Culture eats strategy for breakfast - how to create a culture that supports best your scale-up company? Throughout this article, we will share with you the 10 most important actions we recommended to scale-ups’ Founders and Owners at @theScaleUP Fest in Budapest.
Recently I visited the owners of a company who just signed a deal for a major investment and we agreed it was now time for them to get that really good coffee machine for their employees. But we knew also that there was much more to do to build and reinforce in their company culture to further engage their employees into their growth journey than acquiring a good coffee machine! Let’s discover together what else can be done!
What is company culture?
It is the HOW you do things within your company - towards your clients, partners, vendors and towards your employees. It is how you hire, what kind of questions you ask on the interview, who you involve in selecting new collaborators, how you onboard newcomers, how you share information within your company and most importantly how you make decisions.
At the origin when you grow an idea and create a company: you do it with people close to you- your friends, university dorm mates, family members or people you already worked with. With these people, it is easy: you share a common mission or vision and you have a common background, believes and shared history. Lots of things flow naturally without even talking about it.
What happens when you grow bigger?
As your business grows you will outgrow these circles. What happens when your old mates, your family, former colleagues, university circle’s skills, time & financial resources are no longer sufficient to sustain your business growth? When you grow organically, the pace leaves you time to learn, experiment, make mistakes and learn from it. When you get a major investment, your possibility to expand grows exponentially and those learnings need to happen at a much faster pace.
We usually consider businesses reach a major crossroad around the jump from 30 to 50 people. This is typically the moment where you start feeling that the way you used to do things becomes a limitation to your growth and to the smooth functioning of your business. This is especially true if you grow regionally and people can no longer simply hang out at that expensive coffee machine to informally clear questions and get decisions made.
When you scale-up, you truly have to re-think/re-design everything.
What is that everything?
- How are you going to strategically position your product/service?
- What are your value-creation processes?
- How will information flow and decisions be made?
- What are the actions/behaviors you want to reward?
- Who are the people you will work with?
The answers to these questions will define the efficiency and the culture of your company.
At this point of your growth you have to make conscious decisions on how things are going to be made in your company and very importantly on how decisions are going to be made. Will you go for a centralized decision-making set-up: meaning decisions made at the top and implementation done by the people below? Or, will you opt for a set-up where decisions are made by the people on the field, close to the customers and the management will be there to harmonize the efforts and directions of the self-managing cells?
You could ask: Which one is better? The answer is: the one that fits with your company Purpose and the strategic positioning of your product/service. If you have your product manufactured in China and the sales force in the USA, or you run a Franchise system: you might still opt for the centralized decision-making. If you are offering an ideation platform with consultancy services, you need lots of adaptability to your clients‘ needs, or if you are in a retail business, you rather need to keep the decision making close to the client-facing units.
So what is a good culture? The one that makes sure your company fulfills its Purpose every day.
Where to start?
1. Start with yourself. Be the change you want to see. What and how you did things yesterday will no longer work tomorrow. Do not fall into the Founders trap: believing you can keep doing everything you used to do so far by just doing a lot more of it. Start breaking down your own tasks and consider creating new roles in the company: hand them over to the professionals. Hire that HR person who will be lot better and efficient at hiring and firing than you’ll ever be.
2. Trust others, like you trust the nursery teacher of your kid: she will never love it as much as you do, but she is trained to teach, inspire, challenge your kid in a way you never did.
3. When you re-design it’s about the work, not the people. But at the end, it will have people implications: sometimes it will mean letting go the people you started with.
4. Create meaningful roles, not jobs. When hiring make sure people understand how they can relate to your company Purpose. Then you will not have to motivate them. You’ll be better with people sharing the same values and purpose than the ones of your organisation than with the best expert in the field.
5. Know what behaviors will move your business forward and represent a culture you believe in. Make sure those are the ones you reward and recognize.
6. Make out of your redesign process a conscious process and a constant topic: the way you will handle it will determine if you have a centralized top down set-up, where people wait for orders or a decentralized set-up where people come up constantly with ideas & suggestions.
7. Involve, involve, involve! Listen, listen, listen!
8. Do not copy. Get inspired and create your own set-up. Do not implement some other companies’ ways of doing things. Build your own consciously!
9. Make mistakes, learn from them, this is essential: keep iterating fast! Create a new way of working and start doing it as you go and make sure you do not wait a year to collect feedback and adapt your design. Keep regular touchpoint with your people - on or off line - where you all talk and learn not only about the what you are working on, but also about how things are done and working.
10. Think in a community not employees: A community is a group of people who agree to grow together. Keep your community and each member in it growing. Then your company will grow too!
Elvira Kalmar:
She has 20 years on the field of developing companies from the start-up phase all the way to big multinationals. She is also one of the founders of KAPTÁR community office in Budapest and Maidan Consulting, a boutique consultancy company for SME-s. Elvira is the first Hungarian holding the international Certified Organisation Design Professional title.
She shared her professional thoughts on this topic at @thescaleupfest in Budapest with the background of selling off her shares from KAPTÁR when she became the Founder who limited growth, from the experience working with fast growing SMEs scaling up and some succeeding, some failing big time.
If you would like to learn from her how to (continuously) redesign your company and support its evolution, check out her Go Beyond Project: Native in Change courses in Hungary, Switzerland and Belgium. www.gobeyond-project.com