According to the U.S. Small Business Administration, "Businesses with less than five employees make up 62% of all businesses." At the same time, data from The Kauffman Index found that, in 2014, an average of more than 500,000 adults started businesses each month.

The result? The number of small businesses is growing quickly — and with that growth comes competition.

Standing out as a startup — and maintaining that competitive advantage — can be difficult in an environment that’s packed with competitors (and facing new entries every day). Unsurprisingly, in its analysis of 101 failed startups, CB Insights found that, of the top 20 reasons startups fail, the majority — a lack of capital, being outcompeted and poor market timing — had to do with the mishandling of growth.

Though these issues may seem unrelated, nearly all of them share a common solution: building a culture of growth from day one.

What is a Culture of Growth?

Before you can build a culture of growth at your company, you have to know what such a thing looks like in practice. Barbara Osterman, writing for the Manzella Report, defines this culture in terms of an organization’s mindset:

A growth mindset finds us focused on developing our limitless potential. With a growth mindset, we welcome setbacks and challenges as fodder to develop, learn, and grow. This leads to a passion for discovering, experimenting, and stretching ourselves to be all we can be.

Osterman contrasts this against a fixed mindset — one that requires participants to defend their knowledge and prove themselves constantly, in order to avoid appearing incompetent.

Extrapolated out, her definition naturally leads to five conclusions that can be put into practice in service of building a company culture of growth:

How to Create a Growth Culture

Implementing each of Osterman’s five practices from the ground up will contribute to a culture that supports future company growth and deftly avoids falling victim to many common weaknesses.

1. Prioritize Learning Over Talent

This isn’t to say that talent isn’t important. Bringing employees with diverse skillsets into your organization is critical to offering your customers the best possible products and services.

Where talent fails, however, is when it’s used as a crutch. Employees who aren’t pushed to learn — even when they’re starting from a talented baseline often become too comfortable with their status quo. Consequently, they miss opportunities for both personal growth and supporting the company’s growth.

Build a culture of learning first. You may be surprised to find that a culture of growth follows.

2. Challenge Assumptions

The saying, "That’s the way we’ve always done things!" is the ultimate killer of growth. Every employee and executive is fallible and their assumptions need to be treated as such.

Stephen Millard of Notion Capital shares a series of questions he recommends revisiting every now and then to ensure internal assumptions aren’t being overlooked:

Add to this list with any further questions relevant to your company’s products, services, aims or goals. Then, make regular conversations surrounding these questions a part of your ongoing calendar.

3. Engage Every Internal Resource

Ian Altman, writing for Forbes, argues that building a culture that spurs growth involves embracing the contributions of workers at every level:

In many companies, executives in certain departments seek to evade culture initiatives. The finance department and human resources departments can be instrumental in delivering culture across an organization.

Going one step further, it isn’t just executives, finance professionals and HR reps who should be involved in creating a growth environment. While these positions may drive specific growth programs, workers in every department should be engaged to provide feedback and suggestions.

Your customer service reps, for instance, are on the front line of client interactions. They will likely have thoughtful recommendations on future features or line expansions to help you better serve your target audience.

Engaging employees in this way doesn’t just benefit your company’s future growth. Feeling that their contributions are valued makes employees feel worthwhile, improving on-the-job morale and reducing costly burnout and turnover down the road.

4. Forego Blame

Mistakes happen. Every company faces challenges and every worker knows how bad it feels to take the blame for these screw-ups.

But when you allow blame to fester, you remove the incentive for employees to report issues they encounter that could be causing you to lose customers. You also block the way for the sharing of innovative, out-of-the-box ideas that could fuel future growth. Blame hamstrings your employees from being able to contribute to your business’s success.

This isn’t to say that you shouldn’t dole out discipline when appropriate. But if your employees seem hesitant to participate in the growth culture you’re trying to build, consider that their reticence could be coming from the desire to avoid blame — not a lack of ideas.

5. Allow Space for Experimentation

Finally, if you want to prioritize growth within your culture, you have to allow time for it to flourish. Many of today’s startup "unicorns" have reached their size and status through unorthodox, unexpected means. Take Airbnb, for example, and its leveraging of Craigslist's code to quickly tap into a larger market.

The kind of ingenuity that characterizes these giants’ rise to power can’t be accessed when employees are buried under mountains of work or feeling burned out. They need both space and stimuli to come up with the creative ideas that can power future growth.

You don’t need to go as far as instituting a Google-style "20% time" policy, but you do need to free up space for that kind of experimentation for your growth culture to be successful.

Growth Cultures Aren’t Built Overnight

If you’re a new startup, integrating these practices into your company’s ethos from the start — as well as revisiting them periodically to ensure you haven’t strayed from the path — gives your fledgling business the best odds possible of success.

If you’re an established company, you’ll need to look carefully at how your current practices either promote or prohibit the creative thinking and experimentation needed to drive sustainable growth. This can lead to some high fives and/or uncomfortable realizations that will help get you past future hurdles.

It won’t be easy, but the results of committing to building a culture of growth will be worth it.

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