Scaling Culture

How Being a Little Naïve Led to Big Growth

I was a speaking guest at a small business workshop the other day. We talked about business growth, prepping for M&A, lessons learned, etc. And one thing that I touched on was scale and culture. I made the point that one of the hardest things to scale in an organization is culture. This applies to organically growing your business, but especially a challenge when acquiring businesses.

I’ve been fortunate to lead in an organization where we’ve had to scale. Through various circumstances, great teammates, leadership, a trusting board, and being a little naive, I’ve been able to put my fingerprints on helping to grow an organization from $200M/year to well into the billions/year in revenues at the enterprise level. And the same growth is occurring while leading the government contracting arm of that enterprise - taking over a $180M/year company and growing it to now 4x that and poised for another big step.

Across organic growth, acquisitions, and years of urgency and noise, scaling culture is one of the most difficult things to get right.

Scaling systems is straightforward—information management, technology, talent, equipment, facilities, financials. Those can be documented, trained, and replicated. Culture is different. For us, in the early days we were creative, whimsical, a little naïve. Today, much more sophisticated, mature, and smarter about the business. But can we keep a little of that early magic in the midst of growing?

We talk about culture constantly in business—values on the wall, mission statements in onboarding decks. Yet if you asked employees in a rapidly scaling company whether they feel the culture, the answers would vary more than leadership expects.

At times there is a gap between what leadership believes the culture is and what the team experiences. This is especially true in rapid growth environments.

The Architect

I’ve heard it said that the CEO of an organization is a cultural architect. I agree. Because when you build something from the inside out, when the culture is an extension of your own values and instincts, scaling it means figuring out how to transfer something deeply personal into something institutional. That’s hard. Scaling through systems is tangible. Finance, operations, HR, proposal processes — these can be documented, trained, and replicated. You build a better process, hire good people, hold them accountable to it.

Scaling culture is less tangible. It’s a felt experience—expressed through behavior: how leaders operate under pressure, how teams interact, what’s tolerated, what’s not.

The challenge is that you can’t write culture into an SOP. Assuming the culture that got you here will scale on its own is a mistake. Growth naturally introduces more structure—process, policy, hierarchy. Necessary, but if left unchecked, it crowds out creativity, problem solving, and innovation. The safer play becomes fitting in.

The Kindergarteners Experiment

Daniel Coyle, in The Culture Code, opens with a cool study that I believe validates what I’ve observed in practice. Groups of people, MBA students, lawyers, and kindergarteners, were given the same challenge: build the tallest freestanding structure using spaghetti, tape, and a marshmallow. They were given the same rules and resources. Who would you think won?

The little nuggets did. Consistently.

The MBAs spent their time managing status. Establishing who was in charge. Signaling expertise. Protecting their position in the pecking order before a single piece of spaghetti hit the table. The kindergarteners just started building. They tried things. They failed fast, adjusted, and kept going without worrying about how it looked. Think about it like this: Early stage culture (the nuggets) vs. later stage (more mature) culture (the MBAs).

When I first read about that experiment, I thought about my own early career. Some early successes came not despite my inexperience — but because of it. I was naive to what most people would have said was impossible. I didn’t know we weren’t supposed to be able to do certain things, so we just went ahead and did them. There was a whimsical, almost reckless creative energy in those early days that I’ve had to work hard to protect as we’ve grown. As organizations mature, asking leadership for self-evaluation and objective analysis leads to a whole “who moved my cheese” dynamic.

As organizations grow, they get smarter—but also more cautious. You’re no longer naive to what can go wrong. The people who once moved like kindergarteners start moving like MBAs. Status creeps in. Risk aversion creeps in. The instinct to protect position replaces the instinct to build.

That’s a cultural loss—and one of the sneakiest, because it looks like maturity from the outside.

In a Small Company, Culture Transmits Itself

In a small company, culture is nearly self-enforcing. The founder is in the room. They model the behavior. They course-correct in real time. Everyone can see everyone, and drift gets caught early.

Coyle identifies what he calls “belonging cues” — the small, repeated signals that tell people you matter here. Eye contact (look up Coach K/Lebron exchange on YouTube for a good lesson on this). Physical presence. Attention. Turn-taking in conversation. These cues happen hundreds of times a day in a small organization, often unconsciously. They wire people into the culture before anyone has formally explained what the culture is.

When you scale, the founder disappears from the daily experience of most employees. Cultural transmission shifts heavily to middle management—and that’s where the gap often forms.

In our own organization, we’ve seen this firsthand. Survey responses sometimes surprise us. We think, “We talk about culture constantly.” What we discover is that it either doesn’t flow down—or it stops at the middle management level.

Middle management can be where culture goes to die if you’re not intentional.

Gallup’s research puts a number on this: managers account for 70% of the variance in employee engagement. Not strategy, compensation, or your values statement. The direct manager. Which means when your influence as a founder or CEO dilutes across a growing organization, what fills that gap is almost entirely determined by whether your managers actually carry the culture — or just carry the title.

