By Candace Coleman, CultureWise Content Manager
Business owners often set their sights on growth after reaching or exceeding benchmark goals. They know what it takes to succeed, so they scrutinize critical operational aspects of their companies before they take the plunge. Then they carefully assess methods to scale elements of their organization to cope with more offerings, locations, and customers.
Their “checklist” might include:
- Market research
- Real estate
- Additional departments
- Broader sales techniques
- Staffing analysis
Savvy leaders look ahead and anticipate needs they’ll have in all these areas. But many people inadvertently omit a critical element in their growth strategy: their company’s culture. Expansion can backfire without a cohesive workforce to preserve the essence of what made the business successful in the first place.
A company’s culture, visible in the prevailing behaviors of its staff, forms the backbone of the organization. Growth simply isn’t sustainable without a strong corporate culture.
How Company Culture Starts…and Evolves
If you started your own business, you also created its original culture. You hand-picked the team that stood by your side as you opened the doors. This core group enthusiastically followed your lead as you demonstrated your work ethic and interacted with employees, customers, and vendors. Your behavior became the blueprint for “how we do things around here.”
This formula may have continued to work as you began to expand your enterprise. When you started adding more staff or even locations, your persona probably still loomed large. There was enough contact between you and most employees to keep the cultural momentum going.
But there’s only so much of you to go around. A leader’s personal touch becomes less apparent as their company’s footprint continues to grow. Left untended, the culture will eventually reflect the loudest voice, positive or negative, in any given group. If there are multiple factions, those loud voices can foster opposing micro-cultures that square off against each other.
So, how do you simultaneously grow your business and preserve the culture at the heart of your organization?
Just as you do with every other aspect of your business, you make a plan and follow a process.
A Systematic Approach
A company’s culture is deeply personal to its founder, but it can be codified to preserve and extend it throughout a growing workforce. Before a staff grows too large to simply follow their leader’s cues, a system should be put in place to establish an enduring organizational culture.
CultureWise Founder and CEO David Friedman recommends an eight-step framework to create a successful culture initiative. Each step in Friedman’s process helps solidify a strong culture, and they should be undertaken in succession. This article focuses on the first three steps, which are critical to sustaining culture in a growing company.
- Define the employee behaviors that drive the company’s success
- Ritualize the practice of these behaviors
- Select people who are the right fit for the company culture
Many company leaders create a formal set of values to inspire their team. But these tenets, usually abstract concepts like “Respect,” “Quality,” and “Service,” can be interpreted in various ways by different people.
Organizations that base their culture solely on values risk misinterpretation. Employees often live out their understandings of these terms instead of what the leader intended.
Instead of just leaning on formal values, leaders should identify and describe the conduct they want their staff to exemplify. To do this, they should ask themselves, “What do I want to see my people consistently doing as they work and interact with others?”
When specific behaviors are defined, people will know exactly how to perform them. Some examples of behaviors that Friedman has implemented in his companies are:
- Honor commitments
- Practice blameless problem-solving
- Get clear on expectations
Beyond identifying the behaviors, leaders should spell out what performing them looks like in action. For instance:
Honor Commitments—Do what you say you’re going to do, when you say you’re going to do it. This includes being on time for all phone calls, appointments, and meetings. If a commitment can’t be fulfilled, notify others early and agree on a new deliverable to be honored.
Behaviors described in detail give an organization working definitions that put everyone on the same page. Clearly articulated behaviors also create a common language that makes it easier for people to collaborate more effectively.
As the company grows, the common language helps preserve and extend the culture. It unifies veteran workers and recruits, remote and on-site workers, and staff operating in multiple locations.
It’s rare that we get better at something, or even stick with it at all, without practice. Every individual or team achievement is based on consistent, repetitive skill-sharpening. The way many successful people and groups improve and stay at the top of their game is through ritualized activities.
The same thing happens in company culture when staff members use rituals to practice prioritized behaviors. Instead of randomly engaging in behaviors when they come to mind, rituals offer regular opportunities for people to think about how and why things are done.
As Friedman puts it, “Rituals shift our focus on behaviors from being ‘episodic’ to ‘systematic.’” He recommends that every staff member, from the executive level down, routinely participate in rituals designed to reinforce company culture. And for people to get the most out of them, he suggests having the rituals focus on one behavior at a time.
Two powerful culture-strengthening rituals that any company can implement are:
- A weekly message. Since organizational culture stems from the founder or CEO’s perspective, Friedman suggests that the company leader send a weekly message with insight about a specific behavior. These emails (or even videos) help employees better understand the leader’s perception of the behaviors and demonstrate that culture is a priority.
In time, the leader should enlist other staff members to contribute weekly messages about the behaviors. As a company grows, this is a highly effective way to get everyone engaged in thinking and sharing their thoughts about the same topic.
- The first agenda item. A more intimate process is to begin each meeting, team huddle, or training session with a brief discussion about the behavior of the week. Each conversation is unique to the group involved, but everyone in the company will be talking about the same behavior all week. With this ritual, the culture is simultaneously reinforced in small groups and across the company.
The ritualized practice of behaviors will significantly improve even a small organization’s operation. But this process holds even more significance as a business grows. Companywide rituals provide a shared experience no matter where people are working.
Select People Who Fit
One of the biggest challenges of a growing company is acquiring additional staff. Unfortunately, leaders expanding their businesses often make the mistake of filling positions as fast as possible to meet demand. That works in the short term, but rapid team scaling can be a costly practice. Often, people hired hastily may not be good fits for the prevailing culture.
Accelerating the hiring process can lead to two adverse outcomes:
- Rapid Turnover
Employees recruited too quickly may not have a sincere appreciation for what makes the company special. These people are always looking for new opportunities and are less likely to stay on board.
The Work Institute’s most recent Retention Report cites that in 2019, close to 40 percent of employees who quit do so within their first year with an organization. The pandemic has pushed this number even higher.
Beyond the high financial cost of turnover, poor retention dilutes company culture. It’s much harder to maintain standards of behavior if the workforce is constantly changing.
- Disruptive Behavior
Quick hires also have more potential to be bad apples. Significant problems can surface when employers don’t take the time to discern whether candidates can align with their company’s culture.
Being a cultural fit is not the same as having the necessary job skills or training. A highly qualified job seeker can be a disastrous addition if they decline to abide by the company’s behavioral norms. It only takes a few strong-willed disruptors to erode the culture carefully established by the company’s leader.
While it may be possible to convert some people not initially inclined to blend into a culture, the process requires a lot of time and effort.
Why not pour that energy into selecting people who have the potential to carry the culture legacy forward as the company grows?
The Perpetual Company Culture
Successful leaders may feel nostalgic about the early days when they were forming their companies. But they should never regret growth and wish they could turn back the clock because they couldn’t preserve their organizational culture.
Properly planned, a founder’s visionary culture can expand with their business. In fact, some of the world’s largest companies have remarkably cohesive cultures, including Ritz Carlton, HubSpot, and Southwest Airlines. But exceptional company cultures don’t happen by chance; they are deliberately designed and nurtured.
David Friedman’s book, Culture by Design, describes his innovative and practical eight-step process to develop and sustain a robust corporate culture. Veteran Vistage Chair Bud Carter recommends it as “mandatory reading for anyone wanting to lead their enterprise to the next level.”
A free, two-chapter download of this valuable resource is currently available.
Acclaim for Culture by Design prompted Friedman to create the CultureWise system, making his process even more accessible. This “turnkey operating system for culture” has helped leaders across North America reinforce their companies, providing them with a solid foundation for growth. Learn more by exploring the website.
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