How to scale company culture: 4 counter-intuitive truths | Xquadrant

How to scale company culture: 4 counter-intuitive truths

I spoke to a client this week. He’s the CEO of an incredible high-growth tech company that’s just raised around $200M in financing. We started to explore what the next level looks like for him and for the firm - he’s able to switch gears from fund-raising to accelerating growth - and it’s clear that there’s some major expansion ahead.

We explored several topics, and quickly got on to the critical issue - how does he grow the company in a healthy way, and scale company culture as new offices open and new recruits come on board, without diluting the very elements that made the company successful in the first place?

It’s a wise question to be asking.

Culture is what happens when you’re not looking. It’s the difference between a high-performing environment where people want to give their best, and mediocre, humdrum workplace where people do the minimum.

Creating a consistent culture is important because it creates a shared sense of belonging and it reduces the risk of silos and divergent decision-making. Simply put, it allows a company to preserve the factors that makes it successful.

But when you’re growing fast, how do you scale a culture?

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The advice out there is hard to argue with but not particularly actionable. For example, HBR identifies 6 ways to build and scale company culture:

  • Start with purpose.
  • Define common language, values, and standards.
  • Lead by example.
  • Embrace your frontline cultural ambassadors.
  • Seek, speak, and act with truth.
  • Be greedy with your human capital – then treat them right.

“Changing The Way The World Works, Lives, Plays, and Learns”

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And this article suggests another set of priorities:

  • Reinforce company mission and values.
  • Be transparent and communicative.
  • Hire the right people.
  • Provide feedback channels.
  • Ensure the new environment reflects culture.
  • Recognise achievements.
  • Establish traditions.

Nothing to argue about there, but not too much to answer the “how do I actually do that?” question to practically scale company culture.

In this article, we’re going to provide some concrete steps to take, but also shake-up your thinking with some counter-intuitive truths that form the basis for culture creation.

PART I. Have something worth scaling


Before we get into the art of scaling culture, we need to ask: is there anything worth scaling in the first place?

Very often clients explain to me the kind of culture they’d like to see in their organisation, but can’t point to a specific place where that culture already exists. As we’ll see, this is a problem.

So…

Slow down to speed up. Focus on incubation before scale.

Focus on transformation before multiplication.

There are two simple places you should start: your team, and your self.

Focus on the #1 team

Before you worry about propagating your culture across the firm, is it totally embedded in your senior team?

When I spoke with the CEO I mentioned earlier, the immediate priority - even before scaling culture - was actually how his executive team needed to come together as less of a collection of individuals, and more as a team.

No organisation can be healthier than its number-one team. If there are problems with trust and communication, alignment and team spirit, or ownership and execution, these cracks will propagate across the entire organisation.

Leaders define culture. And sub-leaders define sub-cultures.

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For example, there’s no point the executive committee preaching how the organisation needs to be “one company” if there’s infighting and politics amongst themselves. People smell that inconsistency a mile off.

What happens when this step of transforming senior management is skipped?

Well you often end up with ‘corporate values’ that are the exact opposite of reality! This is endemic in large corporations: when an organisation says “we value innovation and collaboration” it’s highly likely they find themselves stuck in a rut and deep in silos! No wonder people are cynical and disengaged.

IMMEDIATE ACTION: Review the health of your leadership team. Is the leadership team modelling the culture you want to transmit?

Ask yourself: If every team functioned just like the leadership team - with the same trust, quality of relationships, alignment, communication and ownership - would you be happy?

You can review the health of the leadership team in various ways:

  • I’d start by taking our 60-second team health assessment to give yourself a quick sense of where growth lies.
  • We have a more detailed team health assessment that every team member completes and that gives a rich view on what’s working and what’s not. Feel free to reach out for more information.
  • You can also devise your own questionnaire or have some frank discussions in a leadership team meeting.

NEXT STEP: Work on HOW the team works together as well as WHAT the team is trying to achieve.. Very often, we’re great at setting goals and objectives, but we don’t stop to consider the rules of engagement:

  • How does the team want to step up and work better together?
  • What are the couple of key behavioural shifts that will make all the difference?

It’s important to remember that this will not be a single event (a training session or away day) but a process that will take some time too embed.

Our “Next Level Team” programme takes teams on the entire journey, from diagnosing where the growth opportunities are and setting an ambitious vision for a new level of teamwork and performance - to actually making it happen over the course of several quarters. Behaviour change is harder than you think, and consistent follow-up is key to establish new habits.

Model the leadership culture

Now, the transformation of the leadership team often needs to start with the transformation of the senior leader. If you’re willing to change how you do things, you create the context for the entire team to step up.

As leadership guru John C Maxwell says, “the leader is the lid” on the organisation.

Just today, I was speaking with a leader who is seeking to change the culture of his multi-level organisation. He’d received a powerful insight during our coaching about celebrating the team, and wanted to ‘scale it’ so his direct reports would also consistently celebrate progress.

