A budding entrepreneur recently asked what I considered the biggest challenge when trying to control the look and feel of individual outlets while expanding from 1 location to more than 1000. I think he asked the wrong question

When we started out at Kinko’s, the color of each store was determined by what paint was on sale. Later, we “branded” the company and saved money through economies of scale, but “control” was not our objective. To manage a far-flung empire, decide which few things you MUST control and leave everything else to local coworkers and customers.

As the founder and senior partner, I could have dictated anything, but once you start doing that, you demoralize your workforce and end up having to dictate everything. You need people to make good decisions for themselves. You might be able to require white paint and blue counters, but can you dictate a passion for customer service? Your company culture will be determined, to a great extent, by the level of personal trust between you and your coworkers.

I think effective culture building can be summed up in three words: “frequent flyer miles.” I was ALWAYS in the stores, and so were my partners and their management teams. We were evangelists for the Kinko’s Culture, spreading praise and positive gossip. We roamed from store to store, telling coworkers what we liked about their branch and what cool things we had seen at other locations. We listened to coworkers, and then we pitched their ideas around the company. At the annual picnic, we worked around the clock, shaking hands and chatting with coworkers.

The most important things to remember during rapid growth are 1) stay “on” your business, 2) happy fingers ring happy cash registers, and 3) participation builds strong feelings of ownership.

To stay “on” rather than “in” your business, devote your time and energy to the environment and the culture rather than the machine contracts, operations challenges, etc. Honor the people closest to the customers by recognizing and rewarding their contributions. Encourage debate and discussion to keep coworkers engaged. We held frequent coworker meetings and regional conclaves to foster open communication. We held idea contests with lucrative prizes, and once a year we would send a winning store’s coworkers to Disneyland while we worked in their place. I constantly floated proposals to modify the Kinko’s Philosophy because it was important to me, and I wanted to make sure people were talking about it.

Management’s obsession with “control” may be the biggest challenge for a fast growing company. Great organizations require great expressions of trust. As an investor, I look for leaders who walk the walk and model the culture they want to create.