granting autonomy to employees in certain roles work well at first. But once more employees start joining, those elements can start to fall by the wayside. 

“Maintaining culture is one of the biggest challenges that any company can face,” says Andrew Braccia, partner at Accel Partners. He sits on the board of OzForex and 99Designs – two companies that have received substantial investments in the past few months and are on the cusp of massive growth.

Enterprise software company Atlassian has a very innovation-focused culture. Employees receive 20% free time each week in order to research new projects, which is a system similar to Google’s. But Braccia says it is becoming harder to maintain that culture as the company’s headcount grows into the hundreds and the founders operate two international offices. 

“How do you make sure that you build a good culture, and if you already have done, how do you sustain it? It takes the initiative of a good management team.”

Neil Tilley, chief executive of printing group UpStream, has seen his company grow substantially in the last 10 years, finally being acquired by Fuji Xerox last year. He found that during the growth phase, employees could become disgruntled.

“Sometimes during moments of change or other stress on our organisation we see aspects of our culture deteriorating,” Tilley says.

These experts say when cracks start appearing – a drop in productivity, for instance, or employees ignoring perks rather than embracing them – the culture is losing its way, morale will drop, and staff turnover will increase. 

Tilley says this started happening when the Fuji Xerox takeover occurred, as employees would begin hearing rumours about potential changes – some of which were completely false.

“When this happens it’s very important to significantly increase your communication with all staff and work hard to identify the core issues that are causing any distress and work to resolve these as quickly as possible,” Tilley says.

Be quick to change 

As your company grows, it’s inevitable that your culture will at least change somewhat. Internal processes will naturally change as more employees come on board. But Braccia says maintaining your culture isn’t necessarily about perks. 

“It’s not just things like ‘we have a free espresso machine’,” Braccia says, “but rather it’s the compounding of a lot of little things: communication, commitment to the management and hiring teams, and so on.

“It takes a lot of work to be culturally aligned.”

Tristan White, chief executive of The Physio Co, which has also won a number of “best place to work” awards, says he hasn’t so much maintained the culture as adapted it as new employees join. It hasn’t been easy.

“The culture grows and evolves with us, and that’s something I’ve learned as a CEO. I thought I wanted to stay the same, but it needs to take on a new shape and form as people grow,” he says.

“But I think there’s an underlying point to that, and that’s making sure the culture is true to your value as a company.”

White says he wants The Physio Co to consistently hire people who are passionate about and pursue activities outside of work. And he says while the carrots offered by a company might change – such as work-life balance, flexibility, gifts on birthdays and extra leave – the values of the company should remain intact. 

It all starts in the boardroom

This is why it is imperative your culture starts in the board room.

The experts say your culture needs to be part of your entire corporate strategy, which means it needs to appear on board meeting agendas. 

Simon McNamara, Grill’d co-founder and Inkuberra director, agrees, adding that executives need to take some time and define each year what they want the culture to be, and how that translates into the office. 

“I used to make sure to go offset and set the direction of the company for the coming year. It would make its way on to the agenda of our meetings, to make sure it didn’t need to be revisited.”

Bruce Poon Tip agrees. He says Gap Adventures’ culture is defined by freedom: employees are offered $2,000 to quit after their training, and don’t even receive a set amount of holiday time. Instead, Tip says they take as many weeks as they feel they deserve.  

He says these policies are examples of specifically designed “perks” set up at the executive level to demonstrate the company’s culture and values, even as it grows to nearly 1,000 employees.

“And that puts the onus on the business owners to run a tighter ship, and not have jackasses working for you,” he says. 

Culture begins in the hiring process, these experts say, and ensuring you find the right people is far more important in their eyes than whether you get the right person with experience. 

“I was recently told about someone in an interview process with our company who didn’t necessarily have the right experience, but had a great can-do attitude and was dying to have the job,” Franklin says.

“I interviewed her, and yes, she hadn’t done that job before, but we gave her a chance and now she’s a star performer. It’s a great example of how personal characteristics are worth much more than experience sometimes.”

Kye MacDonald, co-founder and chief executive of Skye Recruitment, says he has done the same, passing over a potential employee that could have brought in a lot of revenue. 

