Culture is a Choice, not a Byproduct — 2. the Tacit phase
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This article is the second of a series where I discuss how a healthy corporate culture develops from the very early days of a startup. There are 3 phases in the development of a healthy corporate culture, which happen approximately in the first 2 years of a startup growing into a large organisation. The 3 stages are the implicit phase of culture formation, the tacit phase of culture reinforcement and the explicit phase of culture acknowledgement. In this article we focus on the second phase.
Tacit culture phase
In the Tacit phase a culture has already started to develop either willingly or not, the seeds have been planted and start to bud. In this phase the startup experiences its first bout of rapid growth, going from few dozen employees to a hundred or so. It’s the phase when recruiting can’t anymore be managed directly by the cofounders.
The product and market have been identified well and funding has been raised explicitly to finance growth on a proven model.
In this phase the co-founders start losing grip over everything that is going on in the organisation, they need to start delegating even critical activities to employees they trust. Depending on the model adopted, many activities can be outsourced, yet it starts to become clear that some outsourced activities are being too expensive to keep and have to be done inside. Especially true for core value creating activities. Some organisations realise that hiring is one of those activities.
Culture wise, hiring is the most critical component of this phase, since new recruits join en-masse and dilute the existing strong — even though still implicit — culture of the founders. Quite ironically, as soon as the original implicit culture starts to coalesce in a recognisable form, even if still just tacitly recognised, it gets undermined by the dilution from the expanding workforce.
The Implicit culture of the first days, coalesces into a more established state, even though yet not explicitly expressed. The practices, habits, forms of interaction and communication, all are becoming recognisable to the trained eye and repeat consistently across the organisation. When a boss talks, do all employees agree by default, or dissenting voices are permitted? Watch out, we’re talking reality here, not empty statements.
There is still time to steer away from bad forms of culture, but it requires strong commitment from the management.
It’s a very dangerous phase because the co-founders are being so much trapped into taking care of the explosive growth the company is experiencing, that they easily lose track of real culture — if they ever thought about it, that is.
So question number one is, are they aware of this thing called culture? And question two is, are they taking care of it?
In this phase they must become aware of it if they don’t want to lose its pulse. How is the real culture of the organisation now that it is budding into a recognisable form even if not yet made explicit?
Many companies stop to culture awareness. Maybe they develop a vision-mission-values statement to circulate among employees, but the true culture of the organisation — because each organisation eventually develops one — remains tacitly agreed across the organisation in its habits, customs and real shared values.
The culture-oriented organisations take a step further in taking care of the budding culture and transitioning it from the Tacit phase to the following, Explicit phase, which is the subject of the next post.
In the next article we are going to explore what happens when the organisation grows beyond 100 employees.
I would love to hear first-hand experiences of founders who lived this phase and successfully grew their startups!
I’m Leonardo Zangrando.
I’m passionate about unlocking potential and making it shine in people and organisations.
I help people fulfil their true potential and become what they really can be.
I help humanise organisations and create a culture for innovation and evolution.
Follow me on Twitter and meet me #IRL at Launch22 incubator in London.
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