When Growth Kills Culture: Lessons from Richard Branson

Richard Branson's experience with Virgin Records is a fascinating story of passion, business, and cultural identity. Branson founded Virgin Records in 1972, turning it into one of the most iconic music labels in the world. The label signed legendary artists like the Sex Pistols, Culture Club, and Phil Collins, reflecting its rebellious and innovative spirit.

In 1992, Branson sold Virgin Records to Thorn EMI for £510 million. The decision was largely financial, as Virgin Atlantic was under significant pressure, and the sale provided the capital to keep the airline afloat. However, selling the label was a deeply emotional experience for Branson. It’s famously reported that he cried after signing the deal, as Virgin Records was his first major entrepreneurial venture and an integral part of the Virgin brand's identity.

Over time, Branson expressed dissatisfaction with how Virgin Records evolved under its new ownership. He felt the label had lost the creativity and independence that once set it apart. Reports from the mid-2000s suggested that Branson considered buying back Virgin Records to restore its original ethos and re-align it with his vision, though this never came to fruition.

The story underscores a key lesson in business: the importance of preserving the cultural and emotional essence of a brand, even as it grows or changes hands. For Branson, Virgin Records was more than a business—it was a reflection of his values and passion. When that was lost, it highlighted the challenges of balancing growth, financial decisions, and staying true to a company's roots.

So, what does this mean for MSPs?

In the MSP world, we see the same story play out. Owners build businesses with deep client relationships and close-knit teams. Clients love the personal touch. Employees love the sense of family. But when a larger player comes in, everything changes.

• For employees, the culture shifts from personal to corporate. Teams who once knew each other’s names are now lost in sprawling hierarchies. Morale drops, and turnover spikes.
• For clients, the tailored, people-first service that made the MSP special is replaced by standardised processes. Relationships are replaced by ticket numbers.
• For the original owners, the business they poured their heart into no longer feels like theirs. It’s no surprise so many walk away soon after a sale.
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Acquisitions aren’t inherently bad. Growth is good, and the MSP market is thriving. But the way it’s done matters. If culture isn’t preserved, you risk losing everything that made the business successful in the first place.

What’s the Answer? How to Grow Without Losing Culture

Preserving culture during growth or acquisitions is challenging but not impossible. Here are three steps to ensure your MSP keeps its identity intact:

1. Define Your Core Values – and Live Them Every Day 🛡️
   Culture starts with values. Make sure your core beliefs are clearly defined and shared across your team. These values should guide decision-making, from hiring to client interactions. Importantly, leaders must lead by example. If employees and clients see your values in action, they’ll trust that your culture remains intact.

2. Prioritise People, Not Just Processes 🤝
   Growth often leads to standardisation and efficiency drives, which can unintentionally erode the personal touch. Take time to listen to your team and clients during periods of change. Create space for honest feedback and act on it. When people feel heard, they’re more likely to embrace the journey with you.

3. Hire for Cultural Fit, Not Just Skills 🧩
   Every hire has the potential to either strengthen or dilute your culture. Focus on candidates who align with your values and understand your vision, especially during acquisitions or rapid growth. This ensures your team feels cohesive, even as you expand.

By taking these steps, MSPs can grow without losing the heart of what makes them unique. Growth should strengthen culture, not compromise it.

At Humnize, we see this all the time when MSPs come to us for help. Our recruitment process isn’t just about finding the right skills—it’s about finding people who will protect and strengthen the culture that makes your MSP unique. Because whether you’re growing, acquiring, or preparing to sell, keeping that culture alive is what sets you apart.

Let’s talk about how we can help you build a team that strengthens your culture and keeps your MSP thriving.