Between the initial excitement of launching a business and the stability of running an established company is a rocky and moody adolescence. For startups, "no matter how happily employees burned the midnight oil at the outset, there's an almost universal dip in morale a few years in," says Mark Roberge, a senior lecturer at Harvard Business School and author of The Sales Acceleration Formula. When employee-engagement firm TinyPulse combed through staffer-happiness surveys, it found that roughly 70 percent of startups hit a rough patch around year three or four--and companies with higher revenue-growth rates had deeper problems. But you can safeguard your team's esprit de corps without hurting your bottom line.
Build in transparency
When the team is 10 people crammed into one small room, there's no need to send out updates--everyone is enmeshed in what's going on. But when you have 250 employees spread over multiple locations? At that point, "you have to make a conscious plan to share as much information as possible--what your sales are, what the strategy is, why you're making certain decisions," says Roberge. The former chief revenue officer at HubSpot, he joined the marketing firm a year after its launch and watched it balloon to $100 million in annual revenue, with hundreds of employees and global offices. "We shared what came out of our monthly executive meetings with every frontline worker and published our monthly company financials," he says. "The more aggressive you are with growth, the more helpful it is to make ultra-transparency a priority."
Hire like you're a giant
"At some of the best companies I've studied, what's amazed me is that the CEO is still involved in hiring every person, despite the company's scale," says Roberge. Playing gatekeeper will keep B players from getting in the door (and hiring C players), but you also need a plan for what to do with all that A talent. "Codify onboarding earlier than you think you need to, so people feel like they're being integrated smartly," he says. If you don't, they often end up spinning their wheels and accomplishing little--a sure-fire recipe for dragging down morale.
Make data your friend
Remember when you could take the whole team out for lunch and get a feel for engagement and mood? As the company scales, you need to replace those gut checks with more formal tools. "There's a whole sector of new tech products that let you take quick pulses of employee happiness," says Roberge (TinyPulse, Talmetrix, and Culture Amp, to name a few). "And err toward weekly or monthly feedback. Annual surveys are basically pointless, given how quickly the team and the company are changing."
Make a fuss
At many large companies, says Roberge, employees' mindsets shift from "I'm really valuable" to "I'm a cog." So call out major wins often, with formal awards or casual staff emails. Forty percent of workers say they'd work harder if they were commended more often, according to a survey by employee-recognition firm OGO. During Roberge's tenure at HubSpot, six tiers stood between entry-level sales hires and senior roles. But each of those tiers came with plums, such as stock options or work-from-home privileges. "Social media has shaped our collective psyche," says Roberge. "Badges and rewards really work."
Hire Sheryl Sandberg
Or at least someone like her. "Early founders are remarkable visionaries who can turn a company's strategy left and right, but that doesn't usually translate well to setting up an operational structure for hundreds of people," says Roberge. In the past, that tension might have triggered a tug of war between the board and the founder over appointing a new CEO, but recently more founders are champing at the bit to bring on a COO. "As an angel investor, one of the items I assess--and one I know others are looking at today--is a founder's humility," Roberge adds. Hiring a head of operations doesn't diminish your leadership but instead "means you have a right-hand person to deal with the operational execution that's often at the root of morale issues."
Formalize roles and goals
Jacks-of-all-trades are crucial to getting startups off the ground. But with scale comes the need for expertise. That can spell disaster for the mood around the office if ground-floor
hires think they're getting passed over without consideration. So make sure people don't find out about that new position after you've made an outside hire, says Roberge. Instead, attach quantifiable skills and metrics to each role, so your current team can see
how they stack up--and how they can advance. When done well, he says, bringing on a senior specialist can even raise spirits, if the current team "sees the person as a potential mentor as much as a boss." In other words: less thumb to the nose and more leg up the ladder.