4 culture risks to factor into your business growth plan

May 16, 2022

Growth. From shy green shoots to towering oaks, it feels overwhelmingly positive – and when you’re leading a small business, there’s no such thing as too much growth. Right?

While fast business growth is a sign of success, it also poses a lot of risks. And these are risks that could end up destroying your organisation completely. After all, 70% of technology start-up failures were down to scaling up too early. Avoid that outcome by remembering to prioritise one thing: your culture.

4 risks to culture that growth businesses face

1. Disrupted company culture from lots of new hires

As your business grows, so must your team. That means you’re going to be hiring a lot more staff, from a few strategic high-level positions to growing existing teams (like customer service, or tech support).

The trouble is, this challenges the in-crowd dynamic that many start-ups thrive on. The stories about late nights around a kitchen table, or everyone mucking in at the warehouse – the wild nights after small wins, and all the business ‘firsts’.

Bring in a whole crowd of new hires, and this all-in-it-together ethos will fade. And that can put your culture at risk.

Suggestion:

Be intentional, and even over-the-top, about reinforcing your company culture. Talk about it a lot, and demonstrate that in your actions. If you’re all about work-life balance, allow flexible working. If ‘work hard, play hard’ is the vibe, then make sure you reward all that effort.

2. Bad hiring decisions can disrupt progress

Not having the right employees is the reason for 23% of start-ups to fail. As you grow, there’s definitely a pressure to make sure all your bases are covered. Many founders act rashly, hiring everyone they possibly need – from graphic designers and salespeople to senior figures to head up marketing or finance.

But there are two risks here: not finding the right people for the job (causing issues down the line), or not carefully considering your company structure. Rewarding your ‘OG employees’ with senior titles, creating too many layers, can cause a hierarchical mess – but wanting everyone to report to you, as founder, will make you the cause of stalled decisions.

Suggestion:

Slow down and hire tactically. Think about the senior positions that need to be filled externally – and get employees involved in the process, so they don’t feel totally overlooked. That means you’re less likely to be too impulsive in your hiring decisions too, preventing bad matches.

3. Original team feels displaced and disgruntled

They’ve been with you from the start. Put up with rough-and-ready equipment, makeshift office spaces, long days and harsh setbacks. Not to put too fine a point on it, but they feel a sense of ownership about your organisation – and that they’re owed a certain level of loyalty.

The trouble is, where they’ve excelled at ‘mucking in’, a growing business needs people to specialise, not generalise. And that could lead to them feeling that there’s no space for them, especially if you’re hiring subject matter experts to head up newly established teams.

That’s exactly why fast-growing start-ups tend to see a wave of resignations, just as they start to succeed.

Suggestion:

On a realistic level, some resignations may be inevitable. As the culture starts to shift, and things become more structured, some employees might miss the chaos of the early days. To minimise this, make an effort to give your existing employees a purpose. Maybe they can be a deputy to a new senior hire, or find a specialism that suits them.

4. Leaders become disconnected from their team

This is a big one. At the beginning, founders are the heart-and-soul of their organisation. They’ve hired everyone themselves, they know what everyone’s getting up to, they have final sign-off for every decision… in a word, they’re connected.

When your business grows, though, this simply isn’t sustainable. As the founder of a bigger organisation, you can’t sign-off everything everyone does. You can’t be responsible for hiring all staff and managing them day-to-day, and working on their career development. There just aren’t enough hours in the day.

Suggestions:

As founder, decide the one thing that only you can do. What are you uniquely bringing to the table? Be honest about your abilities – and for everything else, hire and empower a management team to handle the rest. Let go. Accept that you can’t have eyes on everything. Allow decisions to be made without you.

Riskiest growth strategy for a business? Not basing it on employee feedback

If you don’t remember to listen, your business growth strategy will fail. Protecting and evolving your culture is crucial, but it’s nothing without your people. Ask them for feedback. Hear what they have to say. Understand what they need. And factor all of that into your plans for rapid growth.

What are you looking out for? Maybe you’ll spot engagement scores slipping. Perhaps negative comments on the theme of ‘leadership’ will start to emerge. You could see that people don’t have the tools they need, or that their wellbeing is suffering.

There are a lot of ways your culture could be at risk. If you don’t ask, you won’t know what they are.

 

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