Culture is often thought about as this ethereal, ambiguous concept which represents how people work together in an organisation. But to define culture in a more practical manner, it shows up as the collective behaviours and ways of working within teams and typically comes from the top of the organisation – through leading by example.
At the early stages of an organisation’s life cycle, culture is typically implicit and forms naturally – usually due to the relative closeness of Founders and Founding team members in a small enough group.
Given the implicit nature of culture, this blog will explore why and how culture must become more explicit through growth, as well as identify the challenges most (if not all) organisations face when growing and how culture plays a role – whether that’s from startup phase to scale up and beyond, through fundraising rounds or through acquisitions… the impact is the same.
The Implicit Culture of Small Organisations:
In smaller organisations, culture takes on a dynamic, implicit nature, intricately woven into the fabric of the company, in stark contrast to the often more formalised cultures of larger corporations. In these intimate settings, culture is typically bound to the vision of the founders, becoming a living entity rather than a defined set of rules in a handbook. This founder-led culture, shaped by the shared values and aspirations of those who laid the foundations, permeates every aspect of daily operations.
The implicit culture in smaller organisations brings forth significant benefits, creating a sense of coherence among team members as they find themselves aligned towards common goals. This shared vision not only fosters unity but also promotes agility, enabling the organisation to swiftly adapt to the ever-changing circumstances often faced by smaller organisations. The founder-led culture further translates into a more personalised employee engagement, wherein team members develop a deeper connection to the company’s mission, fostering a sense of belonging that proves elusive in larger, more impersonal corporate settings.
Illustrative examples, such as Patagonia’s commitment to environmental stewardship under the leadership of Yvon Chouinard, underscore the impact a founder’s vision can exert in shaping enduring organisational cultures. Examples like this serve as testaments to how founder-led cultures not only contribute to the success of smaller organisations but also drive collective achievement through a shared commitment to values and a cohesive vision.
The Dynamics of Organisational Growth:
As an organisation undergoes rapid growth, a dynamic multitude of factors reshapes its intimate, founder-led culture. Fundraising rounds, crucial for sustaining expansion, introduce external influences that may challenge the preservation of core values. Surges in headcount
and expanded operations add complexity, requiring a careful approach to accommodate diversity without diluting the organisational essence.
However, rapid growth poses the risk of eroding the implicit culture closely tied to the founders’ vision. External funding and diverse talent may inadvertently shift the focus away from foundational values, jeopardising the distinctive identity that fuelled early success. Maintaining the implicit culture during rapid expansion demands strategic foresight, emphasising the need to prioritise foundational values amidst the challenges of scalability and market demands. The journey from a founder-led entity to a rapidly growing organisation necessitates a delicate balancing act, ensuring that cultural identity remains a driving force amid the pursuit of expansion.
The Need for Explicit Culture:
As organisations grow, the imperative to make culture more explicit and intentional becomes increasingly critical and clarity becomes essential to ensure that every member comprehends and aligns with the shared values, vision and behaviours.
The challenges of maintaining a consistent culture intensify as the team grows; with increased headcount, diverse perspectives, and potential geographical dispersion, there’s a risk of dilution or misinterpretation of the original culture. This necessitates a shift toward explicit cultural articulation, providing a clear framework for behaviours, expectations, and shared norms that transcend the physical boundaries of a smaller, tightly-knit team.
An explicit culture serves as a guiding force during growth by providing a blueprint for decision-making, collaboration, and employee engagement. Clearly defined values act as a unifying force, fostering coherence among team members despite geographical dispersion. This intentional approach ensures that as the organisation expands, the cultural identity remains cohesive, contributing to a sense of belonging and shared purpose among a larger, more diverse workforce. In essence, explicit culture becomes a strategic tool, aligning the collective efforts of a growing organisation and fortifying its identity amidst the challenges of expansion.
Conclusion:
In conclusion, the journey of organisational growth unveils the critical importance of transitioning from implicit to explicit culture. As teams expand and diversify, the need for a clearly defined cultural framework becomes paramount. While the implicit culture of smaller organisations may have fuelled initial success, articulating capabilities, behaviours and expectations explicitly becomes a strategic imperative during rapid expansion. This deliberate approach not only addresses the challenges of maintaining a consistent culture but also provides a guiding force for decision-making and collaboration.
Image credit: Emily Park
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