Recognize-Diffuse-Scale: The 3 Processes for Scaling Organizational Culture

Andy Cook
January 12, 2018
Interview with Cecilia Landholt

Scaling an organization is like building a rocketship and trying to reach space: “While your goal is getting from point A to point B, there are a lot of things moving and shaking in the process you need to pay attention to.” That’s what Startup Culture Advisor and CEO Coach Cecilia Landholt tells the companies she works with.

Those moving bits and shaking pieces refer to all things culture: from workflow processes to mechanisms for praise and feedback across your team, and from the work habits to the communication patterns of individual team members.

How successfully your team handles these things will determine whether you ascend through the unknown to reach your goals, or burn up while trying to lift off.

Through her previous work as People Operations Manager internally at KISSmetrics, where she helped grow the team from 12 to 70 members, and her current role as coach and advisor to startup founders, CEOs, and people-ops teams, Cecilia has been involved in developing successful startup cultures since 2010. Her work as a culture advisor focuses on providing guidance and practical toolkits around building out company values, company mission, and employee development that help create a pattern that scales and grows along with the business.

Every company has a culture, whether they’ve identified it outright or not. The one thing she can tell with certainty after all these years in the field is that “different teams have different cultures, [based on different] beliefs and value systems.”

While there may not be a one-size-fits-all rulebook for culture, Cecilia has developed a repeatable process that all organizations can apply to cultivate their culture. The mechanism consists of three processes that run on an apply-adjust-repeat cycle:

  1. Recognizing and refining your culture beliefs and behaviors
  2. Diffuse new culture habits throughout your team
  3. Scaling your culture at the same pace you scale your team.

The tricky part? Taking an impartial approach to the application of these processes and to the improvements you need to make to your culture. But that’s precisely where Cecilia’s work comes in. In this exclusive interview, we’ll explore the specific process Cecilia uses with startups to help them improve their culture.

What is Organizational Culture?

When we speak of organizational culture, we tend to speak of an intangible concept that loosely describes how a group of people goes about its everyday work. But intangibles are not only impossible to grasp, they’re also impossible to break down into processes. And without a practical and repeatable process in place to evaluate your culture, there’s nothing you can reliably refine or improve upon. Any steps or actions you take can’t be measured to see if they were actually effective, so they will seem random at best.

That’s why Cecilia begins all her coaching and advising at startups by defining what culture really is:

  • A set of beliefs that governs behaviors: Culture is not a set of rules, guidelines or an aspirational doctrine that you publish once and then don’t think about again. Startup culture, Cecilia points out, “starts with beliefs and patterning” and “stems from the CEOs and founders of the companies.” Not all of these beliefs and patterning, however, match what the company has set down as its values. Rising from the subconscious,“the patterning and values [of CEOs and managers] are reflected in their decisions and their leadership styles. And that then influences the rest of the group.” Cecilia’s work begins with helping CEOs, founders, and other company leaders recognize these unconscious beliefs and patterns and the way they affect company culture through the behaviors they encourage.
  • A living, breathing, constantly-evolving thing:It’s never too early to start thinking about culture, but trying to force a culture into the perfect form at the very start of a company is probably not going to work. Culture, as Cecilia puts it, is “a living, breathing, growing, ever-changing entity, just like everything else. When you treat it like that, you can usually be proactive instead of reactive. You can be solving problems before they even happen. You can be anticipating instead of saying, ‘Oh, shit, we have a hole in the boat and now we’re gonna sink.’”
  • Your most important retention mechanism: “Having someone to organize things and be thinking about it on a regular basis is really important for employee morale, for employee retention, for keeping things consistent, for communication, for transparency, all the things that employees really like.” That means managing company culture, as Cecilia explains, includes taking care of “whatever has to do with employee experience.” From making sure there are enough knives and forks in the kitchen to mitigating miscommunications between teams and departments, there are a million things, big and small, that can affect the happiness and efficiency of your team and how long people want to stick around at your company. The best people want to work in a company that’s continually solving latent problems by evolving the culture.

The 3-Key Process of Successful Startup Cultures

No two organizational cultures are alike. What’s more, a culture will evolve as the organization grows. No two iterations of your culture should be the same, because what works at 10 people isn’t going to work at 100 people and definitely won’t work at 1,000.

