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Business growth is a major milestone worth celebrating. It represents the outcome of strategic planning, market demand, and operational excellence. While this expansion signals success, rapid scaling can present unexpected challenges to your company culture and employee morale. As your workforce expands to meet increasing business demands, the very foundation that contributed to your success may begin to crack under pressure. Without proper attention, the vibrant culture that attracted top talent and fueled innovation can become diluted, leaving employees disconnected and engagement levels plummeting.

Company culture plays a pivotal role in long-term success. A positive culture sparks motivation in employees and fires up their engagement levels. Workers who are engaged tend to be more productive and come up with better ideas and solutions. In fact, businesses that proactively manage their company culture:

  • Achieve an average 10-year revenue growth that is 516% higher than those that do not
  • Have 30% higher levels of innovation
  • Have 40% higher levels of retention
  • Employ workers who are 87% less likely to leave
  • Outperform their peers by 147% in earnings per share

Source: (1)

If your culture begins to decline for any reason, including scaling up, engagement, retention and productivity can decay along with it.

WATCH OUT FOR THESE GROWING PAINS

The signs of a failing company culture due to rapid growth may be fairly obvious, but it is imperative to take a proactive stance in watching out for them.

Communication Dwindles

Keeping the lines of communication between colleagues open is essential at all levels of the hierarchy. When culture starts to degrade, communication tends to follow suit. You may notice frequent miscommunication and misunderstandings, a lack of interaction between teammates and an overall feeling of disconnection among coworkers and managers.

Employee Dissatisfaction and Turnover Increase

For better or worse, employee satisfaction and retention go hand in hand. As employees feel increasingly unhappy with company culture, they tend to start leaving. You could not only lose some of your best people, but you also face the significant expense of replacing them.

Mini Cultures Form as the Workforce Expands

Maintaining consistency in culture is relatively easy in a small organization. However, as the workplace expands and you have more managers presiding over more teams, you may see mini cultures emerge. This development is problematic because these mini cultures might clash with the values of the company culture and negatively impact it.

Goals Become Misaligned

Fragmentation can occur if any teams pursue goals that are not aligned with the overarching goals of the organization. They may have good intentions and genuinely believe they are working towards the best interests of the business, but it can still cause problems. A bigger workforce makes it challenging to ensure that all teams have the same goals in mind, as well as redirect their efforts.

Core Values Get Lost in the Shuffle

Similar to goals, it is easy to lose sight of the company values that act as pillars of the culture. They can get lost in the shuffle as the organization grows and leadership focuses on hiring instead of embodying and reinforcing these values. If you notice that employees who once championed company values seem apathetic about them or resentful of them, you should consider it a red flag.

Teams Become Siloed

Although it is natural for teammates to work with each other more often than they do colleagues from other teams, complete fragmentation is a bad sign. When teams become siloed, they essentially work in a vacuum, which is problematic in several ways. A lack of collaboration can lead to potentially costly errors, degradation in inspiration and ideas, and communication roadblocks.

Leadership Drops the Ball

Not everyone handles company expansion well, and this includes some members of leadership. They might falter at properly communicating and reinforcing the vision of the organization, or they might struggle to adapt to changes that naturally happen because of scaling up.

This is problematic because employees look to their leaders for direction and a sense of how well growth is going. Furthermore, workers take their cues from leaders on how to handle scaling. If leadership seems confused, overwhelmed or unhappy, employees tend to follow suit.

FOLLOW THESE 4 TIPS TO PRESERVE COMPANY CULTURE AND MORALE

Fortunately, you can thwart all these undesirable scenarios by implementing the following best practices as your workforce grows.

  1. Avoid Slipping into Mediocrity

Conducting quality assurance becomes more challenging as you have more moving parts – in other words, employees and teams – to manage. Identifying people who are just squeaking by at the bare minimum is easier when you have less workers to monitor. Mediocrity can hurt your company culture by sending the message that performance and the quality of work no longer matter.

This area is where keeping the chain of command firmly linked is crucial. Proactive, communicative and dedicated managers are your best asset, because they can best monitor their own team. After all, managers interact with their reports daily, or close to it, giving them an intimate look at who is truly making a concerted effort and performing well.

Meet with your managers regularly – ideally, weekly or at least bi-weekly. Instruct them to be prepared to share with you how every single one of their reports is currently doing, including who is exceeding expectations, who is putting in minimal effort and who is underperforming. Then, and this is key to upholding a positive culture, instruct each manager to follow up with their best performers and those who fell short. The former should receive accolades, and the latter should get mentoring. If this guidance does not work, the next step is a warning that there will be serious consequences if the lackadaisical employee does not try to improve.

PRO TIP: Consider an offsite meeting dedicated to training leadership and managers on how to measure and enhance employee performance. You can bring in speakers who are experts in this area and ask them to take attendees through real-world scenarios.  Or, you can work in breakout sessions so that attendees can better understand employee performance challenges and define company-endorsed solutions.

  1. Prioritize Ongoing Communication and Transparency

The importance of communication and transparency cannot be overstated. Since these two principles are also among the most vulnerable to scaling up, you should place them at the top of your priority list. Do not leave them to chance. Instead, establish a structured system for incorporating them into your organization’s hierarchy and operations.

For example, you might hold an all-company town hall each time your business adds more employees. Include a question-and-answer session at the end so that workers have the opportunity to get their burning questions answered and express any concerns. This is just one example of how you can create and maintain a culture that honors communication and transparency.

  1. Empower Your People

Some employees might feel like they become invisible as the workforce grows around them, like they are now just a number among the masses. No one is immune to this feeling, and that includes managers.

You can circumvent this scenario by making it a point to empower your people. In other words, find ways to let them know that you trust their judgment, vision, ideas, and solutions. Encourage employees to take the initiative and be vocal about how they can help drive success for the business. Managers should do this for their reports, and leadership should do this for managers. The more empowered people at all levels in the organization feel, the more it will strengthen company culture – not to mention making a positive impact on employee engagement and productivity.

  1. Micromanage the Hiring Process

Although micromanaging is rarely a good practice to follow, the hiring process is one of the few exceptions. Why? Every new hire can have a good or bad effect on your workforce’s morale and culture. This reality is not something to take lightly.

Give recruiting talent the gravity it warrants and keep a firm grasp on your company’s hiring process. Start by establishing firm, concrete parameters for hiring managers. Stress that adhering to these principles and practices is nonnegotiable and explain the reasons why. From there, require hiring managers to run the final candidates for any role by a member of leadership for review. By following this procedure, you ensure that no new hire slips by without getting reviewed by leadership.

LEVEL UP WHILE GOING BIG

Bigger really is better if your company culture and employee morale do not suffer as a result. By using the tips here as a roadmap, you can level up employee satisfaction, engagement and performance even as you expand your workforce.

 

Want to make sure your next business event makes a positive impact on your workplace culture? Connect with Gavel International!

This article was last updated on June 25, 2025

Jeff Richards
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