Interviews

5 steps to stop your scaleup screwing up

6 min read

05 July 2018

Culture is the operating system of every business, so make sure you spend time getting it right before speeding ahead, says Corporate Punk’s Phil Lewis.

A few years ago, we were working with a leadership team whose high growth business had stalled. “I’ve always believed in moving fast and breaking things,” the CEO said.

“And…?” I said.

“…And now my people, processes and platforms are all broken, and I don’t know what to do.”

In this situation, 99.9% of people would blame that CEO – case closed, move on. This might seem fair enough: many believe leaders are paid the big bucks to have all the answers.

But no leader ever got out of bed in the morning with the intention of making a mess. The fact is that it is brutally hard to lead people across unmapped terrain. No-one has super-human powers of knowledge or foresight.

From this, it follows that it is unreasonable to expect one individual to have all the answers to every difficult question facing a business. The job of leadership is not to find the answers, it is to enable the answers to be found.

In other words, the role of the leader is to create the context in which other people can perform at their best. This is a question of culture: of how well an environment supports or inhibits the performance of people every day. Scaleups become screw ups when culture is mismanaged – or ignored altogether.

Culture can feel like a vague concept. It isn’t. Let’s start by defining it. Think of culture as the operating system of a business. Your OS will predict how your company perceives competitive threats, and economic upheaval. Whether your people lean into problems and remain open to change. Whether they have the courage to be inventive in the face of difficulties. Whether they collaborate to solve problems.

In this context, the job of the leader is to build an OS that can support new applications, and not keep crashing along the way.

How do you do this? All organisations are different. But here are five broad recommendations that have helped many leaders improve their cultures, and with that maintain or restore their high growth trajectory.

1. Start by putting language around your culture

To integrate culture properly into your business strategy, the first thing you need to do is put language around it. If you can’t describe something, you can’t manage it. How would you and your team describe your OS? What shared characteristics do your people have? What are the dominant narratives in your firm? Write these down and ensure they’re realistic.

2. Embrace data

What gets measured, gets done. So, next, benchmark and measure your culture. What are its key attributes, and how are they changing over time? What are your leading and lagging indicators of cultural performance? What are they telling you about how the OS should develop?

Build a dashboard that helps you to track your cultural progress.

3. Hire on values as well as skill-set

The single biggest mistake most organisations make when hiring is not checking values. If you do this at first interview, your hiring process will be efficient. Further, you will onboard people who work well within your OS – and improve it.

Struggling to do this? Identify all the reasons why you’ve fired people. Remove any instances of gross misconduct. Those are your values in action. Express their sentiments as positives and embed them within your interview questions.

(Warning: do not let cultural fit become a vague excuse for not hiring people when the hard work of values definition hasn’t been done.)

4. Treat governance as a welcome source of constructive conflict

A good board supports a high performing culture, as it will examine how efficiently and effectively performance is being managed. Too many firms treat their boards as inconveniences. Whether you like the people on your board is irrelevant.

It is far more important that you respect them and can resolve tensions to best effect. If you don’t feel that your board is your mastermind group, examine where the problem lies and make changes.

5. Communicate about context – monthly as standard, and weekly at inflection points

The start-point of building an effective culture is to make sure that your people feel secure. Fail to communicate and your people will always believe the worst or weirdest thing. Gossip is by far the biggest sapper of emotional energy and organisational momentum.

You need to talk to your people more than you could ever imagine about the context in which they’re working. Then you need to do it again, and again. Done that? Good. Now do it again.

Phil Lewis is managing director of organisational performance practice, Corporate Punk. After over 20 years in both creative agencies and management consultancies, he founded Corporate Punk on the belief that there was a more effective way to help businesses work better with their people. He and his team have made a lasting impact on global businesses including Sony Music, Adidas, River Island and Thomas Cook, as well as PE- and VC-backed high growth firms in categories such as life sciences, fintech and healthcare.