What is Cultural Dilution and How to Avoid It
What is Cultural Dilution and How to Avoid It
Guest writer Jay Lucas highlights some of the risks of rapid corporate growth in, “What is Cultural Dilution and How to Avoid It.”
We’ve all heard the expression, “too much of a good thing ain’t always good.” Can this really be true when it comes to corporate growth? Can too much growth be a bad thing? Not only does rapid growth put strain on systems and processes, but it can also have an impact on the very thing that is often central to a company’s success, its culture.
Definitions
- One definition of culture is, “The set of predominating attitudes and behavior that characterize a group or organization.”
- Dilution also has a couple of definitions, “1) The process of making weaker or less concentrated. 2) A dilute or weakened condition.
- Cultural Dilution then can be defined as making predominating attitudes and behavior that characterize a group weaker or less concentrated.
I coined the term “cultural dilution” over a decade ago to describe the effect rapid growth can have on a culture. We’ve been fortunate to have worked with numerous clients experiencing significant growth. In our observation, the challenge hardest for them to manage has been the impact that growth has on culture. Does this mean that a company must put a governor on growth to protect its culture? Or does it mean that it must sacrifice its culture to achieve its growth objectives? The idea that it is one or the other is a false dichotomy. Below are a few suggestions to help protect the culture of a team or organization during times of rapid growth.
Purpose
Clearly define and live the vision, mission, and values. Sounds easy, but the truth is many companies have them but fail to use them when solving problems, hiring, terminating, selecting clients, among others. These are not simply platitudes that adorn the halls and walls of a company or its website. Vision, mission, and values are the foundation and without them no company can withstand the stresses, good or bad, that it will certainly face.
Planning
Commit to long and short-range planning. Long range planning allows for greater vision and is a moving target. The plan should allow anyone at any point in time to stop and lift their head from their immediate task and remember why they are doing what they are doing. Having said that, it has been said that Vision without execution is hallucination. Therefore, short-range planning is also important. The long-range plan is the elephant. The short-range plan is how you make eating the elephant one bite-at-a-time possible. The company should have a regular cadence for re-establishing or creating new objectives. We suggest quarterly. Annual is not frequent enough, and monthly is too frequent.
Systems
Don’t wait to scale until the machine begins to fail. The best way to conduct preventative maintenance is through regular review of your key performance indicators. If KPIs are suffering, then the people, process and/or systems likely need some maintenance. This often comes in the form of re-configured or implemented technologies, training & development, (re-)development of policies, procedures, and even KPIs. We have learned that a balanced scorecard approach to planning helps ensure that goals in one area of the business don’t sacrifice goals or objectives in another. Competing objectives or goals is symptomatic of organizational misalignment.
People
I can’t emphasize this one enough. There are no sacred cows! It makes no difference who the person is. If they are undermining the vision, mission, and values they must get on board, or they must go. Teams and organizations must not allow tenured and even founding members to hold the company hostage as they resist necessary change. As employees are added to keep up with growth, oftentimes legacy employees resist the fresh perspective of new staff. Phrases like, ‘this is not how we do things,’ or ‘this is the way we’ve always done it’ are the kiss of death. If these resistors are allowed to stay, regardless of their inability to evolve, then you have a sacred cow.
Communication
Communication is critical. This can’t be emphasized enough. Great leaders must reinforce the vision, mission, and values of the organization. Additionally, they must ensure that everyone knows their purpose and position on the team and its importance to achieving the objectives. Change is hard but getting buy-in and frequently communicating the “why” behind the “what” is critical when managing rapid growth.
Flexibility
Cultures are living organisms. They must be given room to grow and evolve. The only aspect of the business that should remain constant is the vision, mission, and core values. Pardon the expression, but we’ve all heard the phrase, “there is more than one way to skin a cat.” There are many paths to the destination. Make sure not to hold too tightly to the past. Inflexibility will suffocate the change necessary to stay relevant and alive.
If you are experiencing rapid growth and the resulting cultural challenges, we hope this article is a benefit to you. If you need help augmenting your hiring process, we can help. Our proven process, world-class recruiting tech stack, and our seasoned recruiters are an ideal blend of resources to improve any recruiting process.