If you want to successfully scale your venture, you need to prioritize culture. Gallup reports that companies with strong employee engagement experience better retention, increased productivity, and 21 percent higher profitability. But in order to achieve those results, it’s important to create an environment in which your employees can thrive.

But First, What Is Culture?

Harvard Business School Professor Jeffrey Rayport, who co-teaches the online course Scaling Ventures, describes culture as a set of shared values and beliefs that define how employees interact, solve problems, and collaborate with one another. Over time, as teams learn how to overcome challenges, patterns emerge that ultimately coalesce into shared values and beliefs about how work gets done.

“Most startups have a culture that is a direct reflection or translation of the founders’ personalities and values,” Rayport says. “And most founders are largely unaware of the outsized impact they have in instilling the culture of their organization."

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Managing Your Culture at Scale

As a startup scales, one of the biggest challenges founders face in relation to culture is de-personalizing the company’s mission and values. Although initially established by a few individuals, there needs to be organizational buy-in for those values to survive rapid growth.

“Most ventures I’ve interacted with in the scaling stage talk with an enormous amount of nostalgia about the ‘good old days,’” Rayport says. “They hearken back to those times when the organization was agile and people were entrepreneurial. But there’s nothing to romanticize. There’s culture you can manage at scale. Different stages just require a different type of culture.”

WeWork Co-Founder and Chief Culture Officer Miguel McKelvey agrees. In a recent Harvard Business School Cold Call podcast, Rayport describes the case he wrote on the co-working company and shares a conversation he had with McKelvey, who said: “Culture is not a game of nostalgia. Culture is a tool. It’s an instrument you use to drive a business to scale. You have to constantly design and redesign culture for each additional level up that the organization makes in scale, or reach, or impact, or value.”

To accomplish this, founders need to separate inputs from outputs. Although it’s easier to describe the outputs—or desired culture—a company wants with phrases like “passion,” “teamwork,” or “excellence,” it’s more important to focus on the actions—or inputs—that enable you to shape and deliver on that culture.

For example, if you want to achieve a culture of integrity, you need to find and foster employees who exemplify honor and transparency. If, during the scaling process, you start hiring just anyone without requiring those specific traits, you will eventually end up diluting your culture. Why? Because those individuals will ultimately onboard a new wave of employees who think and act in a way that doesn’t align with your core values.

“Culture isn’t some mystical thing that relies on fate,” Rayport says. “You can design for the outcomes you want.”

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By focusing on those outcomes and taking charge of your culture, you can more effectively scale your venture. In a recent study, nearly 80 percent of executives said culture is among the top five things that make their company valuable, while more than 50 percent agreed that it influences productivity, creativity, the value of a firm, and growth rates. Despite the noted benefits, however, only 15 percent said their culture was exactly where it needed to be.

To avoid a similar fate, it’s important to establish culture early, adapt it as the company grows, and prioritize the actions needed to carry out the company’s mission at scale.

“Culture sounds like a nice-to-have in most organizations,” Rayport says. “But culture should be one of the tools you use to scale successfully.”

Are you interested in learning more about how to scale? Explore Scaling Ventures, an eight-week course taught by Jeffrey Rayport and Shikhar Ghosh via our live, interactive online classroom.

Lauren Landry

About the Author

Lauren Landry is the associate director of marketing and communications for Harvard Business School Online. Prior to joining HBS Online, she worked at Northeastern University and BostInno, where she wrote nearly 3,500 articles covering early-stage tech and education—including the very launch of HBS Online. When she's not at HBS Online, you might find her teaching a course on digital media at Emerson College, chugging coffee, or telling anyone who's willing to listen terribly corny jokes.