Big isn't always better: Beware of growing up too fast

As companies grow, cultures can become nasty and competitive. Gartner's Jim Sinur suggests how to avoid the pitfalls of getting bigger.

Have you ever noticed how exciting and flourishing organisations hardly ever last long in light of history?

It's rare that organisations grow big and endure with a positive following of constituents. It's really hard to keep a good culture that clients and employees enjoy while growing large and successful.

I would maintain that it's when management loses sight of what their changes do to the organisational culture that negative results creep in through processes. How you establish business processes that support great culture can make a difference.

Let's examine the different phases of organisational culture that seem to be on a continuum. These phases generally occur in sequence but the starting points can differ.

It's rare that any intermediate step is skipped but some can be and should be avoided.

The family
This is where the atmosphere is agreeable and all employees, vendors and clients are rife with optimism and glee. People are generally looking out for each other and the communication is really high quality.

Everyone wants the organisation to succeed and people gladly pitch in wherever they can.

There are picnics and holiday parties and a great deal of holistic caring. The movement is onward and upward.

The team
The organisation grows to a point where the personal touch ends up suffering a little bit. People start specialising and losing touch with some of the other functional areas of the company.

People are still agreeable but they tend to cluster in teams that support themselves. Some of the old contacts, from when the business was a family, hold things together.

There is still an onward and upward sense of bonding.

The machine
This is where the organisation has grown to a point where it needs significant structure, so that investments are managed to profitability in a better way, and where methodology and process are established.

It's also the key tipping point where human touch can be lost in the implementation of the methods and processes, and behaviour patterns are set.

Care must be taken to infuse people-engaging goals, rules and capabilities. There is a very delicate balance to maintain and the incline is steep.

The jungle
This is where individuals have learned to take care of themselves at the expense of other team members and functional organisations.

Individual goals are emphasised to the detriment of the whole. Customers and employees are taken for granted and management wants to create an atmosphere of competition among all parties.

Supervisors that can wipe tears are put in charge of the workers but the downward culture slide continues. The financial result trumps all and greed is the emperor.

The advanced jungle
This is where every person is for himself and mentors even eat their young. By and large, managers only care about whom they beat and how well they beat them. If you can put your colleagues in jail or out the door, you are reaching your full potential.

People are digging for dirt or covering the backsides instead doing what's important. This is truly a sad state. Many die in this avalanche of bad behaviour. This truly is a 'shark tank'.

In the diagram above I have represented these cultural phases on an upside down 'U' to show how close to the edge of the cliff we can get before falling off.

Over time cultures can experience entropy. The moral to the story is to build people and teamwork into our processes going forward, so to avoid the nasty downward slope.

Jim Sinur is a vice-president of research at analyst house Gartner.

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