Leanne ElliottPicture this. You've built something special. Your team of 15 feels like family. Everyone knows everyone. The culture just works. But now you're staring down growth, maybe to 50, maybe to 100 employees, and there's this gnawing fear. What if scaling breaks everything we've built?
Josh LevineI got a call from the CEO to say, help, we're at 250 employees. We are getting investment to grow to 400 in the next year. And I just don't understand what's going on. People used to be nice here. And now, you know, we had a no assholes culture or we had an open door policy culture and things are starting to change. And I looked up and I realized that it's just not what I want.
Al ElliottThat is Josh Levine, a work futurist, author, and culture consultant who's helped companies like Credit Karma navigate exactly this Growing your team and keeping a great culture is the nightmare which keeps most founders up at night. And Josh is going to explain there's a magic number where everything changes.
Leanne ElliottIt's not 100. It's not even 75. According to Josh, your founder's culture starts breaking down at just 50 employees. That's when the physics of culture fundamentally shifts.
Al ElliottBut here's the thing. Josh says you can scale without losing your soul. It just requires something most founders hate doing.
Leanne ElliottThis is Truth, Lies and Work, the award-winning podcast where behavioral science meets workplace culture. We are brought to you by the HubSpot Podcast Network, the audio destination for business professionals. My name is Leanne. I'm a chartered occupational psychologist.
Al ElliottMy name is Al. I'm a business owner.
Leanne ElliottAnd we are here to help you simplify the science of work. After this quick break, we'll discover why your beautiful founder's culture has an expiration date of exactly 50 employees. How to transform implicit behaviors into explicit values that actually scale, and why Gary Ridge's WD-40 approach proves you can grow without becoming soulless.
Al ElliottOh, and Josh is gonna reveal the one mistake that turns values into expensive wallpaper. And also, we'll talk about the recognition trap that destroyed Wells Fargo's culture. See you in just a second. The dirty little secret is that most businesses think they know their customers. They have the data, the records, the history, but it's scattered across 3 teams, and 4 systems, and in our case, about 216,000 spreadsheets, which means nobody can actually use it.
Leanne ElliottWhat you should be doing is using HubSpot, because why? HubSpot connects it all— every interaction, every support ticket, every conversation— into one platform every team can work from. So when sales talks to a customer, marketing already knows the full story. And when you know more, you grow more.
Al ElliottNice. Check out hubspot.com, the agentic customer The platform for growing businesses.
Josh LevineMy name is Josh Levine. I'm a Work Futurist in North America, focused on the power of company culture to change bottom lines and people's lives. And my job on this earth, I believe, is to convince more businesses about the power of company culture and how it needs to be a rigorous business tool that can be deployed and employed in a way that makes business run even better and people super, super engaged. And I have a book, a podcast, and a company all called Great Mondays.
Al ElliottLet's talk about someone who's maybe going and they've got the 15th employee and they're looking to grow maybe to 100 employees over the next few years. Talk me through what they should be thinking about, what transition they're going to go through.
Josh LevineWhat happens, let's call it the physics of culture, is when you grow, you start with a small group of people and you know all of those people. And it is as mammals, we look to our leaders for what success looks like. And this is the foundational kind of a pixel of culture, and you're going to look to the leaders. And so your founders are the ones that are establishing— you may not even realize it— are establishing how you work. So culture is the cause and effect of every decision that you make. And so I center my definition on choices and decisions. So we're talking about business decisions, big and small. When You are smaller as an organization. That behavior, those choices are watched very closely by your colleagues and your employees, those individual contributors. Now you think about growing as an organization, and what happens is the larger the organization, the greater the distance between The individual contributor and the leaders, and you have additional leaders in between. And so there's a few things that are going to happen. That distance is creating a little more space. There's less fidelity between what they're saying and what you're doing. And what starts to happen in your Your listeners, your community will not be surprised to hear is that silos begin to form. Silos can be within particular functions or in particular locations, groups. In 1992, Robin Dunbar, scientist, did an experiment, an observational experiment to test the cognitive limits on stable social relationships. And he went and observed tribes of chimpanzees. And what he found was that the upper limit was 150 individuals. Beyond that, the relationships, the amount of energy it took to build those relationships within that tribe, within that group, was more than the benefit. So if you think about a chimp either nurturing a youth in the group, right, or an adult male going out and hunting or protecting, that all works until about 150. And when we're talking about chimpanzees, we're talking about life and death. When we're talking about work, even though it can feel like life and death, it's not. And so the amount of energy that we're willing to put into the system to learn who, build relationships with all of these people is going to be a lot less because goddammit, I'm busy. I got things to do. And so what I've observed is that number actually comes down.