As more people join the team, it’s only natural that your flows and processes change—from small things like how to take lunch breaks to the bigger things like how decisions are made, how departments are structured and how information is shared.

What can remain the same, however, is the mechanism you put in place for assessing and refining your culture as your team and company grow to the next level.  As a startup scales, it should constantly be reevaluating its culture to make sure it’s scaling with the team.

Cecilia breaks down that mechanism into the following three key processes to help founders, CEOs, and culture teams figure out what they need to do next to improve and expand their startup culture.

1. Recognizing and Refining Culture Patterns

More than the values you put down on paper, it’s the actual behaviors you and your team display on a daily basis that make up your culture. Many of those behaviors stem from unconscious beliefs and patterning of the leadership team that manifests through their actions.

When working with a new client, Cecilia skips having a vague or aspirational conversation about the theoretical values an organization would like their culture to be. Instead, she guides her clients through an assessment of their real culture by examining their behaviors and the effects those behaviors have on the entire team.

Behavior trickles down from the top, especially from the founders and executives. Often that flow of behavior benefits a team by instilling positive values across the entire organization. Seeing the CEO working hard every day creates a get-stuff-done culture for the rest of the team. But self-developing culture can cut both ways too.

“If you have a CEO who gets to work late and leaves really late, you’re gonna see a lot of people working late, and coming in late.” That type of behavior creates an environment where if an employee doesn’t work late, it might seem like he’s not working enough hours, even if he’s arriving earlier than every one else to the office to make sure he can leave on time to get home to his family in the evenings.

If a behavior’s that’s problematic is recognized, Cecilia digs deeper to identify the underlying belief, making sure to uncover the first principles behind the behavior.

“There is the CEO, for example, who comes in late and leaves late, right? But [once we point out that his entire team works late,] he’s like, ‘Oh, this is my style. This is how I get the most work done. I want to encourage everyone to work with their style that gets the most work done.’ That’s very different from saying, ‘I want everyone to do it my way because my way is the right way.’”

“Once we identify the belief [behind the behavior], we then do exercises to change that belief or the perspective [communicated], as necessary. We would work on things like, where did that belief come from and how has it been serving you? And we get into a rapport with that. Then I’ll ask, what’s the new belief that you’d like to have? And maybe that doesn’t need to be a trigger. Maybe this can be this way. So, we really look at the chess board differently.”

Identifying aspects of a culture that are clearly detrimental the team is a useful first step, but it’s not only negative behaviors that need to be examined. Often, seemingly positive or harmless behaviors can hinder the growth of an organization.

“I once had a founder,” Cecilia recalls, “who, he was like, ‘Oh, the company is like a family.’ And I said to him, ‘Well, that’s really dangerous, if the company is like a family.’ He didn’t understand what I meant by that. This particular founder was going out with his company every Friday night and, you know, raging with them and partying with them. So I asked, ‘If the company is like a family, who’s the adult in the situation?’”

We're a team, not a family. We're like a pro sports team, not a kid's recreational team. Netflix leaders hire, develop and cut smartly, so we have starts in every position.

Like Netflix, great organizations operate like a professional sports team, not like a family. You can’t fire your brother, but you can and should part ways with an employee who’s underperforming, doesn’t fit into the team dynamics or hasn’t grown their skillset with the organization’s needs.

“A lot of times people have these beliefs that have a positive intention behind it.” But when you look at the behaviors these beliefs generate from a different perspective, you can see how they can be negatively impacting your company.”

Just like Newton’s Third Law, which states any action will have an opposite reaction, positive cultural behaviors might actually have negative consequences behind the scenes. An unlimited vacation policy might seem like an amazing perk on the surface,  but in reality it could lead to employees taking less time off because there might not be a proper process for going on vacation or they feel like they can always take a vacation later, leading them to never actually taking vacation. That can lead to employee burnout or someone even quitting because they never get vacation, even though theoretically they have an unlimited amount.

The first step to improving your company culture begins with auditing your behaviors and identifying the beliefs in yourself and your leadership team that give rise to them.

