Culture is key to scaling. According to our latest research report, culture is one of the most important success factors to raising a Series B with 69% of founders and revenue leaders considering it impossible to achieve Series B with a “toxic/corrosive company culture”.
Given headcount will likely double between Series A and B, how can CEO-Founders maintain a successful culture? By focusing on themselves, new hires and existing staff.
Until Series A, culture is usually about working hard and having fun in a small dynamic team, but when companies scale and the headcount grows, CEO-Founders must adapt.
This starts by looking in the mirror. Culture flows from the top down and our research found that the culture embodied by the CEO-Founder has the greatest impact on company culture than all other factors. Post-Series A, CEO-Founders should therefore reflect on the culture they demonstrate by completing a 360° assessment of themselves and the organisation, while also analysing what aspects of culture drive revenue success to Series B. Armed with this information, the CEO-Founder can both enhance and compensate for their own profile via new hires. For example, our research found that a number of cultural characteristics were present in many successful A to B companies:
- Openness and transparency (supports learning and communicating)
- Versatility (supports adapting)
- Humility (supports listening)
- Empathy (supports understanding)
2. Hire the right attitudes and behaviours
Companies often ‘blitz scale’ with a raft of fast hires that compromise the existing culture and damage the company’s scalability in the long-run. But new hires don’t have to threaten culture, they can enhance it.
Using the results of the culture analysis, CEO-Founders should look to hire individuals that have the right attitudes and behaviours (versus skills and knowledge) that complement their profile. Not only can you develop skills quicker than teaching behaviours, but hiring someone with the right personality will enable them to grow into the role, collaborate with colleagues more effectively and remain motivated for longer (and therefore minimise churn).
What’s more, our research found that attitudes and behaviours have a large and immediate impact on culture, whereas culture has a relatively small impact on a person’s attitudes and behaviours.
“For a company trying to scale between Series A and B, we would almost always recommend going heavy on the weighting for behaviours and attitudes (which is linked to culture) and less so on skills and knowledge.” Matt Bradburn, Co-Founder, People Collective
3. Reinforce culture in existing personnel with routines
Culture is a fluid entity that is constantly evolving with the business. As you move from CEO-Founder autocracy to a process-oriented meritocracy, it’s crucial to constantly reinforce the current culture among existing staff through approach and communication.
According to our research report, creating routines and hosting training sessions are the second most important factor for maintaining a successful culture, be it a lunchtime lecture series focused on topics aligned with the company’s values or weekly ‘office hours’ / drop-in sessions with senior leaders. CEO-Founders can also create formalised culture ‘rules’ and reinforce values through public recognition, benefits and remuneration that encourage certain behaviour.
However, culture encouragement relies on communication – both explicit and implicit. If nothing is communicated, companies run the risk of leaving a culture vacuum that fills with junk, so if in doubt, it’s better to over-communicate than under-communicate.
“A metrics-based approach removes the subjectivity involved in measuring and optimising performance, so from a cultural perspective it can give you a bedrock for meritocracy and honesty and openness.” Neil Weitzman, Scalewise Scale Expert.
Don’t forget culture
When scaling from Series A to B, there are four main people pillars: hiring, training, coaching and culture. A core part of a successful scaling strategy, culture should not be ignored and left to chance. For more advice on maintaining a successful culture, download our research report: How to get from A to B with the benefit of hindsight.