“We made a decision last week about this, whether we hire someone or not based on culture. We were hiring for a lead manager to diversify our business. This person could have done the job and would have been brought in money.

“But in the end, we had to say no. Because culture-wise, they just didn’t fit.”

MacNamara says the hiring process is one of the biggest warning signs for employees who won’t fit in.

“If you don’t hire people that fit with the culture, morale will eventually fall. Continue to recruit like-minded people.” 

But there’s a lot more to maintaining culture as you grow. Here are five key ways to keep the culture intact:  

Communication

One of the major magnifiers of low morale is a lack of communication. As a company grows and new offices develop, the original management slowly move away from the staff and the communication level can begin to dwindle. The passion, excitement and enthusiasm for the overall vision of the business are lost.

These experts say that communication needs to continue throughout the growth process. Tilley says when the Fuji Xerox acquisition was taking place, he made sure to send out a regular email answering anonymous questions from employees about the entire deal – a practice he continues to this day.

“Many of the questions I receive are about culture and are often very blunt and difficult issues. Dealing with them in such a transparent manner continues to build our culture.”

White does the same, using a regular, informal email to keep in contact. 

“I don’t know all the employees as personally as I used to, so maintaining that communication is critical.”

Get your staff to interview the recruits

It may seem out of place, and many executives might even shun this type of approach, but there are a growing number of companies that now allow staff members to recruit potential candidates – even executives.

Gap Adventures founder Bruce Poon Tip says staff members don’t get hired if their peers don’t approve.

“To get a job here, you need to pass our Culture Fit. If you don’t, you don’t get hired. In fact, a potential senior director failed the Culture Club last week. My VP was asking me if I could hire them, and I had to say no, because they failed the test.”

Tip also says he has such a hands-off approach now that he doesn’t even know what questions are asked during these interviews – whatever the club decides goes. 

MacDonald of Skye Recruitment takes this same approach. After he’s finished interviewing a potential recruit, he sits them down in front of the staff. 

“We interview them and make sure they are trained to do the job, and then we actually walk out of the meeting and sit them down, and give them to a couple of our staff. We want them to ask about what it’s really like to work here.”

“They want to find out if they would fit in with the team, could they see the person working there, etc.”

Have board meetings specifically about culture

While many executives might argue that maintaining culture is something that can’t be set in stone and managed like other aspects of the business, many of these experts disagree.

In fact, Braccia says maintaining culture becomes so critical as the business grows that SMEs need to have regular meetings about how the culture is to be maintained, and to determine courses of action if they feel the culture is getting off-track.

“This is easier to do when your business is between 10 and 30 people, but when you’re getting into 50 and 100 people, it’s harder. You need to have infrastructure intact.”

“You literally have to sit down in executive meetings and ask whether you’re straying true to the culture, and make sure you’re not drifting away – especially if you have multiple offices.”

Train your new leaders thoroughly

It’s inevitable that as a business grows the leadership will be spending far less time with employees and more time with middle management. As a result, morale decreases and employees become far less engaged with the company – star talent will suddenly decide to leave.

Tristan White says it is crucial that executives train their middle managers thoroughly and regularly, so employees are still able to approach them in the same way they approached management during “the early days”.

“You absolutely need to have the right representatives living and breathing the culture, and ideally you have them throughout every level of the business. That’s why training is so important.”

“Part of the strategy I’m using to maintain my culture is just investing all that time and effort into growing my leadership team.”

Don’t be afraid to change your culture

Culture can change – it must to survive. But these experts say while internal processes can change, the values of the company must remain the same.

“We value having diversity within our business, and that’s never changed,” Gillian Franklin of Heat Group says. “We value passionate people, dynamic people, and that remains with us even as the company grows.”

While others, such as Grill’d co-founder Simon MacNamara, say changing the culture “can be difficult and be met with opposition”, he says done in the right way it can reap rewards. 

“Every year I would set the agenda for culture, and we would revisit that and make sure the culture is how we want it to be. It tends to be organic if you’re recruiting the right way, but it needs to be revisited as well,” MacNamara says.

Tristan White of The Physio Co says he has “encountered much more difficulty in changing the culture”, but it’s necessary as the company grows. 

“We allow employees the freedom to interpret our values in their own way, and that is something that has changed.”