Below are the questions Cecilia asks her clients during  a culture audit:

  • Do these beliefs and the behaviors they manifest serve my team’s growth goals?
  • If they don’t, what steps do we need to take to change these beliefs?
  • If the beliefs are positive, how can we refine the behaviors resulting from them?
  • How can we turn this behavior around into a positive feature of our culture that accommodates our growth?

Once you identify the belief or behavior you’d like to change, and the way you’d like to change it, it’s time to let your team know. Any of these improvements and changes, even if it’s small, will eventually trickle down, and that’s why, Cecilia says “we end up talking about how that’s gonna affect the team.”

2. Diffusing the Evolution of Your Culture

Certain habits and processes may have worked fine when your team was just 3 people working from the same crammed office space with back-to-back desks. But when you’re trying to grow your team to a group of 30 spread out across multiple rooms, or a team of 300 spread across the entire globe, some of those processes and habits simply won’t work.

In order to diffuse any change across your team, Cecilia insists on this one thing: “you need leadership buy-in.

“Change in behavior needs to come from the CEO, founder, and leadership team. Which is huge. Sometimes I don’t think people really get that if there isn’t a leadership buy-in, you’re just gonna be hitting your head against the wall.”

It doesn’t matter if you have your values set up on a wall in your office or repeat them randomly out of context once a month at your all-hands meeting. The patterns and beliefs that the leadership team disseminates are the ones that they actively exhibit to the rest of the organization, every single day.

For example, let’s go back to our CEO who works late but wants everyone to work with their own style on their own schedule. “Some people” Cecilia explains, “might be working late because they think it’s the right way since the CEO does it.” Or that if the CEO doesn’t see them working late while she’s in the office, then they don’t get credit for working hard, even if they got in earlier than everyone else.

Communicating the belief behind the behavior to the team is step one. That CEO can tell the team, “I wanna make sure you’re optimizing for your best work day. Work whenever you wanna work, but make sure you get your work done.” But the culture will only change if the behavior changes too, especially from the top. For example, the CEO might say it’s fine to work any hours as long as stuff’s getting done,  but if she’s requesting urgent reports in the middle of her day, which is actually towards the end of an early-bird workers day, then reality doesn’t match the message.

Just saying a cultural norm exists isn’t enough. The core behaviors need to change too, starting from the executives. In this example, the CEO could modify her own behavior to not make requests at the end of the day. Better yet would be for the CEO to get leadership buy-in from every executive, then work to implement an asynchronous communication system across the entire organization, so everyone can actually work at any time without guilt or roadblocks.

Talking about your beliefs and behaviors without a practical plan for reinforce positive culture habits across your team will get you nowhere.

Applying a change across an entire organization can be hard. Even if you’re the captain of a battleship, turning the steering wheel still takes for the ship to chance course. Cecilia’s core advice for this process?

“If you want to disseminate things, you need to make sure that it’s not just something that’s written on the wall. You need to make sure it’s in the decisions, it’s in the speeches. It’s in the emails that go out. It needs to percolate through everything [in every single action].”

If there’s one thing that should stay consistent in your company culture, it should be that you consistently self-evaluate what needs to changed.

The second step to improving your startup culture is taking the underlying beliefs down you’ve identified that need to change down to their first principles, working out a system to change the core behavior, then diffusing those changes across the team.

Here are a few questions Cecilia asks her clients that you can use to help you plan and promote the changes to the rest of your organization:

  • How are you going to announce this change to your team?
  • What are the benefits this change will bring to the team’s effectiveness and happiness?
  • How do you expect leaders and other team members to behave once this change takes effect?
  • Are you creating an additional process or changing another process to support this cultural change? (Think about the example of creating a system for asynchronous communications in the example above.)
  • If team members continue to experience the old behavior, what’s the best way to address the situation and with whom? Empower your team to help in the implementation!
  • Beyond a verbal announcement, how will you and other leaders exemplify that change in behavior?

The more awareness your team has around the changes you’re trying to make, the more able you will be to contribute to those changes and scale a positive culture as your team grows.

3. Scaling Your Culture at the Same Pace as Your Team

Culture, Cecilia believes, is super important for hiring. Not that you should hire for culture over talent, but the problem, as she puts it, starts “when you’re not thinking about [culture]” during hiring.

