When small businesses are looking to expand, the practicalities of space, resources and cost are often front and centre of plans. But business owners need also to pay close attention to the more intangible aspects of what makes their organisation successful. It is important not to lose sight of culture and team dynamics, and how they might have to evolve as the business grows.

Creating a safe environment 

Psychological safety is a vital foundation for a successful company culture. It involves creating an environment where employees feel safe to express their ideas, be creative, engage in debates and learn from their mistakes and failures. Growing businesses need to develop a robust set of values and beliefs and communicate them effectively. 

While it is easy to focus on successes, it is equally important for businesses to feel comfortable admitting their mistakes and learning from them, particularly when they are expanding. This openness not only helps with resolving issues but also with preventing future errors, thereby nurturing a culture of continuous improvement.

Emphasis should also be given to integrating health, stress management and psycho-social risk awareness into the organisational culture. It can feel like a big step to formalise this approach in a small organisation, but doing so can create a supportive environment that promotes employee wellbeing and enhances productivity.

For example, balancing a high-energy culture – which often involves long working hours – with employee wellbeing is challenging and requires transparency and open communication. Leaders should model the behaviour they expect from their teams but also show flexibility for individual needs and provide support for personal issues if possible. Practical steps can include implementing stress risk assessments and mental health policies, such as resilience training and flexible work arrangements. 

While the practicalities of flexible working can seem daunting for small businesses, Lorna Feeney, Mental Health and Wellbeing Practice Leader at Marsh Commercial, say it’s an important development that offers valuable benefits for employee wellbeing. “I recently worked with a client who, since the flexible working policy was introduced in April 2024, had 49 out of the 50 people they employ apply for it. And they managed to accommodate every single one,” she says.

A holistic approach to employee health not only benefits the individual employees, but also contributes to the overall success and sustainability of the business. A positive workplace atmosphere promotes loyalty and engagement, both of which are essential for long-term growth.

Growing in the same direction

To build and develop a successful company culture it is vital to ensure that every employee understands the purpose behind their work and the direction in which the company is headed. This needs to be communicated and lived by the leadership teams. 

It is not enough for employees to merely know what they are doing; they must also understand why they are doing it. This alignment is crucial for scaling a business, as it ensures that everyone is working towards the same goals and the business is growing in the same direction. As Kerri Hollick, Owner of consultancy Before the Box, puts it: “Much like rowing a boat, all team members must pull in the same direction to move forward effectively.”

Maintaining culture in a growing business

As businesses expand, maintaining the established culture can become challenging. The influx of new employees brings in diverse perspectives and ways of working, which can shift the existing cultural dynamics. It is crucial for leadership teams to be mindful of this and take proactive steps to preserve the core values and beliefs of the business. 

Regular communication, training and team-building activities can help reinforce the desired culture and ensure that new employees are aligned with it. This is particularly important in a hybrid working environment. For Romesh Jeyaseelanayagam, Founder of The FD Consultant, culture is also driven by and aligned with performance reviews. He says: “If you reward value-driven behaviour for fulfilling areas that are aligned with the company’s culture and values, it is a powerful incentive and constant reinforcement to employees as the business grows.”

Employee surveys present a more informal option to engage employees. Feeny points out that employees are four times more likely to feel engaged when they have an outlet they are able to respond to, such as a survey. She adds that one of her clients was initially reluctant to conduct a survey, but after running it and taking on board subsequent feedback, the business experienced increased productivity, more positive morale and lower staff turnover.

As the business grows and when employees adopt more senior roles, delegation also becomes an integral part. Businesses need to ensure they recruit the right people, communicate values and get their employees’ buy-in, so they can trust them to do what needs doing. As Jeyaseelanayagam says, “Growing a business is never a sedate lifestyle. It is hard work and high energy, so delegation is one of the most important skills at senior level.” 

Attracting and retaining the right team while scaling a business

Businesses need to know what personality types the business comprises, in terms of communication and working style. Instead of hiring people who they like or who are like them, growing businesses need to recruit people who elevate its success. This might involve recruiting more creative or analytical personality types, depending on the nature and needs of the organisation. As Hollick highlights: “We can’t just keep adding the same people but in more numbers and expect a different output.”

While this may present a different approach, ensuring the team is ready to embrace it allows businesses to successfully move on from a founder-led to management-led organisation and scale the business.

Outsourcing and offshoring

Lots of scaling businesses have to manage their resources carefully. In the UK, changes to National Insurance contributions and minimum wage rates have resulted in significant increases to the costs of employing staff, and the proposed Employment Rights Bill is likely to add further costs. 

Outsourcing and offshoring can offer access to expertise and experience at lower and more flexible costs than hiring someone full time. For expanding firms, these options can also seem less of a commitment and lower risk. Jeyaseelanayagam adds: “Having a fresh pair of eyes from someone who is not in the business day to day but who you trust can be a great thing.” However, it can also be more of a challenge to maintain company culture and values with teams outside the office or even the country. Ultimately, a strong, supportive culture drives long-term business success and sustainability.