How can tech companies avoid 'big company syndrome' as they scale?

To illustrate this, let’s look at two fictional businesses below:

If you had to guess, which company sounds like an established firm and which one sounds like a smaller start-up? Whilst I have exaggerated for the purpose of this fictional example, Business X is the growing start-up and Business Y looks to be suffering from what is sometimes referred to as ‘big company syndrome’.

Let’s look at three ways that you can try to avoid this big company syndrome taking effect in your business:

Prioritise your company culture and employee retention

One thing that can unintentionally change as a company grows is the company culture. First, let’s look at some of the reasons why the culture can often be better at smaller companies:

• All team members can easily be part of decision-making, so they’re already bought into the company’s direction and therefore more likely to be motivated to achieve the objectives set out.
• Each member of staff will have a bigger contribution to the success of the business and they’ll have more autonomy and influence in how they achieve this.
• Members of staff will have more direct contact with their CEO and this CEO will likely be more hands-on in completing tasks needed to move the company forward. 

So what can you do to retain this culture as you grow? Here are a couple of suggestions:

• Define and incorporate your company culture into what you do – when you’re a small company, founders may not have needed to do this as it was evident in what you do. However, if you want to retain this culture as you grow, you will need to both define your company’s values and also incorporate this into what you do (e.g. recruitment, onboarding, KPIs, meetings etc.).
• Keep an open dialogue with your employees – as a small company, leaders will have had close contact with everyone in the organisation but as you grow, a disconnect can form when the founder becomes more removed by additional reporting lines. Try to create open communication at all levels of your business and use meetings, one-to-ones, surveys, exit interviews and other forms of communication to ensure that your employees are heard.

Creating a positive culture is one way to retain key staff, but offering equity in the company is another common method tech companies look towards for employee retention. See our recent article here for information on the most popular share incentive scheme.

Stay close to your customers

As well to staying close to your employees, it’s important to stay close to your customers to ensure that your product or service is led by customer insights and feedback, and improves and innovates in line with their wants and needs.

As many early-stage tech founders will testify, they have to wear many hats. In the early days, this may include directly talking to customers for feedback on the product or service to inform the next improvements to make. However, once your company grows and you make more hires, you’ll go from being on the front line to eventually being two or three lines removed which can cause customer feedback to be lost in translation.

Therefore, you should either:

• Make time to talk to your customers to hear their frustrations (or satisfaction) with elements of your product or service or;
• Ensure the teams that do speak to your customers, feed this back internally. Your customer service team isn’t just there to support your customers and deal with complaints and issues, they should be there to inform your product roadmap or service improvements.

Surveys such as Net Promotor Scores (NPS) can be a good way to ensure you regularly look for feedback, but it’s still important this feedback is acted upon.

Have a vision and track your progress towards it

Once your company has scaled, you’ll want to ensure that you don’t grow complacent and continue to grow despite the likelihood of additional processes, stakeholders and bureaucracy. You may have already hit some of the milestones that you set out when you founded your company, so it might be time to hit refresh and evaluate your vision and future objectives.

Ask yourself, where do you want your business to be in 5 years? Once you’ve decided upon this, it’s then important to think about the objectives and milestones you’ll need to reach in that time. You’ll then be able to form some of the key objectives you’ll need to hit in years 1, 2, 3 and 4 and the KPIs and drivers you’ll need to track on an ongoing basis. Ensuring that these KPIs, both financial and non-financial, are in your monthly reporting packs and discussed with your leaders in meetings will be a way to identify possible blockers and help build momentum.

Need advice?

At UHY (East), our tech department works with many tech businesses at varying stages in their journey. Whether you’re an early-stage start-up, fast-growing or an established tech company, we would be happy to support. Please contact James Foster at j.foster@uhy-uk.co.uk or your usual UHY advisor for further advice.