In my experience, this is the first sign that a company culture is about to be fucked up.
The reason is that a company culture is organic and highly dependent on the people that make it. When a company is very small, it's easy to have only the best people who also happen to fit in to the same culture, because those people naturally gravitate together. In the beginning, the company is small enough that they are not hiring for very specialised and disparate skills so much as "a bunch of smart people that work well together".
As teams get bigger, inevitably things get more structured and by trying to hold on to that initial culture, you inevitably kill it.
Personally I believe the best thing is to have small autonomous units within the business that have a set remit and are allowed to have their own culture, with the company as a whole acting to promote cross-pollination between units. There really doesn't have to be one single "culture" guided by the "core company values" because those are two different things that invariably do not mesh once you get past about 30 people. So when companies hit that awkward "teenage" size and try, they usually fail.
I also find that the claims about company culture made by most mid to large sized company are inevitably false. There might be a particular culture within individual teams (the IT team in the basement, for instance), but usually it does not permeate the entire business to the extent the HR team wishes it did.
I agree that company culture's are organic (changing) and highly dependent on the people that make it.
Having said that, the people that are there are determined by the culture. If the culture of a company is well known, articulated and understood, there's a self-selection process that happens. A given culture attracts certain kinds of people -- so it becomes self-reenforcing.
I also disagree with the notion that a culture cannot permeate across groups. There is certainly a sub-culture that can (and does) exist within groups (this exists everywhere people of like mind or activity aggregate), but that doesn't mean there can't be an overarching culture that is shared organization wide.
I've given a lot of thought and calories to this topic. My company (HubSpot) has grown from 2 people to 800 people and like Brian (OP from AirBnB), we think about this culture thing a lot.
Just because you hit the "awkward teen" size doesn't mean you are predetermined to fail at trying to have a functional , shared culture.
>If the culture of a company is well known, articulated and understood, there's a self-selection process that happens. A given culture attracts certain kinds of people -- so it becomes self-reenforcing.
That's essentially my point about gravitation, except my assertion that it doesn't scale. After a certain point, it becomes more important to hire the people the company needs, not just the people that want to work there. Below a certain size it is much easier for those to be overlapping sets.
> that doesn't mean there can't be an overarching culture that is shared organisation wide
I think inopinatus is on the right track in terms of breaking "culture" down into different things. There can certainly be certain values and principles of "how things are done" that span the whole company (note: I'm not saying processes either - perhaps 'ethics' is the right word). But that's not enough to make a culture, and trying to force one out of those relatively small commonalities is where things generally fall down.
Again I think the most important thing when it comes to scaling out is having representation in place at various levels and listening to what people at the lower levels actually want, rather than trying to dictate things in a top-down manner. It is very likely that as teams become more specialised, they will have much more individual needs that might not fit with certain aspects of the original culture. There's no reason that the shared culture can't evolve and stay beneficial to everyone - just expect the size of that shared part to shrink if you are doing it right.
The sad fact is that it's much easier to get company culture wrong than it is to get it right. I'm not going to say I have some magical solution to this because I don't, but I do wish you the best of luck with HubSpot - and the same to AirBnB of course. Just because something is an ominous sign doesn't mean anything is predestined.
One thing that I do think is quite important is that the company culture in a small business tends to be the way it is because the management structure is pretty flat, everyone has a set of shared goals and cooperation is easy. That's another thing that doesn't scale. It's very easy to break a company culture with things like poor management structure, skewed employee incentives, etc., which tend to foster a dog-eat-dog culture and company politics that very often do not exist in smaller companies. Personally, were I currently scaling a business to around 800 staff I'd be worrying most about the management structure and trying to create an environment where cultures can grow organically, while ensuring what remains consistent are the shared values, goals and company vision.
I think by focusing too much on the company culture at the top level, it's easy to lose sight of the forest for the trees. In macromanagement there's only so much you can directly control and culture isn't one of those things. That means getting the outcome you want by indirect means, even if it doesn't look exactly how you might have pictured it.
The reason is that a company culture is organic and highly dependent on the people that make it. When a company is very small, it's easy to have only the best people who also happen to fit in to the same culture, because those people naturally gravitate together. In the beginning, the company is small enough that they are not hiring for very specialised and disparate skills so much as "a bunch of smart people that work well together".
As teams get bigger, inevitably things get more structured and by trying to hold on to that initial culture, you inevitably kill it.
Personally I believe the best thing is to have small autonomous units within the business that have a set remit and are allowed to have their own culture, with the company as a whole acting to promote cross-pollination between units. There really doesn't have to be one single "culture" guided by the "core company values" because those are two different things that invariably do not mesh once you get past about 30 people. So when companies hit that awkward "teenage" size and try, they usually fail.
I also find that the claims about company culture made by most mid to large sized company are inevitably false. There might be a particular culture within individual teams (the IT team in the basement, for instance), but usually it does not permeate the entire business to the extent the HR team wishes it did.