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8:00pm EDT April 25, 2010

Euan S. Thomson understands the opportunities that growth brings and, well, the challenges.

In eight years, the president and CEO grew Accuray Inc.’s employee base from 50 to 450 and the number of customers from five in the U.S. to 200 in 20 countries.

“As you grow, and as you grow that fast, it’s inevitable that you get cultural challenges,” Thomson says. “Managing a culture change as well as managing a company at each level that it happens to be at, I think, is probably the biggest challenge.”

Changes such as growth can mean needed adjustments to your company culture. Accuray reached a natural evolution of moving from technology-focused to customer-centric.

Getting those changes across to your employees means you, as the CEO, need to live the culture and communicate the culture. Explain the reason for the changes in a positive light and involve employees where possible.

The developer of the robotic radiosurgery CyberKnife System reached net revenue of $233.6 million in fiscal 2009.

Smart Business spoke with Thomson about how to deal with changes to the company culture.

Start at the top. Any culture has to start at the CEO. It has to be something engrained in them. Quite frankly, if that culture isn’t part of their personality, then they’re probably not the right person for the job.

It has to start with the character of the CEO. Then I think as the management team develops, as the management team comes together, you have to be able to choose and select people who also epitomize that culture and believe in that culture and get behind that culture.

Then it has to permeate its way through the organization and it has to be represented in all aspects of the business. Everything from customer relations to human resources to the way the company presents itself to investors and the outside world.

After awhile, you tend to find that when the culture becomes obvious that the right people are attracted toward the company. Employees who fit with that culture tend to want to join the company and they want to stay at the company. People who don’t fit well tend to leave. It tends to feed upon itself.

Communicate to permeate. The one thing that is important is consistency. Today, in particular, there are so many ways of communicating, and it’s impossible to generalize exactly what the formula for communication would be, but ... whatever form of communication you use, I think the key is consistency.

There’s also some positive reinforcement there that has to be done. You have to recognize when people recognize that culture and praise them for it.

Also if you see examples that are counter to the culture, you have to explain to people that’s not the way you want the company to be represented. Again, consistency and time are the most important aspects I think.

Manage changes. Really never get too entrenched in what is being set up. We have something we say to ourselves very often inside Accuray, which is, ‘Because it was right yesterday doesn’t mean it’s going to be right tomorrow.’

What we really want to get across is making a change doesn’t mean the decision we made yesterday or last year was incorrect. It just means it was right for where we were then, but it’s not right for where we are now.

Try to encourage people not to feel a need for change somehow implies a previous failure; that it’s just changing priorities and being open-minded to that change.

A lot of that (open-mindedness) comes from just generally open communication with people, making people feel comfortable with discussing things and discussing their challenges and finding solutions together. I think that’s a real key.

You can’t have a culture where people aren’t afraid to bring up the need for the change of moving priorities, and they must feel encouraged about identifying things that need doing and need changed in the organization.

Nobody should feel defensive about it. You have to encourage people to not get defensive if the need to change is brought up.

One of the keys to (embracing change) is not being critical during the change process, always focusing on the positive aspects of change: where it will lead you, what it will bring to you and the employees of the company if we make a change in a certain way.

Not criticizing where you’re coming from but being focused on where you’re going to so that people don’t feel the change process will naturally be accompanied by some form of criticism.

It has to be a very positive thing for everybody and you have to maintain a positive atmosphere around the change. I think in that way people naturally adapt.

Include employees. We were actually successful at selling and maintaining growth in an era when many companies failed. The way we did that, the way we maintained sales momentum was we brought many more people than just the salespeople into the sales environment.

We recognized that our customers were much more concerned; they had a level of fear, if you will, on spending large sums of money. Our equipment costs $3 million to $4 million.

We analyzed the situation, we recognized there was a need for it, and we brought people in. We brought in technical specialists who could explain the technology, we also reached out to our customers and we involved our customers as part of the team in talking to prospective customers.

It’s natural that, as a company grows, certain silos develop because when you’re a small company everybody tends to know what everybody else is doing and everybody tends to be somewhat involved in everything.

As you develop as a company it becomes natural that you move away from that model and people’s tasks and jobs become more specific.

In that process, there’s a risk that silos develop. Any CEO needs to be proactive in recognizing that and working hard at ensuring cross-company communication and teamwork.

It’s probably something all companies face and a problem in which CEOs have to face up to.

How to reach: Accuray Inc., (408) 716-4600 or www.accuray.com