Photo credit: Alexandra.

You and your founding team have sweated it out and got to a point where you have found great product-market fit and a repeatable sales process. Once you have got these out of the way, scaling becomes the next big focus.

The founding team and the board start having intense discussions about the risks of scaling too early and the opportunity costs of not scaling at the right time. While a lot of these conversations focus on honing the sales process, automation, architecture, and customer experience, culture doesn’t get the attention it deserves. If ever it does, it’s shallow. There are three reasons as to why this happens:

• Startups that are ready to scale suffer from the tyranny of the urgent, as Robert Siegel speaks about. You have a product to build, markets to get into, and numerous operational issues to take care of that you have no time to think proactively about culture.
• Startups believe culture evolves on its own. This might have been true when you were five-to-10-strong and culture or “ways of working” was in the air. Everyone knew how things worked. This is not true even as you scale to just 50 people.
• Startups fail to differentiate perks from enduring values and hence believe that they already have a great culture in place.

Why focus on culture as you scale?

There are many reasons why you should. Here are the major ones:

Understanding group thresholds will help you build great teams. 

There are critical group thresholds that have a huge impact on the behavior of individuals and teams. For example, Christopher Allen argues that the Judas number or 13 “is one of the points where groups can change behavior and risk becoming dysfunctional.” There are other thresholds at 50, 150, and so on. As you scale, you need to be deliberate about the investments you make to avert dysfunction from seeping in.

Culture debt is incredibly expensive to pay off.

Every time you compromise on your values, you allow culture debt to accrue. Every time you are silent with jerks and dysfunctional behavior in your startup, you are sending implicit messages on what is OK and what is not. Wriggling out of this when you are a 100-person company will be a nightmare.

Happy employees precede happy customers.

In our obsession for creating great customer experiences, we often ignore employee experience. Having happy, engaged, and aligned employees is a prerequisite for having happy customers. Clearly, this needs more than just perks.

Make quicker and better decisions.

If speed and responsiveness are traits you value, have a solid work culture by removing ambiguity in decision-making processes. Everyone implicitly understands what is OK and what is not and this short circuits the need for taking approvals and permissions.

Humanize your workplace.

When you take a proactive approach to building a great culture, you end up building a set of shared values, beliefs, and practices. These show up as trust, transparency, autonomy, and collaboration, all of which are key elements of a humane workplace.

What are some of the good practices to scale culture?

While there is no set path to scaling a culture, there are a few good practices that you could experiment with and adapt. Here are some that could help:

The founding team should guide everyone into the culture.

This is perhaps the most important one. The founding team needs to keep telling stories over and over again to reinforce the mission and values. This is all the more critical as you scale and do not have a chance to interview every new hire personally.

GitHub, for example, used to have a three-point agenda for their weekly all-hands meetings. First, new hires get introduced, then they celebrate the releases that happened the previous week and the people responsible for that, and the final agenda is about their values and the philosophy behind them. If you have distributed teams, this becomes even more important.

Understand the difference between perks and values.

A lot of startups that do think they have a great culture usually mean they have ping pong, snooker, free food, and team outings. Of course, all of these are important but they are what they are—perks. Values are far deeper and more enduring.

Bring values to life.

Many startups do write up a mission statement and a set of values but fail to go beyond that. Mission and value statements end up being a poster on the wall. The challenge is to bring values to life in everyday work practices.

Let’s say “respect” or “humility” is a value. How can you be sure that these are actually evident in meetings or while giving and receiving feedback? Map them onto day-to-day operations then identify a set of micro-behaviors that augment them.

Experiment with new organizational structures.

You’ve probably read about squads at Spotify and the experiments with Holacracy at Zappos. Some of these have worked remarkably well but others didn’t really make it. Nevertheless, it is important to explore some of the emerging thinking in this space.

One of the areas I’m personally enthusiastic about is self-management made popular by the book Reinventing Organizations by Frederick Laloux. Companies like Buurtzorg, the Dutch healthcare provider which has over 8,000 nurses with no HR department, and FAVI, the French manufacturing company with no central staff functions, are great examples of the possibility that self-empowered teams can bring at scale.

Whether you are doing something about it or not, you have a culture and it has a huge impact on almost all aspects of your startup. Being deliberate about the sort of culture you want and laying the foundation early on would help you scale gracefully.