Congratulations, your startup is scaling. Your team of 20 is quickly growing to 200. You’re making enormous investments in the product to make sure it can support user growth and scale elegantly – because you recognize that what has made your product great up to now will break during the next stage of growth.
Are you being as intentional about investing in your company’s culture, so that it scales with your product and business model?
Your assets can become your liabilities.
Culture is a learned way of solving problems based on shared experiences of the group. It’s how decisions are made and your company values are lived out. By this definition, a strong culture helps you successfully deal with problems you know and have encountered before. But it can become a liability when you’re faced with a set of completely new issues – like, the executional and operational challenges of scaling your company from 20 to 200 people.
Culture needs to evolve as the company grows, and it’s really hard to get that right. Your early employees self-selected into a particular culture and they have been successful operating in that set of norms, values and processes. So when the time comes to drive cultural change, we focus on the wrong things.
We change visual manifestations of our company culture, not culture itself.
If we want to drive more professionalism into a startup, for instance, we institute stricter hours, get rid of nap rooms, ask people to dress more formally, etc. But these are all artifacts (or visual manifestations) of culture. That doesn’t change how and why decisions are made and priorities are ranked by employees.
Real cultural shift might entail more painful cuts – replacing someone from your founding team or redrawing the org chart. However necessary that might be, it’s much easier to focus on managing what we can see to try driving the new organizational behavior that we want.
It’s ok to iterate.
How often are you testing your product, fixing what’s broken, and planning for the roadmap? I love the advice that Roelof Botha, a partner at Sequoia, gave to Fred Wilson years ago: VCs should help founders think of their company as a product and build it and shape it with the same passion and care.
Google took that approach in the early days as the company began to scale. Larry and Sergey got rid of managers and established a completely flat organization to break down barriers, accelerate idea development, etc. They wanted to preserve the collegial ethos of Google which had made them successful to date. But that experiment lasted only a few months as every issue ended up escalating to Larry. Recognizing the need for hierarchy, the founders began to carefully introduce management layers – to extremely skeptical engineers resistant to structure – by testing and proving the impact of good managers in a data-driven, analytically rigorous way. Google leveraged its product development process to iterate and drive tough cultural change.
You can’t be involved in every decision as your startup scales. And your team’s bias will be to solve for a new set of challenges based on what’s worked to date. It’s critical to evolve your culture, as you would your product, so that it remains an asset and continues to guide people to make good decisions.