How many times have you heard this story?
A few friends start a company because they’ve got talent in their field and a passion to succeed.
They do well, moving from their garage/basement/apartment.
The story inevitably includes a passage such as:
“It’s a supportive company culture,” said Founder A. “We’re all on the same page.”
“That’s a great point,” Founder B added. “We don’t get caught up in the normal restrictions of traditional American business.”
“Exactly,” said Founder A. “This isn’t a 9 to 5 situation.”
It’s compelling, the idea that company culture is seeded in the passion of the founders and lives on in perpetuity.
It’s true.
Until it’s not.
It’s something we see in our work with growing companies at FiveFour.
But it’s not just us.
I was listening to the “Acquired” podcast recently. The guest was Ho Nam of Altos Ventures, a Silicon Valley venture capital company.
Altos has significant shares in companies such Coupang, Woowa Brothers and Roblox. (Ask any 12-year-old about Roblox.)
It’s a fascinating discussion that you can listen to here.
But what resonated with me – in terms of what we do at FiveFour – comes about 55 minutes in.
Ho talks about how companies that grow fast – from $10 million to $100 million – can start having problems.
“It’s the most heartbreaking thing in the world to have this thing you worked so hard on start to fall apart on you,” he said. “It’s really hard to turn it around. It’s much harder to do a turnaround than to build it right from the start.”
And here’s where it gets really interesting and relevant to the companies we work with. What’s the difference between companies that continue to grow and those that fall apart?
Culture.
Ho continues:
“I think almost every single company startup has a great culture in the beginning. People say the culture gets set when it’s the first five people or whatever. You got to do it right. I’m like, ‘Don’t tell me about that. Every little company has a great culture.’ You know why? Because just to survive that little infant mortality phase, if everybody’s not pulling their weight, there’s no place to hide. Everybody is contributing. Everybody knows what the heck is going on. You have a great culture. Every little company. But not every great culture at every little company turns out to be great as they grow, so you have to pay a serious amount of attention.
“Around the time you get to first base, that’s when you get your first 100 people, and you really have to do it right.”
Build it the right way from the start.
In our hypothetical story, those two founders grow the company from five to 20. Then they need more managers and more people.
Pretty soon, they may not even know all the employees. Newer team members learn the company culture through shadowing and osmosis. The culture they learn, however, comes from the person they are shadowing.
It’s the copy of a copy syndrome.
That great startup culture – the seed – gets lost and pretty soon there’s little resemblance between what’s in the minds and memories of the leadership and the people who are carrying out the day-to-day business.
That’s why our 4D Transformation Method starts with Define the Culture. We do it to memorialize the culture, to ensure those core principles that made the company successful carry through to the branches and leaves.
The installation of culture and values can’t be person dependent.
It must be process dependent.
It must be taught, not assumed.
Only then can you stage a remarkable experience, that creates customer loyalty and leads to double-digit growth.
That’s what we call growing your business from the inside out.
It’s not a simple thing to do. But as Ho notes, it’s vital to success as you scale a company.
If you want to hear more about what we’ve learned about instilling that culture of customer experience, just find a time on my calendar and we’ll talk about it.