Growing sustainably: Why scale-ups need an inclusive culture strategy

By Louise Kyhl Triolo and Martin Holm

At scale-up phase, all venture capital-backed businesses face the same imperatives. They have to grow in a very short timeframe; achieve operational efficiency at pace; and continue to show they are moving forward on their investment targets.

To meet these goals, scale-ups need people who can drive high-level performance in a pressured environment. They have to achieve excellent employee engagement without having the resources to remunerate this talent competitively. And they also have to have an eye to future readiness, hiring the people they need today who can also sustain progress tomorrow.

The solution to these issues is for scale-ups to boost and secure their talent pipeline, enhancing their ability to attract, develop and retain skilled individuals to meet current and future needs. A robust pipeline is a crucial element in scaling successfully, because it ensures operational execution, ongoing innovation, and the ability to adapt to changing market demands.

The foundations of that pipeline, and of a talent strategy that is fit for both short- and long-term growth, is an authentically inclusive culture: something that VC-backed scale-ups have historically lacked the intention and time to build. But by putting their energy and focus into inclusion, scale-ups can reap the benefits of increased retention, enhanced employer brand, employee engagement, and the ability to achieve better solutions by tapping into a diverse workforce.

Rapid access to talent is a key scaleup challenge

Many scale-ups struggle to find the right talent at the right time, due in part to their lifetime uncertainty: it’s a high-risk environment where only a small share of scale-ups enjoy exceptional success. These are not universally appealing characteristics in a workplace. There is also a particular challenge around attracting a diverse pool of talent that does want to work in this type of environment. These people often have a desire to continuously move on to a new challenge, leading to high turnover.

The barriers to creating a robust talent pipeline are even greater for VC-backed scale-ups, where achieving scalable and sustainable growth within the accelerated timelines of VC ownership is considerably harder. Additional hurdles include lean teams with precise skills and experience requirements – with no room for passengers. Every hire will have a specific job spec and will need to hit the ground running.

Sustainable talent pipelines are built on inclusive cultures

The key to opening the door to rapidly access scale-up talent is building sustainable pipelines – and these are established by putting in place the right foundations for teams to better work together towards common goals.

Talent pipelines aren’t simply a matter of assembling teams with the right skillsets to enable business outcomes. What is also necessary is creating an inclusive, equitable workplace that fosters employee wellbeing, psychological safety and encouraging all teams and employees to share these values. This has historically been a challenge for scale-ups, as they have little to no margin in their funding, workforce or timescale to make personnel or policy changes if their culture is failing. Scale-ups therefore need to invest some of their valuable time and money in shaping a unifying culture within the business. By using universally understood vocabularies around diversity, equity and inclusion to have conversations that address their recruitment, retention and talent development strategies, they can foster the culture they want.

During this process of refining culture-focused recruitment policies, scale-ups can benefit from a perception shift – from ‘culture fit’ to ‘culture add’. A common trend among those looking to hire for culture is to look favourably at those who already fit in – people with the same background, experiences and viewpoints. But scale-ups have to think bigger than this if they want to hold their own on a larger playing field. They have to weave diversity into their culture, and ‘culture add’ means looking at diversity in all its dimensions and constructing a team from talent that will tap into the business culture and enhance it, rather than overwrite it.

A working example of how this kind of change can be enacted within the scale-up universe is a project we undertook with a VC firm to support their early-stage portfolio companies in understanding the team composition they needed to grow quickly and sustainably. We took each of the VC’s companies on a pragmatic, focused, six-month journey to build awareness of the need for diverse, culture-add talent, equip them with the skills to find the right people, and co-create an easy-to-understand playbook with practical tools and methods to diversify recruitment and create efficient teams. These companies, initially sceptical about the critical role of culture for future growth, became convinced that nurturing a diverse, inclusive culture was the route to sustainable scaling.

Embracing the culture imperative

It’s easy for VC-funded scale-ups to overlook the inclusive culture imperative when facing the day-to-day challenges of scaling up. But it’s paramount that these businesses strategically invest in ways to access, develop and retain the right talent to enable them to grow sustainably. When building an inclusive, diverse culture is prioritised from day one, the company gives itself the best chance to succeed.

To discuss any of the themes raised here, or to explore how we can support you in finding the right talent for your business, please get in touch.