Kath O’Rourke, HR Consultant at TideHR, sat down with Cultiv8tiv‘s CEO, James Leavesley, to share her experience from working with founder-led businesses. Some key themes emerged, which could be valuable lessons for founders and owner-managed businesses, especially if you are looking to scale.
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Founder influence vs. practical reality
You work closely with founders and senior leaders – how do you see a founder’s personal style shaping culture in the early stages of a business?
It has a massive influence on the culture. There’s energy, there’s purpose, and people feel connected to something and can see how they contribute to the business. It’s usually what makes early-stage businesses feel like brilliant places to work. In a more practical sense, the way the founder communicates, how they handle a difficult situation, whether they say thank you, whether they let things slide – the team watches all of it and that influences how they work (some for the good, some for the bad).
When does that become limiting rather than helpful?
When the business grows beyond the point where the founder can be in every room. If culture only lives in one person’s head, it can’t be scaled. I see this a lot – a business goes from ten people to thirty people and suddenly things start to feel inconsistent. Some teams feel great, others don’t, and no one can quite put their finger on why. The reason is usually that the founder’s influence has thinned out and there’s nothing formal holding it together. This is where I come in and help them put a bit of structure and thought around how and why they do things.
What’s the first sign that culture is becoming inconsistent across the business?
Usually when you start hearing different versions of the same story depending on who you talk to. One team thinks the expectation is X, another team is doing Y. Or you get new managers who’ve joined from elsewhere and are just doing it their own way because nobody’s told them what “the way” actually is here. This eventually affects how people treat each other and how decisions get made, and that has a real impact on how productive and high performing a business can be.
How do you make something that feels personal more consistent and measurable?
You have to make it visible and part of the day to day. What does the founder actually value? What behaviours do they want to celebrate? How do we live the values? You take them and you write them down. Then you test them with staff and get a sense of whether people across the business actually experience those things, or whether it’s just aspirational. That’s where something like a staff survey is really useful, as it quickly tells you what’s working versus what you think is working. Once you have that data, you can look at how it feeds into other areas of the organisation, eg performance.
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From “we’re doing fine” to needing structure
Many of the businesses you support are growing quickly – what typically happens that makes a founder realise they need to be more intentional about culture?
Usually something has gone wrong. e.g. a good person leaves, someone complains about pay, or colleagues have fallen out. A founder suddenly realises they’re spending half their time firefighting people stuff and not running the business. A lot of these issues could have been resolved earlier before it got to this point. I try and encourage founders to be more proactive about this as it’s always cheaper and easier to get ahead of it.
Is it usually triggered by people issues, growth, or risk?
It can be all three. Maybe someone hands in their notice unexpectedly, or there’s a complaint. Or they’re taking on new people and realising they’ve got nothing in place to onboard them properly and it’s taking them ages, resulting in new people not knowing what they’re doing or what’s expected of them. I think most companies will only look at risk when it’s laid out to them really clearly what the business impact is, and they get to a point when they really have to!
What problems show up when there’s no clear structure behind culture?
Inconsistencies amongst people and processes. Staff become unhappy and often burnt out. Some managers are brilliant, some are making it up as they go along. Some people know what’s expected of them, others don’t. And when things go wrong (a performance issue, a grievance) there’s nothing to fall back on. No framework, no process, just the founder trying to handle it case by case. That can be really tiring and stressful to navigate.
How do you help leaders move from reactive fixes to a more proactive approach?
I try to show them that the reactive stuff is the more time consuming and expensive stuff. Every time you handle a problem without a proper process, you’re spending time and energy you don’t need to. We build simple systems that mean the next time something comes up, there’s a way of dealing with it. And we start gathering actual data, so they’re not just going on gut feeling about how people are doing. They’ve gathered feedback from their staff so they have a good idea about how people are feeling, what they should continue doing and what they should change. My role is also to be a good sounding board to the founder, so they have someone they can call to run something past and not feel like they’re doing it all on their own.
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The danger of informal culture
SMEs often pride themselves on having a “natural” or informal culture — where can that start to break down?
Informal culture relies on everyone just getting it and pulling in the same direction. That might work when you’ve got eight people who’ve been there from the start. If you add twenty more people it falls apart quickly. People are all different and have different motivations and roles. It’s also not clear to candidates when you’re hiring so you might not attract the right people. Having a more intentional and deliberate culture is a good way to showcase what you’re all about and attract and keep good people. It’s also good for clients and future investors.
What are the hidden risks of keeping things too informal?
Inconsistency in how people are treated can be one thing, which creates resentment. If you ever end up in a situation where you need to address underperformance or a complaint formally, having no structure makes that really difficult.
