Even though Silicon Valley fetishizes rapid growth and “unicorns”, it’s well-understood that rapid headcount growth is bad for company culture. The firm gets big, “politics” start happening, and the company becomes a less interesting place to work, or so the complaint goes. I’m not fully bought in to this analysis, because politics is always there; the question is whether it interferes with getting work done or with a person’s life outside of work. Still, I’ve seen it happen first-hand that rapid headcount growth damage a company’s culture. The conventional explanation for this is that new people are brought in and not properly acculturated. Having seen this dynamic play out multiple times, that’s not how it actually works.
The newcomers, for the most part, aren’t to blame. Most new employees are going to come into an organization near the bottom and, therefore, not have much influence over the corporate culture in any case. Even when there are more of “them” than there are old hands, the threat posed by new hires en masse is pretty much nonexistent. Of course, sometimes a company will hire externally for an executive position, and that new executive hurts the culture. That’s not necessarily a growth problem, though. Hiring a rotten executive will hurt the company, regardless of whether its headcount is growing quickly, slowly, or not at all. That’s a different problem.
So if rapid headcount growth hurts the company culture, but the newcomers are not to blame, then what exactly happens? In general, when a company hires over-quickly and loses its culture, it’s the fault of the people who are already there. This style of hiring is typically done to build a bottom. The workers are burning out, and management sees this, and the shared solution is to promise the worn-out workers that they’ll have a bunch of people under them within a year. Concern with sustainable practices, business focus, work/life integration, and technical solvency (as opposed to “technical debt”, whose interest rate is usurious and unpredictable) can go out the window, because “you’re/we’re all going to be VPs and Directors by next Christmas!” I was once in a conversation where a programmer was directed not to automate certain reliability-oriented tasks because, as his manager argued, “We can always hire a state-school grad to carry a pager.” I don’t know if I’m more offended by the snobbery or amused by the incorrectness of it. In what world do competent people allow themselves to be poorly managed solely because they didn’t go to “the right schools”. Only an idiot would presume that another person’s reasoning might be, “This place is a shitshow, but I’m an Ohio State graduate so this is my lot in life.”
Hiring one’s way out of problems doesn’t work for very long, if ever. Recruiting is hard, and recruiting good people is extremely difficult. I grapple with abstruse programming languages, advanced linear algebra, and complicated production systems on a daily basis. Recruiting, especially under limited resources, is harder. When business circumstances and the press are favorable, there’s a palpable “talent pressure” that leads a company to believe in an inexhaustible pool of potential workers. Inexhaustible, it ain’t. For all the negative things that are said about large corporations and investment banks, such companies often treat their best people quite well, knowing just how difficult and expensive it is to find talent. Only hubristic, inexperienced companies can convince themselves that a limitless pool exists.
VC-funded startups often lose their cultures not by intention but through negligence as they grow. The cultural decline is blamed on regression to the mean as the company is forced to compromise and hire people “not like us”. That story, while favorable to the originators, is completely false. Culture is de-prioritized by the founders and investors, who demand rapid and unsustainable growth or they will lose interest. For example, Y Combinator– an institution that is bad for the world in more ways than I have time or space to get into– demands 5 percent growth per week, and writes off a company that doesn’t achieve this target. A company that started with 5 people and grew at this rate would have 63 people after one year, 800 after two years, and over 10,000 after three years. That’s an absurd demand! To throw an idea out, simply because it is not on track to build a 10,000-person company inside of 36 months, is ludicrous. Many important problems don’t require 10,000-person companies (or even 100-person companies) to solve them. As founders struggle to meet this unreasonable growth demands, cultural integrity can’t be afforded. Worse yet, the unreasonable expectations of the investor community create an adverse selection in the moral quality of founders; or, to put it more bluntly, the system rewards those most willing to make dishonest promises.
I’ve written about technology’s being a resource-extraction culture, surprisingly similar to what you’d expect in an oil-rich Middle Eastern country. When a company’s getting good press and raising money easily, it’s in a similar “bonanza” mode. No thought is given to the future, under a shared belief that the company will either have failed or made everyone rich (with some variation in how “rich” is defined) within a few years. And the perception that there will always be more eager grunts allows a company to create a culture of professional hazing and overall disregard for those at the bottom. This is a common pattern and, yes, it kills the culture. When managers no longer see mounting grunt work as a problem that requires automation or complexity-cutting, because they can just triple headcount and give “team lead” positions to those who’ve suffered the most, it’s a really bad transition. But don’t blame the newcomers for “killing the culture”. When this decline occurs, the new people usually have nothing to do with it.
