First, a story: two years ago, one of the most seminal moments in the start-up I was working for involved furniture. Our scrappy little company had decided to finally scrap the ping pong table in the middle of the office and replace it with some sensible lunch tables. Despite no one ever using the ping pong table, people FREAKED out. Like totally freaked. And, I can understand why. We were going through a period of significant growth and the ping pong table was a symbol of what used to be - the 'good ol' times'. The employees felt like we were at risk of losing our start-up culture and becoming just like every other big company (or 'big co.' as they called it). Was the ping pong table a leading indicator of our start-up culture’s demise?
For many of us who have worked in start-ups, we’ve had that sinking feeling of things changing. Our beloved little team has grown and stuff just feels different. A few extra processes get put in place, a senior person maybe gets hired above us, all of a sudden there’s a formal expense policy, and we start to wonder…are we becoming “big co.?”
Having worked at both very large (250,000 people!!) and very small companies over the years, I’ve observed that start-up culture and big co. culture are not correlated with size. I worked at a 1500 person organization that was innovative, non-hierarchical, encouraged proactivity and risk-taking, and just all-around quirky. Despite its size, the company had the close-knittedness, family feel that many of us love about working in start-ups. On the flip side, I worked for a 12 person organization that was riddled with unnecessary bureaucracy including a “rule” that all employees must use the same type of paper fastener (not a paper clip, not a staple, not a clasp – but an obscure red string thingy that seems to be used by no one other than British diplomats). There are clear factors that make a tiny organization feel like an enormous one and vice versa.
You’re probably thinking “All that is well and good, but what does start-up vs. big co. culture have to do with me being a manager?” Well, as a manager in a start-up or fast-growing organization, your team members will experience these feelings of change. Your team may be anxious, angry or demotivated by these changes to your organization's culture. Thus, a big part of your job as a manager is to help your team understand these experiences. As a manager, your responsibility lies in both helping your team navigate changes as well as helping the organization maintain the positive aspects of its start-up culture through its growth.
Let’s first talk about the three big factors that I think most make employees feel like their small startup culture is changing…
The Three Tipping Points That Drive Employees to Freak Out About the Company Getting Too Big
1. No Longer Having Access to All the Information – the young, early employee sits in all of the meetings when the company starts out. The CEO tells him everything and he is aware of all of the decisions that are happening. The company expands, meetings become too big, and the early employee is left out of meetings. And then, a big decision is made that the employee is not aware of. Freak out ensues.
2. Getting Layered On – this tipping point is the WORST feeling! An early employee gets someone layered on top of him…he used to be reporting to the CEO, the company grows and needs someone with more experience, and a more seasoned exec comes in over him. The WORST. (Even worse when there is a title change...)
3. Processes Where Once There Were None – early employees are used to lots and lots of freedom. No one is too worried about company spending, vacation tracking is a mere suggestion, and people are given reviews when the leadership feels like it. Then, an expense policy sneaks in, a performance process is implemented, and boom…everything starts to feel really formal. Freak out ensues again.
[NB: Don’t worry – we’ll explore each of these factors in future blog posts given how much they impact your people.]
Okay, so what can we do to make sure that we have the good parts of a small, start-up culture despite the inevitable growth of the organization? Well, it's not easy to hold onto every aspect of your culture (both good and bad) as you scale. And, it's hard because of inherent tensions that exist as a company gets larger. As such, here are the four main tensions that you have to navigate to ensure your organization holds onto its start-up culture while it scales.
The Not Immediately Solveable Tensions That Exist When Companies Grow
1. Increasing diversity while maintaining a tight community: growth is so good when it means people join who have different experiences, ways of thinking, and approaches. But, that makes it hard because homogeneity drives strong feelings of liking and closeness. So the challenge for an organization is how to maintain that feeling of close community while building an organization that doesn’t all think and act the same?
2. Building process while avoiding unnecessary bureaucracy: for students of Max Weber, you know that bureaucracy is not inherently bad. It creates order, structure and allows society to function. But in a start-up, we want to remain nimble and spend time on the highest value activities, not on filling out forms or pushing around paper. Thus, the tension in growth lies in engineering processes that are simple and necessary (and give your teams the structures that allow them to be productive and creative), while not making process for process sake.
3. Stimulating innovation, creativity and risk taking while ensuring sustainability: this is a tough one. As a start-up, you want your teams to take risks, but you're resource constrained, your costs are ballooning, and you have real customers (and investors!) you need to make happy. You need everyone to have a singular focus, but that means that you might lose the creativity and innovativeness that made the company so fun to be a part of in the first place.
4. And lastly, encouraging individuality while avoiding favoritism and arbitrariness. Often small companies are rife with favoritism. Growth brings process and objectivity, but that can also mean it brings a feeling of being a cog in a wheel. (Leveraging tools like individual development plans may help with this feeling!)
So friends, as your organization grows, as a manager, your job is two-fold: you need to be aware of and manage your employees' anxieties and feelings of loss that change brings; and, you need to help navigate the tensions that allow a company to feel small, nimble and start-up-y despite scaling in size. The first step in doing that may be to just discuss these changes with your team. Acknowledge what change and growth bring, and share with them what makes it challenging when a company grows. Oh, and the second step might be to bring back the ping pong table.
Your team is going to feel a sense of loss as your organization grows. The organization starts to feel less personal and more like a "big corporation".
As a manager, your responsibility lies in both helping your employees to understand why things are changing (and allaying their anxiety) as well as helping the organization maintain positive parts of its start-up culture despite growth.
For employees, a feeling of culture loss occurs when an employee no longer has access to the information or decision-makers as they had before; a more senior executive is brought on above them; or processes or policies are put in place that once didn't exist.
The hard part about scaling your start-up culture comes down to the following tensions: diversity versus community; process versus bureaucracy, risk-taking versus sustainability, and individualism versus objectivity.