Scaling a business is one of the most challenging phases in an organisation’s growth journey. While much attention is often given to funding, market strategy, and operations, the organisational culture can be the silent driver—or barrier—of success. Defined as the shared values, beliefs, and behaviours within a company, culture shapes how employees engage, collaborate, and adapt to change.
This article explores the role of culture in scaling businesses, presenting insights into potential pitfalls, and practical recommendations for leaders.
Why Culture Matters When Scaling
1. Driving Employee Engagement and Productivity
A healthy organisational culture fosters engagement, which in turn drives productivity—a crucial element during rapid scaling. Engaged employees are 21% more productive, according to a Gallup study, and organisations with high engagement levels are 22% more profitable.
Case Study: BrewDog
The Scottish craft beer company BrewDog experienced rapid growth but faced significant cultural challenges as it scaled. Employee dissatisfaction became public, highlighting how scaling without attention to culture can harm a company’s reputation and operations. The business subsequently launched initiatives to improve transparency and employee engagement, demonstrating a shift towards embedding culture in its scaling strategy.
2. Ensuring Alignment Across Teams
As businesses grow, silos can form, causing misalignment and inefficiencies. A strong culture acts as a unifying force, ensuring all teams work towards shared goals and values.
Statistical Insight:
Research from Bain & Company shows that companies with high alignment between culture and strategy outperform peers by 30% in profitability.
Challenges in Scaling Culture
While culture can be an asset, it also presents challenges during scaling.
1. Culture Dilution
Rapid hiring often leads to the erosion of an organisation’s original culture. Without a deliberate effort to codify and communicate values, new employees may struggle to adapt, leading to fragmentation.
2. Resistance to Change
Long-standing employees may resist the changes that scaling requires, such as restructuring or adopting new technologies. This cultural resistance can impede growth.
3. Prioritising Growth Over People
A hyper-focus on metrics like revenue and market share can sideline cultural considerations. A toxic or neglected culture can lead to high turnover, poor morale, and reputational damage—factors that ultimately hinder growth.
While some argue that focusing on culture can slow down scaling efforts, research suggests that neglecting it is far more costly in the long term. An article in Harvard Business Review suggests that organisations with strong cultures are better positioned to navigate rapid growth and market disruptions.
Building and Sustaining Culture During Scaling
1. Codify Your Core Values
Documenting core values ensures consistency as the company grows. These values should guide decision-making, hiring, and leadership behaviours.
Example:
Zappos, known for its customer-first culture, codified its 10 core values early. These values informed every aspect of its operations, helping it maintain a unique identity even after being acquired by Amazon.
2. Hire for Cultural Fit and Add
During scaling, hiring decisions should align with cultural priorities. A “culture add” approach—seeking candidates who align with values but bring fresh perspectives—helps maintain cultural integrity while encouraging diversity.
Actionable Tip:
Include behavioural interview questions tied to company values, such as “Can you share a time you made a decision based on customer-first principles?”
3. Empower Leadership to Model Culture
Leaders play a critical role in embodying and reinforcing culture. If leadership behaviour is inconsistent with stated values, employees will disengage.
Case Study: Monzo
The UK-based digital bank Monzo emphasises transparency as a core value. Leadership regularly engages with employees and customers through open forums and updates, reinforcing this value as the company scales.
4. Foster Open Communication
Scaling businesses must encourage open dialogue to identify cultural challenges early. Anonymous surveys and feedback loops create a sense of inclusion and ownership among employees.
The Global Perspective on Culture and Scaling
1. Role of Diversity and Inclusion (D&I)
A diverse culture fosters innovation—a critical asset for scaling companies. According to McKinsey, companies with diverse leadership are 36% more likely to outperform their peers financially.
UK Example: Lloyds Banking Group
Lloyds has embedded D&I as a cultural priority, resulting in higher employee satisfaction and a reputation for innovation in financial services.
2. Technology and Culture
Digital tools can reinforce culture during scaling by automating feedback collection, enhancing communication, and training new hires on core values.
Example:
Slack and Microsoft Teams, when used effectively, can reinforce collaboration and transparency in fast-growing organisations.
Balancing Culture with Strategic Goals
While culture is critical, it must complement—rather than overshadow—strategic objectives. Leaders should regularly assess how cultural initiatives align with business priorities, adjusting as necessary to maintain harmony between growth and values.
Practical Steps for Leaders
- Conduct a Cultural Audit: Assess current culture and identify gaps that could hinder scaling efforts.
- Create a Culture Playbook: Develop a simple, actionable document outlining values, behaviours, and expectations.
- Invest in Onboarding: Use onboarding as an opportunity to immerse new hires in the company culture.
- Celebrate Cultural Wins: Recognise and reward behaviours that exemplify your culture to reinforce its importance.
Conclusion
Scaling a business successfully requires more than financial investment and operational planning—it demands cultural stewardship. While challenges exist, the evidence overwhelmingly supports the notion that culture is a critical driver of sustainable growth. Organisations that prioritise culture alongside strategy are better equipped to navigate the complexities of scaling while maintaining their identity, engaging their workforce, and achieving long-term success.
References
- Gallup. The State of the Global Workplace (2023).
- Bain & Company. Cultural Alignment and Business Performance (2022).
- Harvard Business Review. The Culture Factor (2021).
- McKinsey & Company. Diversity Wins: How Inclusion Matters (2020).
- Chartered Management Institute. The Impact of Leadership and Culture in UK Businesses (2023).
- Zappos. Delivering Happiness: Company Core Values (2023).
- Monzo Bank. Transparency and Growth (2022).