Leanne ElliottYeah.
Josh LevineAnd the number, when we're thinking about silos, the number is somewhere between 50 and 100. And so when your organization, you can have a founder's culture up until about 50 employees. You probably didn't need to pay attention to it if you didn't care about it. Then once you start to grow beyond that, it becomes a little bit bigger. Not impossible to continue to be consistent, but it is a moment when that transition happens from a founder's culture to a more organization-wide culture. Because of that space and that distance between who the employee is and the leaders, you're going to find that other groups that are naturally forming, which aren't bad, by the way, inherently, they're going to establish their own cultures. Also not bad. That's not a bad thing in and of itself. But what happens is, and when I get the phone call from a panicked founder, and this happened with the company, there's a company here in the United States called Credit Karma, and they were acquired by Intuit, who were in charge of—
Leanne ElliottCredit Karma.
Josh LevineThey run that product. QuickBooks, I think everybody knows more about them. So they got acquired for a gazillion dollars. It was a lot of money. Credit Karma, the product is a free credit tracking app. Really nice, really well designed. And then they sell you credit cards on top of that. That's how they make their money. Okay. So very valuable to Intuit. Before that, I got a call from the CEO to say, help. We're at 250 employees. We are getting investment to grow to 400 in the next year. And I just don't understand what's going on. People used to be nice here, and now we had a no assholes culture, or we had an open door policy culture, and things are starting to change. And I looked up and I realized—
Leanne ElliottWhat?
Josh LevineThat it's just not what I want.
Al ElliottSo can you explain what a founder's culture is compared to someone over 50? And what would you call that?
Josh LevineSo a founder's culture, um, and this is going to happen regardless, this is going to, if you don't do anything, this is what's going to happen, which is the leader is the one to set the tone about how decisions are made and what's most important. If they show up late to meetings, everybody else is showing up late. If they are talking about mistakes that they made in public and how I've learned from them, then everybody's going to see and feel that permission to talk about their mistakes. If there are, if the leader shows up in a suit and tie, everybody else is going to tend to dress more formally. So it's even as practical and tactical as that.
Al ElliottYeah.
Josh LevineSo that's going to be a founder's culture. And what you want to do, and what many founders are loath to do, is say, I actually aspire to more, and I'm going to put our culture down in a formal way and say, here's what we're looking for. Here's how we're going to do it. And part of the problem is that the founder has to let go of that authority.
Leanne ElliottYeah.
Josh LevineAnd they have to endow everybody else with more authority. And so you give everybody more of a framework to act and understand, right? The tools to understand how they should be acting. How I am going to deliver on an ownership value is going to be very different than how maybe a sales leader might do it, right? Practically speaking, right? And so by formalizing it, it becomes an organization's culture. So organizational culture.
Al ElliottYeah.
Josh LevineAnd that is when you can start to scale it, just like anything else. Oh, we got to get some software in here to be able to scale our onboarding, to be able to scale our hiring or reviews or whatever it might be, how we collaborate. We need to create a system. We need to systematize this in order to make sure that everybody's going, oh yes, This is what my ex— what is expected of me, and here's how I'm going to do it. And my manager's always talking about these principles or these values, and they understand how they need to manage or lead or act or decide how to make choices regardless of where they are in the organization. And so it becomes this scaling effect and The, the problem is that most organizations show up at 200, 300, 400, 500, and it has shifted from a founder's culture to an organizational, an organization culture, but nobody knows it. And so all of a sudden the founder's like, why don't I have the influence anymore? Why can't, why is this changing? And so that is why it's really important. When you're scaling, to be able to, to pull out and talk about culture, not just as a subset of HR, HR's job, or the cocktail party, or the swag, or whatever it might be. We need to be thinking about it in a much more rigorous way. And that way we can then, when, when scaling issues show up and an organization is going off in the wrong direction, or the sales team You know, they're notoriously, you know, you're going to have a high-performing asshole in there and you can have that conversation. And it's like, wait, I thought you said you wanted us to sell more. Yeah, but not at the cost of denigrating your colleagues. And that's one of our values. That's what we can talk about. So my hope is that everybody listening makes that leap, understands that culture is important and putting a little bit of effort into identifying, codifying, and communicating Early is going to help set that framework. Now those things can change; they should change. Values can change, but putting it up there and making it part and parcel of your organization and how you bring people in and how you reward them and how you talk to them and lead them—that's going to be a make a big difference once you you know prep for. that hypergrowth stage.
