How can businesses retain their culture as they grow?

Over the last 18 years, Octopus has gone from being a start-up in a spare room to an organisation employing more than 700 people. During that time, as we’ve grown, one of the biggest challenges we’ve faced has been to retain the company 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. 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. It must also appeal equally to their heads as well as their hearts.

Our vision is ‘Octopus In Every Home’, and it works for us for three reasons:

  • It’s very long term (a vision should be something that doesn’t change for more than ten years).
  • A vision this big forces us to think differently. There are 23 million homes in the UK and we’re only in 200,000 today. We won’t achieve our vision by simply doing more of what we’re already doing.
  • It appeals to heads and hearts - the logic comes from the numerical target (it’s easy to track our progress) and the emotion comes from what it feels like to be in someone’s home. We want our customers to feel so strongly about what we do, and how we do it, that they not only welcome us into their homes but they also proactively recommend us to those they’re closest 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 company 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).

Leadership teams

A company’s founder or chief executive 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 company 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

In our experience, even with some fantastic leaders and some very clear values, the culture of Octopus was still at its strongest when we were 30 people, precisely because communication happened naturally and everyone knew everything that was going on. The key to fighting this inevitable cultural decline as the business scales is to communicate brilliantly and to ensure that everyone feels engaged and part of something.

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 Octopus with confidential information. 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. As well as Octopus Investments, the company we started back in 2000, we now also have Octopus Healthcare, Octopus Property, Octopus Energy, Octopus Ventures and a specific innovation arm called Octopus Labs.

This creates its own challenge, specifically how to retain the Octopus company culture while at the same time giving these individual businesses the autonomy 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 Group 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 work. Back in the early ‘start-up’ days of Octopus, 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 okay. The key is to ensure that none of these mistakes 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 roof tops. 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.

Author
Simon Rogerson
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