Building culture is often a matter of timing — that is, when to make certain decisions around people. When should you hire a full-time recruiter, purchase an HR system, and write down the critical components of your culture (your core values)? All of these decisions will significantly affect your current and future employees’ experiences.
As you might guess, there are no definitive answers to these questions. Timing often depends on the relative strength and experience of leadership. However, with that in mind, here are the top 3 milestones to consider when scaling quickly:
Milestone 1: You have no more friends to hire (around 30-40 employees)
What you need to do: Define yourself— write it down!
Many startups begin as a few close friends that came together around a great idea. They build an MVP and get some traction, then need more hands. The recruiting strategy at this point is fairly simple: “Who do we know that is smart, nice and would like to join us on this dream of ours?” Push the easy button, you have your first hire.
This process can go on until you get to around 30 employees. Eventually, you run out of friends to hire.
This is an important time to make sure that you have formalized your beliefs and behaviors. That means writing down all those things that you and your team just “know” because you’re all friends and have worked together for some time.
This may seem awkward; worse, it may come off like you’re creating bureaucracy that will destroy the startup element of your company. But what you are actually doing is defining your culture, so that every new person that comes on board can clearly understand it (hopefully during the interview process). They then can determine whether their own personal beliefs and behaviors align with yours.
This should go beyond the obvious principles of what you do on a daily basis or what your product is. These are real core concepts that have developed organically but maybe haven’t been articulated just yet. What to consider? Purpose: why do you exist? Mission: What’s your goal? Guiding principles: How do you behave? Philosophies: hiring, compensation, promotion, performance, etc.
This is a serious but fun process. Most importantly, it must be authentic.
Milestone 2: When you can’t talk to everyone in person every day (100+ employees)
What you need to do: Build an intentional communication plan.
All of a sudden you can’t talk to everyone in a day. You can’t get the whole team in one room for a standup. You start asking yourself, who is that guy and does he work here? This is the moment where you realize that you are running a pretty big company and all these people’s livelihoods are dependent upon the company’s success. At this point, it’s critically important that you find a way to effectively communicate with everyone in a clear, authentic, and transparent way.
It may seem tedious, but we recommend you write down your communication plan. Include: Cadence (how often), Content Type (i.e. company performance vs. recognition); the culture “Constant” (which component of your culture will be supported in this communication) and “Tangible Connectedness” (how does everyone’s individual job connect to your mission and purpose). If you don’t make a plan, then your communication will be sporadic and fall off as a non-priority item.
Milestone 3. You’ve brought in your first outside executive
What you need to do: Proceed slowly, cautiously, and with intention.
As you grow you will have to consider bringing in an outside executive or leader, someone with a particular skill that you and your co-founders don’t have (a CFO, CMO, etc.). The process by which you find, select and onboard this individual will have a significant impact on your culture. Even more so, how you communicate this decision to your team will have long-lasting implications on your early employees.
Bringing in a leader from the outside will undoubtedly cause anxiety, and possibly resentment or negativity. The most level-headed, smart individuals may act completely paranoid and irrational in these scenarios. This is called “amygdala highjack” — it’s a fight or flight response where the emotional part of your brain has an immediate, overwhelming emotional response that you later realize was inappropriately strong. The good news is that this bomb can be calmly diffused with some careful planning and communication.
Really get to know the person before you hire them — be creative! Get outside the office, go on a run/bike ride together or meet their family at happy hour. You want to get to know the genuine person, not the resume. When you talk about your culture, purpose and values, what kind of reaction do you see? Do they truly care about the same things or do they just want the job? Trust your gut on this one.
Next, carefully plan the transition with your team. Clearly and transparently communicate to the entire organization what this new leader will be doing. Often during these transitions the CEO doesn’t want to get anyone upset, so he doesn’t effectively communicate. This is a huge mistake — it causes ambiguity and inevitably puts the new leader in the position of having to explain themselves to the very people you didn’t want to offend, which infuriates them even more. Again, make a plan, a checklist, and have that courageous conversation.
These are just a few of the milestones that can affect a company’s culture as you grow, but they are all imperative. They deserve a plan and special attention just like any other business plan. It’s easy to keep your head down and focus on the product, sales, and service as you blow by these milestones, but doing so could significantly damage your culture. And at the end of the day, you’re going to want to build a company that your people can truly believe in and be proud to work for.
Chad Strickland is a human capital executive, attorney, speaker, author, and thought leader. With a 20 year career which transitioned into a senior business executive with one of the mot successful and highest growth speciality retailers in the country, Chad was responsible for the most valued aspect of the business model: people and culture.