Al ElliottSo up until 50, the founder kind of sets the culture. Above 50, then it's down to, I'm guessing you define some values and then the managers are the ones who are to ensure that, or the senior leaders, the ones to ensure that those values are upheld.
Josh LevineIt depends on the organization, depends how distributed they are, depends how, you know, many folks are out there, but you get the point. So whose responsibility is it? I would push back and say it's everybody's responsibility. Everybody's responsibility, but, and as a manager, you are implicitly a leader and you need to make sure that your team understands that it is important to be thinking about these values. So I'm sure many people, you and I included, have experienced this where they launch or a company might launch values and then it might be on our computer screens. It might be on our security tags or whatever it is, but no one ever talks about them again. And it's— that is the common way that folks, that leaders or executives will think about values because they think, well, once I put it up, my job's done. That's not— that is the starting point, not the ending point. And that's my— that's the premise of my whole mission is No, it's not just, you know, the one thing we do 2 years ago. It's actually something that we have to talk about and invest in. And the rewards, the returns are enormous, but they're not immediate. And so it is a long-term investment and you have to believe it because if you just launch values and then forget it, You're worse off than if you hadn't launched values in the first place. To get back to your— to answer your question, who's responsible for ensuring these values? Well, the leaders need to demonstrate and model that they are important. They need to remind people that this is something that's important. They need to talk about it because as much as I think culture is the most important thing that a business can do, Most people don't, and they get busy doing the things that a business is supposed to do. This is a fundamental tool that doesn't have a direct, immediate connection. It is not go out and make 100 phone calls and sell more software, and you're going to see the result. It needs to be something that you believe deeply, and it needs to be something that is continuous. It is part and parcel of how you do your work. And if you lead as, if you model that, if you lead it, if you talk about it, if you manage, if you establish a training program to help managers understand what it means, because this isn't easy. You might have 3, 4, or 5 values, but those things, those values actually have definitions and they have comprehension. You've got to understand what they are. And you have to apply them. And changing your behavior is a very hard thing to do because you have an instinct and you have pressure, time pressure, budgetary pressure. And so you're fighting against all these sort of normal functions of business, and that's why it can feel hard. And that's why it can be like, ugh, enough already. I'm exhausted. Only after you've invested in it for 1, 2, 3, 4 years, and then you start to see the results of an organization that understands people who understand that there are rules of the road, there are expectations, and I will act on this these pieces, these parts, and begin to deliver in a way. That is more productive, more effective, more efficient because there is clarity. There's a common goal, a common understanding. And I don't feel like my work is underappreciated. I don't feel like I'm moving in this direction and then we shift and go in this direction, then we shift and go in this direction. You may have new initiatives, but those values stay the same. How we do it, it is something that we are going to do together.
Leanne ElliottThe science backs this up. Somewhere between 50 and 100 employees, those informal cultural norms that just happen naturally will stop working. The distance between leadership and employees becomes too great, and that's when silos form. That's when you get the panic call Josh mentioned. People used to be nice here. What happened? After the break, we'll dive into Josh's solution, values that actually work as business tools, not wall decorations. Did you know that the UK's number one management podcast, that's us by the way, and the UK's number one marketing podcast are both on the same podcast network?
Al ElliottWe actually have a lot in common. We both use behavioural science to help people do better at work.
Leanne ElliottAnd we both had to wrangle Rory Sutherland on an episode.
Al ElliottAnd 2 out of All 3 of us are devilishly good looking. And you're not going to say which. Phil, host of Nudge, UK's number 1 marketing podcast. It's brought to you— we need to do this in 3s— the HubSpot Podcast Network, the audio destination for business professionals. Seamless, seamless. Tell us about your latest episode, Phil. We've just done an episode on fake fandom and how New York indie bands are paying agencies to create fake TikTok videos about how much they like their work. And we talk about the behavioural science behind fandom and how that encourages people to enjoy the music and all of that good stuff, and do some big things about how this affects the world of politics, business, and brands as well.
