Scaling Culture in Fast-Growing Companies

By Matt Dallisson, 13/06/2019

Over the past few years, there has been a marked increase in hypergrowth companies across the globe. First coined by Alexander V. Izosimov in the Harvard Business Review in 2008, “hypergrowth” refers to the steep part of the S-curve, where industries and firms grow at an explosive pace. Businesses rapidly expand, company valuation skyrockets, and the compound annual growth rate (CAGR) hits 40%+. Human capital also grows dramatically, as employee count steeply rises to support business growth.

This sets hypergrowth companies apart from other firms, which have slower and more stable growth rates. Since they are scaling rapidly, hypergrowth firms need to quickly ensure that they have the right people and systems in place to withstand the speed at which they are growing. If they don’t, the organization can quickly fall apart.

While hypergrowth companies face many obstacles, research shows that talent is their primary growth challenge. And one of their biggest talent priorities is how to scale and maintain culture. Culture, or the underlying beliefs and values that shape an organization, can indeed be difficult to manage when a company scales from 10 to 1,000 employees. But it is possible.

Through my work in the start-up and venture-building space, I’ve seen the unique challenges founders and employees of fast-growing companies face, as well as the successful strategies used to solve them. Here are a few tips for hypergrowth firms that want to scale their culture to hundreds (or thousands) of employees across the globe:

Define culture in terms of clear, observable behaviors. Organizational learning is a social process, and employees learn by observing others. But abstract values such as “innovation,” “respect,” or “drive” can mean different things to different people. And since hypergrowth companies increase their headcount very quickly, culture can swiftly get lost in translation. Employees can live out values based on their own personal understandings, rather than what the company intends. As such, unintended behaviors are learned throughout the organization, and company values and beliefs are diluted over time.

The first step to scaling culture is to define each company value or belief into two or three behaviors that people can observe. For example, “respect” can be defined as 1) being a great listener and 2) giving equal consideration to different ideas. The output of this exercise is a clear list of the top 10-15 observable behaviors that define your culture. This has two purposes. First, it ensures everyone is working from the same cultural definitions. Second, it ensures abstract values can be seen in concrete ways. Thus, employees can more easily learn, measure, and reinforce values.

Build an accessible, digital library of learning content. Once you have the list of behaviors, ask yourself: What knowledge, skills, and attitudes are needed to produce each behavior? What content could help employees learn these, and how can it be accessible to all?

Many growing companies rely on short, in-person onboarding programs to teach employees about culture. These programs, often a few days long, are generally helpful in providing a brief overview of the company culture. But learning is a continuous process, and unfortunately, in many hypergrowth firms, culture training can slow down after onboarding day. Company resources during hypergrowth are either limited or heavily directed toward core, revenue-generating functions such as sales and marketing. Thus, support functions such as culture training can take a back seat.

For learning to be effective, it is not enough to simply “push” learning to a set of people in a closed environment. Research shows that a more open model for learning is needed: employees should be able to access and “pull” learning materials about company culture at any time, whenever they need it.

Building a digital library of content can help with this. The digital library or platform can showcase the top behaviors you want to scale. Then, for each behavior, include curated learning materials that can help employees understand and exhibit the behavior. These can be short articles, study guides, videos, online assessments, or recorded interviews. Make sure to consistently add and update these materials too. This way, even if hypergrowth firms lack the resources for robust people training, they can still ensure their employees have open and continuous access to culture education.

Use blended learning programs to scale culture training. As headcount increases, hypergrowth firms usually decide to invest more resources into employee training, so they offer in-person workshops to help employees learn culture-related skills. While in-person training has strong benefits, it can also be very difficult to scale quickly. Logistical requirements such as fixed locations and times can limit employee reach. This can be very frustrating for employees who want to learn new skills. Lack of training can also hurt talent retention, which is exceptionally important during explosive business growth.

Hypergrowth companies need to ensure that employee training can match the speed at which headcount is growing. To do this, they can utilize blended learning programs, which combines both online and offline delivery formats to scale learning. For example, instead of long training workshops, shorter in-person sessions can be combined with self-paced offline learning (e.g, study aids, recordings), live e-learning (e.g, virtual classrooms), or web-based seminars. Research shows that with the right content and mix, blended learning can be more effective than both traditional learning and e-learning alone. And for hypergrowth companies, blended learning expands employee reach dramatically, which is especially helpful if headcount is quickly skyrocketing, and lowers training costs over time, which helps preserve valuable resources during rapid growth.

Ensure managers relentlessly reinforce target behaviors. Managers are critical to scaling culture. Not only can employees model the behaviors of their managers, but they also look to managers for approval and direction. But hypergrowth can be a dizzying time for companies. Business targets are stretched, plans quickly change, and managers are busy working toward very ambitious goals. Amidst the chaos, it is easy for managers to forget they have a powerful behavior-shaping tool at their disposal: recognition.

Studies show that highly personalized recognition is crucial in reinforcing desired behaviors. While recognition is important for most companies, it is especially valuable for hypergrowth firms because it requires little to no resources to execute: it is free, very easy to implement, and highly effective in shaping employee behavior.

Remind all managers to use this tool relentlessly. Immediately recognize people for positive behaviors, no matter how simple these behaviors are. And praise doesn’t always have to be a grand public gesture. Managers can praise individuals during small team meetings, in private, or even over email or chat. What’s important is that recognition is immediate, frequent, and highly personalized. It only takes a few seconds, but it can make a strong and lasting impact on institutionalizing target behaviors.

Hypergrowth can be a challenging time for companies, especially when it comes to maintaining culture. But it doesn’t mean that culture cannot be preserved during rapid growth. By following the strategies above, hypergrowth firms can help ensure culture is effectively scaled throughout a fast-growing organization.