Objectives for 2024 – how are you dealing with the Culture vs Growth challenge?
Many small companies will be looking closely at their current strategy and objectives for 2024 right now, setting budgets, targets and aspirations. Unsurprisingly for many small companies top dead centre in their aspirations is growth; the most obvious tangible measure of success for most small companies is increasing orders with a positive impact on the bottom line. However, I’ve seen a number of companies where significant growth hasn’t been the most positive of experiences, so what are those challenges and how could you think about mitigations?
The characteristics of small companies that give them the edge in agility, responsiveness, and often value in a fast-paced technology driven world are the very same characteristics that are undermined by rapid growth:
1. Clarity of Purpose. Founders know why they started the business and what they are trying to achieve, although clearly that can change over time, and with small teams the communication of that purpose is often intuitive and well understood. As growth occurs the distance from the leadership does too.
2. Culture and values. Small teams, even those that work virtually, invest in personal relationships (it’s easier when there’s just a few of you…) where trust is more easily formed. Furthermore, culture and values are more easily established and maintained in small teams. Culture and values born of the Purpose and team character support intuitive and rapid decision making and progress.
3. Freedom to take risk. Policy and process can be enablers, but we all know it often doesn’t work like that if they are designed to cater to large organisations with multiple functions, teams and locations, and designed to reduce risks to reputation, business outcomes etc. Small companies often start with very few of these bounding documents, dealing with questions and issues rapidly, individually and intuitively. That approach cannot survive growth for long and so the company starts on a journey that if unchecked can inhibit innovation, flexibility and pace. Perhaps a clear example of how this can go badly wrong is the Ministry of Defence Joint Service Publication for Expenses and Allowances which runs to 758 pages, a terrible document that does the opposite of supporting the workers. Keep your guidance short, simple to understand and follow, and of benefit to the individual.
4. Leadership. I refer to leadership here, not management - motivating, driving and exciting the workforce, protecting and enabling them. Leadership is personal, management can be process. How well do you know you team, all by name, just by face, do you sit and drink coffee with them, understand them, and critically, do they understand you? If you are the driving force, the founding legend, the person with the future in your head, who knows more of the business than any other, then just one person one step removed is a person who might not ‘get’ what it is to ‘be on the company journey’ with you.
5. People. Every growing company suffers from resource lagging behind demand - High tempo, high reward, exciting, motivating, yes, but with that comes high stress, higher risk, and if not carefully managed burn out and departure. Small companies are able to run a much more personalised HR function and you have the freedom to reward, support and grow your people with the only limit the law and your imagination. Look after your people and they will look after you, don't change this principle as you grow.
So, what can you do, because growth is important after all, to grow whilst protecting the small business advantage you have and maintaining the culture in your organisation.…
1. Codify your culture and values, not in a glossy brochure outward facing way, designed for marketing purposes, but in an organic way designed to support your team understand how they do business and what’s important in your company. The best ones I’ve seen have been developed by the workforce, and then lived and breathed by the leadership. Do this before the company is too big for you to know and understand your whole team, and likewise they you.
2. Be crystal clear on your Purpose, why does your company exist (and try to avoid discussion of money, profit etc). Why should your team get out of bed on a work day? Try to think benefit to the customer, not what technology you use to deliver it.
3. Be clear on boundaries, roles and responsibilities as you grow, and that includes what responsibilities current employees will give up as others come into the team (including what you will give up). If you can’t answer ‘who is responsible to whom for what’, try again. Be clear on what risk they have authority to take and protect them even if they overstep a little (as long as it’s not negligent, Just Culture is a wonderful tool here).
4. Generate simple processes and normalised ‘ways of working’, allowing some flexibility, that will help new people to know ‘how things are done around here’. If there’s a way you like decision information presented, or a way you best understand data, provide templates and guidance, giving the team a chance to get it right first time. Keep your guidance short, simple to understand and follow, and of benefit to the individual.
5. Lead your people through change, be present on the floor plate, meet everyone who joins and take the time to explain to them what’s important to you, take ownership of the onboarding process. Protect the culture and ethos that brought you success. You can’t do this by email or newsletters. If you look after your people, they will look after you. Communication is critical and that works both ways, learn to listen and absorb – the larger you get the more likely you’ll have people with a different view point, embrace them, diversity of thought is a superpower.
6. Finally, if you want growth, have clear objectives for year one and a target for year 5, be objective, stretching but realistic. Ensure your strategy has clear priorities, you’ll have to choose between opportunities at some point and a decision based on well thought out prioritised objectives makes life so much easier.
At the end of the day, growth will end up with the need for you to trust and empower (the two must come together), and that results from you knowing that your team ‘do the right things’, and ‘do things right’. It’s your job to enable them to do both.