Leanne ElliottIt is. It's such, it's such a good show. Of course, you'll hear all the stuff you want to hear about how to grow your business by using behavioural science in your marketing. But there's also just some really interesting episodes that'll be right up your street. Personally, I enjoyed Can balsamic vinegar make beer taste better?
Josh LevineIt can.
Leanne ElliottAnd are we all just status-seeking monkeys?
Al ElliottI am. Go and listen to Nudge wherever you get your podcasts.
Leanne ElliottBut come back.
Al ElliottYeah, come back.
Josh LevineDefinitely come back because Nudge isn't as good as this. So come back.
Al ElliottI'll cut that out. Keep that in.
Leanne ElliottWelcome back. Values is such a buzzword, but people rarely do more than come up with some words that they print out and stick on a wall somewhere. Josh believes that values are the most important thing you should be focusing on when you start to hit that magic 50 mark.
Josh LevineHere's the practical tip, the takeaway tip. When we're thinking about an organization that's starting to hit 50 or hit 100 or hit 200, you want to very quickly think about how do you identify what are the most important things, and we're talking about choices and decisions, Most important decisions that are going to move the needle? How do you codify them? How do you make sure that they get written down? And then how do you articulate that? How do you put that out in the world? Now, the tool that I use are values. So when we're thinking about the 6 components of culture, that's the second component, values. And values are the 3 to 5 Most important choices or decisions that are going to move the needle for you in the next 3 to 5 years. And that is, and I don't particularly care if you call them values, it can be principles, they can be leadership actions, whatever it might be. But what it does is, and here comes Josh from brand strategy, Josh, which is where I kind of cut my teeth. Is it is a container, a cognitive container for communicating with everybody. What am I expecting? What am I expecting of you? How are you making choices? The silos in and of themselves aren't bad. The way that they operate, they're going to have their own ways of operating. That's not bad. But what we have to be cognizant of is the expectations that we have around the organization that are the most important, that are the things that are going to make or break, that you want to invest your time, energy, attention into. That is what is going to be the connective tissue across an organization as you continue to grow. When you're a founder and you're hitting 35, you're hitting 45, you're hitting 55, move from implicit culture, implicit values, implicit behaviors to explicit values, explicit culture, explicit behaviors. What do I mean by that? I'm just doing what I do and everybody follows along and they're going to do that too. To the reason why everybody I'm doing this is because of X, Y, and Z, because it's important for us to own the work as we grow. For example, I want to make sure that a single person is responsible for this particular, you know, for each particular project. So we don't lose that. I want to make sure that as we grow, we don't throw people under the bus. We don't make choices that are bad for our community. We don't have trade-offs that denigrate our peers or our colleagues. We hire the best people, and that doesn't mean—
Al ElliottYeah.
Josh Levinethat they happen to have the same skin tone as you or come from the same university. These are all the things that are important when you're scaling. And so you need to think about how do you articulate the 3 to 5 things that are most important. So one of the components of culture is recognition. Everybody has been part of a recognition or rewards program. So that's not a surprise.
Al ElliottYeah.
Josh LevineThat's not a big aha. The problem with most recognition programs is that they reward the wrong thing. Recognition programs should be built to reward and recognize values-driven behaviors. It is a tool for emphasizing, reprioritizing, and Underscoring the choices that people are making, because there are too many examples throughout modern history of organizations that have turned the screws on recognizing and rewarding output, causing poor behavior to get to those. I'm talking about here in the United States, the banking system, Wells Fargo, about a decade ago. They needed to pump their quarterly numbers. And so they essentially were rewarding their personal bankers to open more new accounts. And so, you know what they did? I mean, some of them were able to have that conversation and do that honestly, but there were people were opening fake, false accounts. Because they were being rewarded and worse, maybe even disincentivized with punishment. How come you didn't hit your numbers? And that caused a massive problem within the organization when it was exposed. And of course it was exposed and they had to, there was like leadership turnover, there were lawsuits. It was awful. And so when we think about rewarding values-driven behaviors, We're talking about rewarding how we get to the outcomes. If we want people to innovate, then we need to reward taking risks, smart risks, and making mistakes. Because you can't just tell people to do new things louder. You have to go to the cause.
