People: How do you deal with culture change as you grow beyond the founders?

Tips on evolving company culture as it grows beyond the founding team – from the 2017 series of Threads discussions.

Discussion host: Peter Cain, growth and change consultant at Anamosys

Context

It’s natural for the founders who started the business to experience a mixture of feelings as they prepare to grow the team. With care, the team growth can both build upon the founders’ values, and bring a positive addition to the company culture.

What you offer as a start-up

People who are attracted to early-stage businesses aren’t as motivated by the usual promotion ladder of increasingly senior-sounding job titles. Rather, they relish a diverse career journey where they can make up the map.

Adding a layer of management

Coach your managers to be your proxies, sharing the company’s values and beliefs with their teams just as you do with them.

Communicating that the founders plan to exit without communicating a clear and reassuring roadmap can be risky.

How the exit plan is received can depend on the culture you’ve built and the plans beyond exit. A new owner may bring fresh investment, improved structure, greater financial security, and better benefits as the business matures.

Making the business ever less dependent on the founders, by getting the right people and processes in place reassures the team that the business can continue to flourish once they exit.

Most VC’s will look for a return on their investment within three to five years which might mean a shorter term perspective going forward.

Retain and grow with your best staff

Treat everyone is an individual. Take the time to understand each person’s unique values and aspirations so that you can open the right doors for them.

Treating people the same is not the same as treating people fairly.

Don’t expect senior engineers to automatically want to become middle managers.

Retain the skills and knowledge of your best engineers by creating a progressive culture in which people are paid what they’re worth, and not just according to their job title. Let seniority be set by the peer group as people become the go-to person for their knowledge and become a model for others. 

Pay and perks for start-ups

Until the company is making money, it can be hard to justify a culture of cash bonuses.

If you can’t offer equity, or cash, offer people incentives that don’t cost, like interesting work opportunities, real involvement in what comes next, and a supportive culture.

Over equity, most engineers will choose better equipment, or other improvements which allow them to improve their craft and output.

Most engineers, except perhaps those aiming for management, aren’t motivated by equity. Provide a clear and attainable exit plan, from which your engineering colleagues can realistically benefit from the journey, whether or not you ‘make it’.

Engineers better relate to business growth and improvements when these are expressed as a percentage, rather than as KPIs or revenues.

Hiring the right attributes

All businesses need solid foot soldiers. They are the ones who keep the wheels turning day-to-day. So accept those people who are happy with their lot and only commit to the 9-5.

Equally, managing a team made entirely from the ambitious demands a lot of time and leaves nobody to carry out the day-to-day.

Growing the team

Take a risk on people, give them things which will be a healthy stretch; their performance is usually better than you might fear, or, if they fall short, the outcomes aren’t nearly as disastrous as you might think.

When one of your people is seeking promotion, map out the new role and let them try it for a while. This helps them discover whether it’s within their reach. Let them put one foot through the open door first, to try out the new role, and for you to try out them.

When hiring in someone new, ‘above’ an existing person, communicate clearly why this is happening and how this benefits the function, helping them appreciate the new hire.