Every company has a different culture. Some cultures are more reserved than others. Some teams are more collaborative and expect greater team participation. Cecilia has seen a wide spectrum of startup cultures in her years of coaching and advising, none of which would be ideal for every person.

“Some companies have a silly hat day, or something in the morning. And some people love that, and some people hate it. Some companies are like, ‘We work, we leave at five. You go home to your families.’”

And then there was the company where “everyone was an only child. Which was so interesting. Everyone just like worked on their own. I was consulting for them and remember thinking ‘I could never work here.’ But it worked. It totally worked for them.”

So when you start scaling your team, it’s important to have a clear understanding of what your culture is and how it’s implemented across your team, so you can then ask yourself: “Is this candidate exemplifying the values that are part of the company culture?”

What’s more, discussing your culture norms, beliefs, and expectations in hiring interviews lets candidates get a glimpse of the environment they’ll be expected to thrive in once they join the team. This isn’t just about you deciding if they fit, but about also about the candidate’s understanding of whether or not they’d like to join that culture. If they can’t get with your company culture and can’t follow the behaviors that guide your day-to-day work, they’re not likely to last long on the team.

“Hire for culture because retention is so expensive. Sometimes I think people don’t realize how many hundreds of thousands of dollars are wasted on hiring too quickly.”

Codifying your Core Beliefs

After you do the hard work to figure out what your culture actually stands for through the first two parts of the process, publishing a culture deck can help spread your cultural beliefs. A culture deck can act as a way to market your organization’s culture and help people outside the walls of your office understand the underlying operating system of the team, often getting the readers excited enough to actually apply as a candidate to your organization.

As Reed Hastings, the co-founder and CEO of Netflix said about their culture deck on the podcast, Masters of Scale, “the core benefit, which we did expect, was that candidates were very aware of the culture. The unexpected benefit was, many people became candidates for us, because they loved that—what we described in terms of freedom and responsibility—that might not have otherwise thought about us.” Since publishing their culture deck in 2007, Netflix’s culture deck has been viewed over 17M times on SlideShare.

A culture deck doesn’t need to be anything fancy either. The first iteration of the Buffer culture deck was just a black-and-white 10-slide deck the two founders created. Over the years the Buffer team has iterated on the messaging, but left the original form-factor largely the same. Even with a non-glamorous design, their culture deck has been viewed over 225,000 times on Slideshare since it was published in the beginning of 2013.

No organization that intends to grow can be built on the back of one person. It takes more than one person to build a lasting, impactful organization. The third step to improving your startup culture is attracting the true believers of your team’s culture and screening candidates for culture fit. When talking to candidates about a role at your company, make sure to include some of these questions to gauge how well they fit in with the culture you’re trying to build:

  • What does a typical day look like for you? (See if their general schedule, interests, family/personal obligations align with your team’s.)
  • When you get a major project, what are the steps you take to tackle it? (See how they solve problems and communicate challenges.)
  • When things don’t go according to plan, how do you resolve problems and roadblocks? (See whether they’re reactive or proactive and whether they are leaders or need direction.)
  • What does a healthy work culture mean to you and how do you contribute to it? (See if they like to organize events for colleagues, or if they prefer socializing outside of work.)
  • How do you communicate praise and feedback to your group and the team? (Gauge whether they will be a positive influence on the team and whether they can give and receive feedback well.)

If you bring the right people on, they will not only thrive in your culture, they will add their own contributions to it and help create a better work environment for everyone on the team. Each person added to the team should not just keep the culture intact, but should actually improve it by making it stronger. Assemble the right team, and you’ll build a stable, reliable rocketship to soar to even greater heights as an organization.

There’s No Right Way to Achieve Escape Velocity

No one can tell you what your startup culture should be like. Nor do “wrong” and “right” cultures exist. Some cultures are good for some people and companies and other cultures are good for others.

What does exist, however, is patterning and beliefs that either help you improve your culture and grow your team or hinder you from reaching your goals.

Developing the startup culture that best serves your team and scaling that culture to match your growth goals hinges on setting up a solid, unbiased mechanism for recognizing the beliefs underlying your culture patterns, diffusing better culture habits through practical implementation, and scaling your culture by bringing in people that can thrive in that environment.