Al ElliottYeah.
Josh LevineYou have to allow them to make mistakes, to experiment, to, you know, end up in dead ends. It's just not going to succeed without that. And that's like, that's one of my favorite examples. It's because all the, when, when innovation became such a big buzzword, all these leaders were looking around and it's like, how come you're not innovating everybody? You need to do more innovate. You need to create more things. But then on the other hand, they were like, oh, failure's no good. Why aren't you doing, creating more new things? You're doing it wrong. So what we really need is to be, we need to define what it means to make good decisions that drive great outcomes, right? We are talking about bottom line. We are talking about making money. We are talking about creating value. So do the hard work. Reverse engineer to, how am I getting to the 3 to 5 things that are the most important ways that we're going to get to do our work better? If it's a small organization, those 3, 5 things are going to be different than a massive global enterprise. Those things are going to change. You need to make sure that you understand Where you are now, reevaluate what those priorities are, and then move forward with that.
Leanne ElliottThe Wells Fargo scandal is a textbook case of what psychologists call goal displacement. Employees were rewarded for hitting a single metric, opening more accounts without regard for how those targets were achieved. Under intense pressure, many took shortcuts, creating millions of fake accounts to meet sales goals. It worked on paper. But ultimately cost the bank billions in fines and destroyed trust. When organizations focus only on outcomes, people will find the quickest route to those outcomes, even if it damages the system around them. By contrast, rewarding behaviors that align with values such as transparency or integrity, collaboration helps create the psychological safety teams need to speak up, challenge poor practice, and act responsibly. And that word Josh keeps returning to— trust. In distributed organizations, trust is no longer a byproduct of proximity. It can't be left to chance. It has to be intentionally designed into processes, incentives, and communication systems. Trust has become the new currency of modern work.
Josh LevineThe bottom line is you are building trust when you have values And they are well explained and they are used to help you, help you and your team make decisions. And you can make a bet, you can make decisions better. And that is rewarded and recognized. Then you're building trust. And trust is the holy kernel at the center of all of this. Trust that I am going to be doing the right thing. I understand how to make this decision. Trust that if I mess up, I'm okay. I'm not going to be fired. I'm learning. Trust that if I ask somebody else to do something, they're going to do it. Trust that the decisions my leaders make are aligned with those values. Trust in other people that they have your back. And when you can actually This is where the ROI comes in because it does take a lot of energy to make this go. And I'll tell you one more thing, and this is why it's becoming even more important because we are working more and more in distributed environments. I don't see you anymore. I don't see you as much in person. And if you don't invest in this, invest in those relationships, invest in those trust-building exercises, That group dynamic, that stickiness, that cohesiveness goes down and down and down and down. We have to, we can't just say, great, we're giving up square footage. I'm going to save all this money and we don't have to come in. You don't have to commute. Ta-da, everything's going to be just as good. You have to replace it. With the building and strengthening of relationships, the building and strengthening of trust that used to occur as a byproduct of the square footage that we shared. It's great. It's very scalable if you get it right. Unfortunately, most leaders, most businesses, most organizations, most managers don't understand that that is part of their job now. And they need to build that into the work that they're doing with their teams because distributed work is, can be really productive if you have trust.
Leanne ElliottIf you are thinking this all sounds nice in theory, well, Josh shared an example that proves it works at scale. Gary Ridge from WD-40 is one of Josh's most popular guests, and he didn't just talk about culture. He lived it for decades. He actually reframed failure as learning, not as a slogan, but as an actual practice. People shared failure stories publicly and were thanked for it.
Josh LevineSo he was the leader, then the executive of WD-40 through its major growth years. And what I appreciate about his approach is one, he took the long view. He really believed, and we've talked about this, that culture takes time. It doesn't just happen instantly. He also made a very big effort, per our conversation around innovation, to reframe failure as learning. It was one of those things, as a chief executive, you just kind of have a thing that you care about. And for him, one of those big things was reframing failure as learning. And so he would do these sort of learning, exposed learning stories, and he would have people talk about their failures and make it okay. And he'd say, great, thank you. Because the essence of how they got to WD-40 is that WD-1 through 39 didn't work.
