Why culture needs to be part of your startup scaling plans

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.

What are some of the good practices to scale culture?