Very often, managers are hired primarily for competency. Many of them absorbed the culture only partially. They’re now being asked to transmit something they may not fully own themselves. That’s not an indictment of those managers — it’s a structural reality of growth, especially in a rapid growth environment where time is short so compromise increases.

The Dichotomy of Urgency and Culture

An organization needs urgency as part of its culture—but unmanaged urgency will erode culture.

When you’re moving fast—winning work, entering markets, integrating acquisitions—the instinct is to fill seats quickly. You hire for speed over fit, skip hard conversations. and tell yourself you’ll fix it later. Each compromise feels small. Over time, they compound.

I’ve felt this during periods of rapid growth, and even more post-acquisition. The core holds—but the edges fray. You can have pockets of excellence sitting next to cultural rot, and leadership doesn’t always see it until someone who embodies the culture walks out the door and tells you why. It’s not hard to fail cultural integration in acquisitions even with the best of intentions.

Cultural compromise can’t be accepted. You have to reinforce the glue points—shared purpose, common enemies, the right leaders, the stories that make culture sticky.

The All Blacks—arguably one of the greatest dynasties in sports—embody this. In The Captain Class, Sam Walker found that the most important figure in elite teams wasn’t the star. It was the culture carrier—the unglamorous leader who enforced standards through behavior, not authority.

The behavior encodes the value. And it scales because it doesn’t depend on anyone’s presence or personality. It just is what you do here. This is repeatable, and scaleable.

Now Bring M&A Into It

If culture is hard to scale organically, M&A makes it an order of magnitude more complicated. Now you’re not just managing your own cultural drift — you’re colliding two distinct organisms and hoping they fuse rather than reject each other. What parts of their culture do you keep, which do you integrate, what parts do you want to get rid of???

I’ve been on the buy side of M&A for most of my career. And I’ll tell you how too many buyers approach culture in a deal: they don’t. Not really.

Due diligence is exhaustive on financials. Working capital, EBITDA quality, contract risk, key person exposure, legal liability — all of it gets scrutinized in detail. Culture gets a few leadership interviews, maybe a Glassdoor scan, and a checkbox that says “no major HR issues identified.” We know they don’t have a DOL claim, but we don’t know jack about their actual culture. Yay.

Bain & Company research found that approximately 70% (I think reality is more like 50%) of mergers fail to achieve their expected value — and cultural incompatibility is cited as a primary factor in the majority of those failures. The sharper statistic: most acquirers spend less than 5% of their integration planning time on culture. Meanwhile, employee turnover in acquired companies spikes within the first 18 months. And the people who leave first are disproportionately the high performers. They have the most options, read the new environment quickly, and don’t wait around to see if it gets better.

Google spent two years studying 180 of its own internal teams to find what made the best ones perform. They expected the answer to be talent. It wasn’t. The single biggest predictor of team performance was psychological safety — whether people felt safe taking interpersonal risks, speaking honestly, admitting failure. The finding of the study is interesting: who is on a team matters far less than how the team operates. This seems to validate Coyle’s Kindergarten experiment. Is your team safe to express ideas, be candid, focus on the outcome over the position?

That’s the thing buyers are not assessing when they do their diligence. They’re evaluating the talent. They’re not evaluating the operating system those people run on.

Patrick Lencioni, in The Five Dysfunctions of a Team, makes the case that every team dysfunction — fear of conflict, lack of commitment, avoidance of accountability, inattention to results — is downstream of a single root failure: absence of trust. A transaction is one of the most trust-disrupting events an organization can experience. On day one of integration, trust resets toward zero. People don’t know what the new rules are. They don’t know if their contributions still matter. They don’t know if the things that made the culture what it was will survive the new ownership. And when trust is gone, everything Lencioni describes cascades in sequence. It doesn’t take long before integration is in serious trouble and nobody can quite explain why.

A Harvard study tracking 200 companies over a decade found that organizations with strong, adaptive cultures outperformed those without by staggering margins — over 750% higher revenue growth and nearly 900% higher stock price growth over eleven years. The word adaptive matters. Rigid cultures underperformed. But strong, values-driven cultures that could evolve? They compounded in ways that no financial metric captured in a data room. If that’s what’s actually driving performance, then boom, it’s a multiplier.

There’s a lesson in the kindergarteners. They didn’t know the rules. They didn’t know what was impossible. So they just built. And they built better than the people who knew everything. A little whimsical creativity went a long way.

As organizations grow and get smarter and more structured, the challenge for leaders is to protect some of that original naivety — the creative recklessness that moved fast without asking permission from convention. I’m not advocating at the expense of discipline. Culture and discipline should complement not oppose.

Culture doesn’t scale itself. It doesn’t transmit through org charts or onboarding decks or values posters. It scales through behavior — through the leaders who model it under pressure, the managers who carry it into rooms where you’ll never be, the rituals that make the unspoken spoken, and the willingness to treat it as the serious business asset it actually is.

The right culture has to be intentionally developed and ruthlessly defended.