Every company faces both periods of growth and setbacks and the company’s culture will evolve as a result of these changes. Often, in some unexpected ways.

Growth is exciting, especially for many startup veterans who are conditioned to expect (and enjoy) changes and the challenges it brings. In periods of growth, we might expect that that our team’s enthusiasm will mirror the positive trend of the company’s trajectory. It’s a cause for celebration, after all!

But consider all of the stressors that come along with growth: ever-changing roles and responsibilities, new reporting structures, a new direction for the company, office relocations, new leadership, and so on. Any of these things on its own would be a hurdle, let alone when multiple factors that are at play at the same time.

Growth can introduce unexpected tension and additional set of obstacles for management, who must help lead the organization through growth as well as for helping individuals adjust and adapt their own identities within the team.

Therefore, it’s critical to maintain open lines of communication between leadership and team members.Not everyone has an appetite for change or the experience and coping skills to manage change on their own and failing to help the team adapt can have negative consequences like employee attrition, lost productivity and a loss of cohesion between team members.

Growth can go one of two ways for a company’s culture. It can cement the current culture because as the team gets larger, it becomes increasingly difficult to change. Or, it can act as a catalyst for the culture to quickly change.

This is what we call “a changing of the guard” in startups. As a company reaches its first major period of growth and new hires come onboard, original team members may find themselves questioning their place in the new organization and may leave as a result of the company’s evolution. A mass exodus could happens when the veteran team members don’t believe in the new direction or they’re concerned that their roles haven’t been positively impacted by the company’s evolution.

Conversely, when your team experiences a setback like losing a major client, going through a round of layoffs or enduring the wrong leadership hire, your culture will also evolve, for better or for worse. Surprisingly, these types of setbacks yield a significant opportunity for your company’s culture: whether or not to perceive change as something to fear or whether to see it as an inevitable challenge to overcome together.

A setback is a chance for leaders to shore up a team’s resiliency, commitment to the mission and adaptability under pressure. These are not facets of a company’s culture that can be defined during times of stasis, because they’re grounded in the emotion of real change, and aren’t truly replicable no matter how many trust falls exercises that your team practices. While you’re tackling the major setback in the foreground and its more obvious repercussions, your culture is being defined in background.

Culture is not a result of policy or procedures or whether your team has happy hour at four o’clock on Fridays, but instead it is how leadership guides the team during seasons of change. Transparency, communication and trust are what shape culture during growth and setbacks. By paying attention to these things and bringing them to the forefront during periods of transition, you’ll be able to make a stronger and long-lasting impact on your team’s culture.

Looking to join the company culture at PandaDoc? We’re hiring! Check out our open positions here.