How does that impact retention or engagement over time?
People want to know where they stand. They want to know they’ll be treated fairly and that there’s some consistency. Informal cultures can feel exciting and close-knit early on, but as people settle in and start thinking about their future, they’ll start to ask themselves: are they developing? Are they being rewarded fairly? Is there a path forward? The absence of structure starts to feel like a lack of care and that’s when you can lose people.
What’s the simplest way to introduce structure without losing authenticity?
It doesn’t have to be rocket science. Introduce processes that are simple to use so people aren’t put off by them – your job is to make people’s lives easier rather than harder. Most people want to have opportunities for feedback and development, so you could introduce a light touch appraisal process, encourage regular 1:1s and coach managers on the sort of conversations they could be having to bring the best out of people.
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Making culture observable and practical
Your approach is very practical — how do you help businesses turn culture into something people can actually see and do day to day?
I ask a lot of “so what does that actually look like?” questions. A business might say their value is “integrity” – that’s fine, but what does that mean in practice? It needs to be specific enough that someone knows how it relates to them and their job. My job is to help translate the nice words into real behaviours that people can actually use day to day.
What makes a behaviour clear and usable versus vague?
If you can’t test whether someone’s doing it or not, it’s too vague. “Be kind” is too vague. You need to relate it to their role, what they do, and how they contribute towards the company goals. You can measure it in performance appraisals and team meetings. You can have value awards where someone demonstrates the value and it’s celebrated. This will help develop a sense of purpose and engagement.
How do you embed this without overcomplicating things?
You can involve the team – people are much more likely to actually live something if they helped shape it. Ask the team for their feedback and go from there.
What’s a quick win that creates visible change?
Changing how you run a meeting, or how feedback is given – something people experience regularly. If managers start having proper monthly one-to-ones with their team, that’s immediately noticeable. The impact on how people feel can be really quick.
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Linking culture to business outcomes
You talk about engagement and retention — how do you connect culture directly to those outcomes in a way founders understand?
I usually start with the cost, for example how much it costs to replace someone. Recruitment fees, lost productivity, the time it takes to get someone up to speed – for most roles it’s somewhere between £5,000 and £20,000 or more. If you’re losing two or three people a year who could have been retained with a bit more attention to culture and engagement, that’s a commercial risk and causing unnecessary costs to your business.
What are the early indicators that culture is impacting performance?
There are a lot of factors – small conflicts start taking longer to resolve, people withdraw and stop volunteering ideas, people complaining, staff sickness goes up. These things are easy to dismiss individually, but they’re usually signals worth paying attention to.
What data or signals do you look for first?
Staff turnover rate, absence data, number of complaints, and how long it takes to fill roles – because difficulty hiring is often a sign your employer reputation isn’t quite right. And then I’d want to hear directly from people, either through a proper staff survey or some structured conversations, because the numbers alone won’t tell you why.
How do you demonstrate ROI without overloading leaders with metrics?
I would always suggest agreeing a small number of clear measures upfront so we can track genuine progress and demonstrate the impact of the work over time. The goal is not HR metrics for their own sake; it is making sure the people-foundations are directly supporting the business.
I pick a few people metrics and a few commercial and leadership impact metrics to show deliverables and impact. For example, people metrics could be ‘Improvement in engagement scores from a repeat staff survey at 6 and 12 months’ and ‘Reduction in staff turnover and the recruitment costs that come with it’. For commercial metrics it could be ‘Founder time freed from people firefighting, measured by your own culture assessment quarterly, so you can focus on revenue-generating activity’ and ‘Progress toward a leadership team that can operate autonomously, reducing reliance on you being across everything.’
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Simple systems vs. over-engineering
You emphasise simple, workable HR systems — how do you strike the balance between structure and keeping things lean?
I always start by asking what problem we’re actually trying to solve. Not “what policy do we need?” but “what’s going wrong, and what would make it better?” The best HR systems are the ones people actually use and make employees and managers lives easier.
What’s the risk of over-engineering culture or HR processes?
It makes HR look like it’s just about compliance and paperwork, not about people. It has to be meaningful and add value. The aim is to make things simple and accessible for people to use, and that will make a difference to the day to day in terms of efficiency etc.
What are the “must-have” basics every growing business needs?
- Clear expectations for every role, e.g. what does good look like
- A way of having regular conversations about performance that isn’t just the annual review.
- A fair and consistent way of dealing with problems when they come up.
- And some sense of what you offer as an employer beyond just the salary, because that’s what attracts and keeps good people.
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Culture through growth and change
When businesses are scaling or going through change, what tends to happen to culture if it’s not actively managed?