"The leader is the lid” on the organisation." -John C Maxwell

I need to turn that into a process, or it isn’t going to happen.

I pushed back

No, having celebration forced upon people as a formal process won’t accomplish anything. Instead, you need to become the type of leader who routinely and regularly celebrates progress - and once you model that behaviour to your direct reports you can then coach them to replicate it.

The issue here is that we know the areas that hold our leadership back - a tendency to micro-manage, say, or to be too domineering in meetings.

But knowing these areas and actually changing our behaviour in those critical moments are two very different things.

That’s often when coaching comes in. When I work 1:1 with executives we identify very specific behaviours that will lead to next-level results and do the hard work together of actually making sure these behaviours emerge at the right moment.

IMMEDIATE ACTION: Solicit some candid feedback - from colleagues, stakeholders and possibly an executive coach who can give you a bold, unfiltered view. Understand how you are undermining your own influence as a leader, and thereby preventing the leadership team from getting to its new level. When you change, your team will change.

If you’d like us to give you some candid feedback, head here.

NEXT STEP: Create a personal growth environment. As leaders we can get “comfortable doing the uncomfortable”. We’re driving big goals (“uncomfortable”) but the way we’re doing it is actually pretty comfortable to us … it’s served us in the past and we’re repeating the same behaviours. But growth never happens in the comfort zone. And if we’re not growing, our team is unlikely to grow.

Look for ways to create a ‘personal growth environment’ that keeps you learning, experimenting, and developing. This might involve taking up a new challenge or activity, deliberating mastering a new behaviour, consuming different content than you’ve done in the past, or working with new people who are playing a different, perhaps bigger game.

You may like to read Step IV - “Remix your environment” in our article on career transitions, which gives some practical steps that are relevant here.

PART II. Scale company culture… organically


Culture is caught, not taught

When it comes to how to scale company culture in fast-growing companies, plenty of people advocate for a rigorously systematic, tool-based approach. For example, 2019 Harvard Business Review article recommends:

  • Define culture in terms of clear, observable behaviours.
  • Build an accessible, digital library of learning content.
  • Use blended learning programs to scale culture training.
  • Ensure managers relentlessly reinforce target behaviours.

In the quest for speed and scale, this “programmatic” approach to culture is highly attractive.

However, whilst there’s definitely a place for providing systematic information about common values, desired mindsets and expected behaviours, culture is caught and not taught.

Organisations are organic: more like organisms than machines. So culture is transmitted through people.

Leader Multiplication

So, here are four counterintuitive ways to scale company culture that work with the idea of “organisation as an organism”, rather than going against the grain.

1. Instead of instilling values, instil core convictions

It’s hard to argue with most corporate values. “We value integrity, excellence, customer service, innovation, collaboration and employee empowerment”. Of course: what organisation values duplicity, mediocrity, poor service, stagnation, isolation and disempowerment?

Beyond their generic nature, the problem is that instilling values is largely a matter of carrot-and-stick compliance. At the end of the day, you can’t tell anyone to value anything.

In speaking with many business owners, I realised that what leaders really want is for the team to be committed to the success of the business, and truly understand the factors that will drive that success.

In other words, you need to communicate and instil the core convictions that underpin the way you want the business to operate.

One CEO I work with, for example, runs a highly disruptive start-up competing with giant, deep-pocketed incumbents. One of his core convictions is “the only safe place is to be where nobody else is”.

Another is “truly partner with our customers, and they will protect us from competitors entering our markets”. These are fundamental beliefs and ways of doing business that are highly specific to his company, but are absolutely essential for everyone to understand.

These kind of shared convictions are far more important than everyone agreeing that we should have integrity and be collaborative.

IMMEDIATE ACTIONAgree your Heroic Vision. Speak candidly with your senior team about the positive contribution that the business really makes. Beyond the financials - why does your work matter to customers or to wider society?

You may need to think several steps beyond your immediate impact to the broader impact. Several years ago, almost all of Cisco’s business was “plumbing” - providing the switches and routers that ran the Internet - but their heroic vision:

“Changing The Way The World Works, Lives, Plays, and Learns” - spoke to the broader impact of their technology - and was a real inspiration to Cisco’s employees, helping them see beyond the day-to-day tactical grind of selling networking technology.

Set your Strategic anchors. Agree with your leadership team the 2-3 strategic anchors that underpin the business. These are not strategies; they’re the principles that determine whether any particular goal, strategy or project is in appropriate for the company. Strategic anchors involve competitive differentiators and boundaries.

You typically need just 2-3 strategic anchors. Any more, and you risk losing focus and succumbing to a “smattergy” rather than a strategy. Typical anchors might be:

  • Being the lowest cost provider.
  • Being the market share leader.
  • Being the fastest to market with feature innovations.
  • Having the broadest ecosystem of partners.
  • Being incredibly customised and responsive to the needs of individual customers.
  • Remaining focused on a single product line.
  • Remaining focused on a particular geographic market.
  • Remaining focused on a particular segment (e.g. “early adopters”).