Al ElliottRight.
Josh LevineSo that's the story between— that's WD-40, and that is the essence. That is the history. That is the authenticity of the organization. And that to me is such an incredible proof case study in understanding that power. The other really, really important thing, and this is a trend that I've seen across Many great culture-led organizations. There was a leadership philosophy that he espoused and his leaders espoused, which is that it was their job to help their employees step into being the best of themselves, their best self. And You could imagine Semeng saying, no, our job is to make a great product that people will sell and people will buy, that will sell and people will buy. But what he understood is by investing and framing in that, that you're flipping the kind of traditional org chart from top down to bottom up, and you see yourselves as supporting The branches of the tree. And what you get isn't immediate success, but you get earned long-term trust and loyalty. Because I'm not just asking you for your fingers or your arms or your brains. I'm investing in you. I'm asking, I want, I care about you as a person.
Leanne ElliottYeah.
Josh LevineAnd so you not, you don't just get a paycheck. Of course you do. And you get satisfaction from doing a job well done and seeing your, your work, you know, have an impact on the world. But you also get something, a competitive advantage that, that no, no other business is gonna give you, which is an investment in you as a human. I care about you. And so you better believe When another organization comes along and says, Al, I've got a new position. I'm going to double your salary. You're going to think long and hard before you take that because Gary and his team have provided you with much more than the, than the cash that you get at the end of every 2 weeks. You want to empower those people because we're no longer in the machine age where I'm asking you just to do the thing that I want you to do. I want you to do the, the, the thing that you think is gonna make the biggest difference to get us there. And that is what's gonna help us move at the speed of the market. And Gary was a forefather of this thinking, which is, I'm investing in you as a human. I'm gonna lift you up. I believe in you. Here is what our group, our team, our company's trying to achieve. How do you think we should do it best? What do you think we're trying, we should do? And by reversing that and empowering those people, then, then we're going to see the kinds of gains and benefits that are going to not just keep up, but lead the market. That's how you create long-term value. That's how you create an organization. That can make a difference, create value in a way that no one's created value before, and become a market leader.
Leanne ElliottIf you are a business leader sitting at 35 employees staring at growth, here is your key takeaway. Start making the implicit explicit now. Don't wait for the crisis at 250. Define your 3 to 5 critical decisions. Build recognition around those behaviours, and accept that your founder's culture will need to evolve into something bigger than you. Because as Josh says, culture is a long-term investment. The returns are enormous, but they're not immediate. Remember, culture eats strategy for breakfast, but only if you feed it properly.
Al ElliottYou can find Josh's book, Great Mondays, and his tools at the domain greatmondays.com. I asked Josh who should be reading his book, and perhaps who shouldn't. So tell us, what does your book cover? Who should be reading it?
Josh LevineSo Great Mondays is a book I wrote 5 or 6 years ago in order to help advance the conversation around company culture. And we started with the definition. And what I realized is that there were a lot, a lot of definitions out there in the world around what culture is, because as I said, culture is Something that we can be proactively, and I'll use this term, designing to actually change and improve how we do our work. And so in the book, it is organized into the 6 components of culture: purpose, values, and behaviors; recognition, rituals, and cues. And it's for anyone who wants to understand how to influence, change, or lead their culture. In an organization, right? I work with a lot of hypergrowth technology companies in the Bay Area and beyond, but these principles are universal enough that even if you are running a small creative group, if you are a manager of 12 people, even if you are an individual, you understand, you start to learn and see what the ways. That the kind of the tools that you need to be able to influence how people engage with you and your work.
Al ElliottI'm sure people want to know a bit more about you. Great Mondays Radio, Great Mondays book. Where's the best place for them to go?
Josh Levinegreatmondays.com is where you can find everything. I have links to all of that as well as the Great Mondays classroom. Where you can find free tools from the book, as well as explanations about how to craft exercises to define your purpose, values, and behaviors, recognition rituals and cues. And please find me on LinkedIn. That's where I, that's where I kind of spend most of my time online. And I would love to, love to see you. If you heard me on the program, just let me know. Look for Josh Levine with a little lightning bolt, and you— we can, we can connect.
Al ElliottThis is Truth, Lies and Work. We'll see you next week.