The culture usually starts to drift. The things that made the business great at ten people (the pace, the closeness, the shared sense of mission) start to feel diluted. And if you’re bringing in new people quickly, you’re also bringing in different assumptions and habits. Without something to refer to, different teams start developing their own mini-cultures, and before long you’ve got a fragmented and siloed organisation.
Where do you see misalignment show up first?
In how managers behave. The founding team will often live and breathe the culture, but middle managers who’ve joined later may not really understand it, and they’re the ones shaping the day-to-day experience for most of the team.
How can leaders use data or feedback to stay ahead of that?
Check in regularly and actually listen to what people are saying. A staff survey is brilliant for this because it gives you objective data and feedback from everyone, not just the loudest voices. You can track it over time and see whether things are improving or drifting, and it makes any future plans more targeted.
What’s your advice for maintaining consistency across new hires or teams?
Invest in your onboarding – in terms of time and process. Make it really clear what you value here and how you do things – not just what you do. You need to spell out what the unwritten rules are that are really important. If you get that right, new people will come in already set up to succeed, rather than trying to figure it out over six months.
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Spotting blind spots early
In your experience, where do founders most commonly have blind spots when it comes to their culture?
They think everyone feels the same way they do about their business. The reality is, they probably don’t. So there’s often quite a big gap between what the founder thinks the culture is, what motivates people, and what it actually feels like to work there.
What assumptions do leaders often get wrong?
Same as above!
How do you surface those issues in a constructive way?
I usually try and encourage conversations to get feedback and to understand what’s working well and what can be improved. An anonymous staff survey is a good way to get feedback too. People will usually say things anonymously that they’d never say face-to-face, and it give you honest data without putting individuals in an awkward position. I then help leaders interpret what’s come back in a way that’s about moving forward and celebrating what we do well and where there are opportunities.
Can you share an example where addressing a blind spot changed outcomes?
I worked with a founder who was brilliant with clients and had a real passion for the business. But the feedback from the team (through a staff survey) showed that people didn’t feel informed, that decisions seemed to come out of nowhere, and that there wasn’t much sense of direction day-to-day. The founder was really upset because they really cared. But once we had that feedback, we could do something about it. We introduced a simple monthly update, made the business goals more visible, and built in more two-way communication. Within a few months, engagement had improved.
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Balancing intuition with evidence
You work in very real-world environments — how should founders balance instinct with actual data when it comes to people and culture decisions?
Instinct is valuable when you know your business well, but sometimes it can reflect your own experience and the people closest to you. Listening to staff feedback and using data to support decision making helps to fill in the gaps.
What’s the simplest way to start introducing data into decision-making?
Track something. Turnover rate, absence, how long it takes to fill a role. Even just knowing your numbers is a step forward from most SMEs I come across. Then add in some regular, structured feedback from your team. It doesn’t have to be complicated. If you run a staff survey, you can also use some data and do a ‘you said, we did’ feedback session with staff so they can see how their feedback is leading to improvements.
How do you build confidence in using evidence without overwhelming the business?
I’d start small and make it useful. If the first piece of data you gather actually helps you make a better decision, people start to trust it. If you gather loads of data and nothing changes, people write it off as pointless. So pick one or two things to focus on, act on what you find, and show the team that their input made a difference.
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A practical first step
If a founder reading this wanted to strengthen their culture without adding complexity, what’s the first practical step you’d recommend?
Find out what’s actually going on. Not what you think is going on – what people actually experience. Have some honest conversations, or do an anonymous staff survey. Once you’ve seen the feedback, the next steps become much clearer.
What should they avoid doing first?
Writing values without knowing what people think. If you start by designing a nice set of values before you understand if that’s the reality, people won’t live the values, and you won’t impact the culture. Establish the reality first, then decide what you want to be and how you’re going to live them.
How quickly can they expect to see an impact?
Some things move quickly. Even opening up a conversation with staff and asking for feedback gives them a good impression of the business and shows you care. If you can start having better conversations with your team, people notice within weeks. Structural things take longer – building trust, shifting engagement, reducing turnover – you’re probably looking at six months to really see it move. But the impact should be visible quite early if you’re doing the right things.
What separates businesses that follow through from those that don’t?
Businesses that listen to their staff and act on feedback create high performing and engaged teams. This has huge commercial benefits and you’ll see the impact to customers and clients too. Organisations that are honest with themselves about where they are, and able to reflect on the good and the bad, will do much better in the long run.
It’s worth mentioning that when evaluating startups and scaling businesses, investors also really look at staff engagement and company culture. During due diligence, they view these factors as direct predictors of execution capability, future growth, and underlying financial risk. Therefore, it’s essential that companies view this as a priority and not a nice to have.