D.D. Warrick, Professor of Leadership and Organization Change at UCCS, says “[leaders need to know that] a major factor in the success of an organization is its culture. Organizational culture can significantly influence the performance and effectiveness of a company; the morale and productivity of its employees; and its ability to attract, motivate, and retain talented people.” Now more than ever it is crucial to examine how to scale your company culture and do so in a methodical way.
A study from the World Economic Forum discovered that more than half of the 200 companies surveyed cited talent as a key growth challenge, with scaling culture high on the list of their talent priorities. Although it is a principal part of a global expansion strategy, it is hard to execute. So today we are going to give you strategies that we learned from our own scaling experience from opening our first PublicRelay international office in Dublin in Fall 2018.
5 Rules for Building and Scaling Company Culture
We opened our Dublin office opened in Fall 2018 to expand PublicRelay’s operating schedule. Given the nature of the media cycle, we needed to ensure a team was available to help with customer requests and crises in the early morning hours of the U.S. East Coast. This expansion not only allowed us to recruit top talent abroad, but also to engage in another culture outside of the United States. Although we faced many difficulties, we were able to develop a scaling strategy that allowed PublicRelay to effectively develop a company culture for the international office, which we later applied when opening a second office in Ireland:
Finding the right person for the job is key to maintaining a healthy company culture, and a happy customer base. When you need to hire people quickly, you have the tendency to soften your standards because there is pressure to get the position filled. However, cutting corners during the vetting process for new employees can lead to the hiring of a poor cultural or skills fit for the position and therefore, higher turnover.
If employees are consistently leaving the company because of a poor fit, this can severely affect your company’s financial health. A LinkedIn study indicated that the total cost of losing an employee “can range from tens of thousands of dollars to 1.5-2X the employee’s annual salary.” These costs include hiring, onboarding/training, and the time it takes for new employees to reach their peak productivity on the job. A revolving door is not a sustainable hiring strategy, especially for a fast-growing company that is trying to allocate resources as efficiently as possible.
Furthermore, high turnover can lead to poor client experience. Clients depend on their vendors to understand their business goals and develop strategies to combat challenges. If their main points of contact continue to change, this can result in a poor product caused by the lack of institutional knowledge. This can also lead to client frustration when they must routinely build relationships with a new employee. Overall, selective hiring minimizes turnover, which is important for solidifying the financial well-being of the company and its relationships with customers.
Embed Observable Behaviors in Onboarding and Employee Review Process
Embedding key cultural behaviors into the onboarding and review process allows for clear understanding of what the company’s culture should be and helps to keep the same standards across teams. The Harvard Business Journal states that culture can fall by the wayside very quickly when scaling because of the rapid increase in headcount. To ensure that employees will not interpret company values based on their own personal understandings, experts suggest defining each value on a couple of observable behaviors.
On day one of the job at PublicRelay, managers have candid conversations that set expectations by using specific behavior examples rather than vague terms like “teamwork” or “open communication.” Behavior expectations are also included in quarterly evaluations so reinforced behaviors can be rewarded. We also provide additional training for employees struggling with certain behaviors, such as succinct client communication or time prioritization, to help them reach those goals. In total, this process helps maintain key company values at a time when they often become compromised.
Culture Reinforcement through Habit Formation
Forming habits around important cultural behaviors allows employees to incorporate them into their general work processes. Just because employees know what behaviors are expected does not guarantee they will perform them. In Charles Duhigg’s book The Power of Habit, he discussed that habits are important because they create a framework for how employees should react in specific situations. Creating habits around desired cultural behaviors allows for the desired actions to become second nature. However, Duhigg emphasized that changing habits on this scale is best accomplished by focusing in on a single behavior that, when implemented, impacts a wider variety of behaviors and outcomes.
A key part of PublicRelay culture is to offer solutions to internal problems that are seen. Our senior managers started with something small – individual teams started holding monthly meetings to discuss improvements in the company software. Once established, management leveraged this habit to think critically about other aspects in which they saw issues, such as how to respond to a client crisis or how to increase communication between teams. Once we engrained this cultural behavior successfully, we utilized this same concept across other key behaviors to solidify company values in day-to-day processes and operations.
Promote the Right People
Promoting an employee who is not 100% invested only sets your company back further at a pivotal time in the business. It is important to promote employees who not only have the skills, but also excel at the target behaviors and understand the core purpose of the company. As a Harvard Business Journal article points out, “while skills can be learned, it is much harder to cultivate attitude and character…Compromising on talent that is good enough but not necessarily the best you think you can get…is a sure formula to short-circuit your own culture and long-term performance.” This strategy is always important, but it becomes essential when developing a scaling strategy because growth can be chaotic, and management may not have the time to build soft skills into prospective managers.
Making sure employees with the right values are on the promotion track also positively signals to the team which principles the company stands behind. Promoting an employee who sets a high standard pushes their teams to meet that level as well.
Foster Team Autonomy in Establishing their Identity
Encouraging teams to execute the cultural values while staying in line with the core expectations forges an authentic belief in the company’s values and goals among all employees. Duhigg stressed that people are more likely to adhere to a habit if they feel in control of their actions or processes that make up that habit loop. Therefore, trusting your leadership to institute some of their own habit-forming strategies will cultivate a sense of ownership.
Some teams at PublicRelay facilitate the company value of “teamwork” through an end of the day sign off email to check if anyone needs help before leaving. Others encourage having a team lunch once a week to make sure members are engaged. Rather than a top-down approach, giving managers space to run their own teams within a cultural framework fosters stronger bonds within the company. This also allows for regional cultural difference to be considered while keeping company culture intact.
It’s the People That Matter
At the end of the day, talent is what will make or break your scaling efforts. Processes and habit loops can help point people in the right direction, but things will inevitably go against your plan at some point. Budgets get cut, client crises will emerge, and unexpected departures will happen. If your workplace consists of people who have a strong sense of shared values and vision, you can smooth out those bumps and make it through the challenges that come with ambitious business goals.
Want to gain a better understanding of how your employees view your company culture? Visit Barometer to see where you are thriving or coming up short!