Over the last 18 years, the company I founded, Octopus, has gone from being a start-up in a spare room to an organisation employing more than 800 people. During that time, as we’ve grown, one of the biggest challenges we’ve faced has been to retain the culture that we started with.
We haven’t always got it all right, but we’ve learned a few useful lessons along the way.
Have a clear vision
Big or small, every organisation needs a vision that you can believe in, and get excited about. This binds people together and gives everyone a reason to get out of bed in the morning.
Our vision is ‘Octopus In Every Home’, and it works for us for three reasons:
While your vision doesn’t have to change the world, it does need to get people excited. And it needs to be something everyone in the organisation can relate to.
Hire people who add to your company culture
While the founder or chief executive may play the central role in defining what the initial culture is like, the reality is that a company’s culture lives, breathes and evolves as the organisation grows and new people join.
With this in mind, recruitment is key.
I see so many businesses where people are recruited almost solely for their functional ability rather than their cultural fit. And this often destroys the fabric and the culture of a company.
By ignoring the role your new employees play in shaping the culture of your organisation, you risk ending up with a business where people are pulling in lots of different directions at the same time, all with slightly different motivations.
So, hire people who share your values. And (this is often much harder) be hugely intolerant of the ones who don’t. Your values need to be genuine, instructive and part of how you run your organisation every day. Most companies only focus on what they achieve, and how they do it is seen as less important. And it ruins the culture.
Assess your leaders as much on HOW they deliver (behaviours) as WHAT they achieve (outputs). Paying equal attention to both means you’ll embed a culture where your employees recognise that true success comes not just from what they do, but how they do it.
Avoid trite values like the plague
When it comes to setting your company values, aim high and stay there. ‘Honesty’ and ‘integrity’ should be standard requirements for any business, not something that sets you apart. Hire, fire and reward people in line with your values and never, ever compromise.
If someone is functionally amazing but doesn’t share your values, they shouldn’t be part of your team.
And, recognise that even if you’re really good at recruitment, you’ll still only get seven out of ten people right. Staff turnover is not a bad thing (but make sure your employees receive the ‘red carpet’ treatment on the way out as well as the way in).
A company’s founder or CEO is always going to be seen as the guardian of the culture (and rightly so – they should care about the culture of the business more than anyone else), but as the business scales, they will need a senior leadership team around them that will live the values and protect the culture as much as possible.
The more ‘bought-in’ this team is (culturally and through equity ownership), the more effective at preserving the culture they will be.
A leadership team needs to be very self-aware and will understand that their behaviours have a huge impact on the organisation.
Leaders who can’t control their emotions, or who obsess purely about achievements at the expense of behaviours (prioritising the ‘what’ and sacrificing the ‘how’) tend to end up with unhappier, less productive teams in the medium-term.
Great leaders are relentlessly – and infectiously – optimistic and confident, and this lifts the culture.
How to handle growing pains
Even with some fantastic leaders and some very clear values, the culture a company is most likely to be at its strongest when there are between 50 and 100 people.
This is because the company is big enough so that everyone has clearly defined roles and responsibilities, but communication is still able to happen organically.
As a company grows in size, I think the key to fighting this inevitable cultural decline is to communicate brilliantly and to ensure that everyone feels engaged.
People are happiest when they feel they know what is going on around the business and feel they are playing an active part in it.
Communication must be straightforward. No spin, no excuses, no sugar-coating. If you’ve messed something up, explain why it happened and what you’re going to do about it.
In our case, we go as far as trusting everyone in the business with what would be considered confidential information in other organisations.
Every four months, we openly discuss our performance as a business – what we’re getting right, what we’re getting wrong and what we’re going to do about it.
Open, honest feedback (one-to-one and one-to-many) is key to building a culture that lasts. Everyone should feel able, and be encouraged, to speak their mind.
Again, this is where your leadership team needs to be viewed as role models. They must be proactive when it comes to giving and receiving feedback.
Growth spurts will present new challenges
The most recent cultural challenge we’ve faced has been moving to a Group structure, with a number of different autonomous businesses, all functioning under one master brand.
This type of structure creates its own challenge, specifically how to retain the overall culture while at the same time giving these individual businesses the independence they need to be successful in their own markets.
The answer lies in ensuring that they all share the same values and vision.
Having a master brand means that everyone understands what the group is looking to achieve. It also means we can encourage our best talent to change roles or functions, or to move between the different businesses quite freely. There’s no ‘culture shock’ from switching from one business to another.
But moving to the Group structure also brings risks. We will almost certainly build some businesses, or some products or services, that don’t succeed.
Back in our early ‘start-up’ days, we’d have learned our lessons and quickly moved on. However, as organisations become larger and more successful, they become less accepting of ‘failure’.
The bigger companies get, the less likely they are to experiment and that’s because people don’t want to look foolish in front of their colleagues. This kills creativity and innovation.
It’s the job of the leader to ensure people don’t feel embarrassed when they fail. Dozens, if not hundreds, of things can go wrong in a business, but you need to create a culture where that’s not just accepted but encouraged.
The key is to ensure that none of the mistakes you make are terminal (never go ‘all-in’), and that the team finds a way to pivot quickly when things don’t work out as planned.
Your company culture should be unique to you
Lastly, when you’re building a business, you want to make sure that the people who work for you enjoy coming to work. It’s important not to take yourself or the business too seriously, and to remember to capture the small moments as you grow.
These are the memories that will make you smile in 20 or 30 years’ time.
At Octopus, we use every opportunity we can to create glue within the organisation (fun days, offsites, clubs, drink-ups, lunches, networking or charitable causes). We celebrate our successes and, when we make our customers feel amazing, we shout it from the rooftops.
We create myths, legends and stories that help bring our personality to life.
That, to me, is at the heart of what a culture is. It’s a company’s personality. It’s what your employees talk about to the people closest to them. And it’s what allows your business to truly stand out from the crowd.
Originally published at octopusgroup.com