2. Instead of promoting programmes, promote multiplication

Many culture programmes seem to have no momentum, or even negative momentum. Like pushing water uphill!

Instead, take advantage of momentum and multiply its impact.

Here’s a saying worth remembering: Leaders define culture. And sub-leaders define sub-cultures.

We talked in the previous section about how senior leaders first need to model the desired mindsets and behaviours.

Now for the magic: they need to learn how to multiply these mindsets and behaviours to their teams.

In other words, your leaders need a way to take what they’re experiencing in the executive team and replicate that into their own team.

As your senior team starts to see genuine change, help them teach what they’ve learned and apply it to their own team.

To do that, you need to put language around what’s working and create vehicles for your leaders to learn, apply and then rapidly teach their own teams … and then debrief on what worked and what didn’t.

IMMEDIATE ACTION: Plan your multiplication. Beyond your executive team, identify the next teams and the next leaders to invest in. Typically, these teams and leaders will be in direct contact with the executive leadership - so the senior team can naturally start to pass on what they’ve learned.

Create multiplication actions. Look for opportunities in your exec team to practice multiplication behaviours. For example, you learn something new about the business - agree to share it with the teams. You use a framework or model to structure your thoughts on a certain topic - share it with the teams.

You have a heated debate about a topic - share the pros and cons and the deciding factor that tipped the balance. Ask yourself, at the end of each team meeting, “what beliefs, ideas, skills, knowledge, processes, values or tools did we just employ or discover that it would be valuable to share with the broader team?”

NEXT STEP: Create ‘incubation vehicles’. Multiplication is a rare art. Many leaders have learned to “climb the mountain” of high performance, but it’s another skill set entirely to become a Sherpa and take others up the mountain. This will need to be learned, and learning is always a process. What’s the training and process you need to build around multiplication?

3. Instead of aligning people, align teams

A lot of effort is spend trying to explain to individuals what the cultural norms of the company are. But culture is, by definition, a shared endeavour!

This is one reason a lot of leadership development fails. The leader comes back from a training session full of excitement and possibilities only to walk back into the same old environment. She’s changed, but no-one else has.

Instead of trying to align individuals to a set of “cultural values”, it’s far better to get teams to wrestle with questions of culture.

When teams take some time to agree the culture they want to create, and make shared commitments to live that out, the sense of ownership goes right up.

NEXT STEP: Ask teams to process the Heroic Vision and Strategic Anchors: Ask your teams to interpret how the Heroic Vision (purpose) and Strategic anchors need to show up in their team. What’s their contribution to the Heroic

Vision - and how can they help the company implement its strategic anchors? This can be done in a couple of hours. What’s important is that the whole team gets to decide, rather than the manager imposing his or her own ideas.

4. Instead of specifying behaviours, specify disciplines

Many organisations go a step further than listing values, and they articulate behaviours that each value represents. Whilst this is helpful, especially for performance reviews, such a document becomes unwieldy and hard-to-remember.

But culture isn’t created through propositions that we preach. It’s created through shared practices and habits.

So rather than abstract values or even concrete behaviours, what I find works better is a consistent set of team disciplines that govern how teams clarify their goals, collaborate together and execute on their plans.

As an example, our Next Level Team programme accomplishes exactly this. We create a consistent high-performance framework across teams, that embeds accountability, innovation, collaboration and results-focus into the very way the team operates.

IMMEDIATE ACTION:

Define the Disciplines. Agree the ‘minimum viable set’ of disciplines that each team in your organisation needs to learn.

For example, how do teams:

  • Decide and communicate their target outcomes and key results?
  • Maintain focus on strategic projects despite operational demands?
  • Debate ideas and make decisions?
  • Encourage balanced participation of all members?
  • Define behavioural standards and hold each other accountable?

PART III. Summary: Scale company culture with these 4 principles


Because culture is what happens when you’re not looking, it’s incredibly important to scale as you bring on new employees in new regions. It creates a shared sense of belonging, captures what “high-performing behaviour” looks like, and it reduces the risk of silos and divergent decision-making.

Because culture is caught, rather than taught, it needs to be seen as growing a healthy organism, not building a bigger machine. Start a team worth scaling and make sure you - and your team - truly embody the culture that you want to scale.

Then put into practice these four counterintuitive truths in order to scale company culture:

  • Instead of instilling values, instil core convictions.
  • Instead of promoting programmes, promote multiplication.
  • Instead of aligning people, align teams.
  • Instead of specifying behaviours, specify disciplines.

When leaders take this less prescriptive, more organic but still highly disciplined view to creating and scaling high-performance cultures in their organisation, we see happier, more aligned and more agile companies.

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Richard Medcalf
 

Richard Medcalf is Founder & CEO of Xquadrant. Having held senior positions in both the professional services and tech sectors, he's committed himself to improving the quality of leadership and organisational performance around the world. The way to his heart is through curry.

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