Founded independently in London in 1989, XL, which originally made its name with releases for ravers and techno fans, has become one of the world’s leading labels, on the strength of a roster with no apparent allegiances to genre or even commercial potential. In fact, if there’s something most XL artists–Vampire Weekend, The xx, M.I.A, Thom Yorke, and others–share, it’s a resolute insistence on individuality. That, plus awards and critical accolades. (Adele, in addition to selling as many as 11 million albums worldwide, won two Grammys in 2009, and The xx claimed Britain’s Mercury Prize.) The stable should only grow in 2012. While label heads are cautious about growth and choosy about their product–they average about one signing and a half dozen albums a year–the label opened an outpost in L.A.’s Silverlake neighborhood in April, and in 2012 they plan to build a studio there, as well as one in New York, where they have their main U.S. office.

“Everything fundamentally starts with the artist,” explains Kris Chen, who, as the head of XL’s American operations, signed Tyler, Vampire Weekend, Sigur Ros, and the punky New Jersey band Titus Andronicus. (XL owner Richard Russell, one of the label’s founders and a musician in his own right, oversees the business from London.)

Chen’s modest, cluttered work surroundings is further proof that most of his time is spent outside of the HQ and his focus is on the bands (major label headquarters are typically precious and luxe, as if the executives are the rock stars. When XL builds their L.A. studio, it will be in the garage of the house they’re using for an office.). “We have hundreds of potential artists and potential albums pass by us in a given month,” Chen says. “Most of them we turn down. You have to start with finding those artists that are capable of being different, that are different.”

One of the hardest things for record labels to do is understand that they can be a drag.

As Adam Farrell, who heads marketing in the U.S. and works closely with Chen, says, “My favorite artists are the ones that come to us fully formed. When you have a band like Vampire Weekend, I can’t sit here and be like, well, they were a diamond in the rough, and we chiseled them out. They were doing everything long before we even got involved. For, like, eight or nine months they had their aesthetic, what they were doing very much down.”

XL has cultivated an institutional lead-from-behind approach, patiently searching out artists with a niche, and then marshaling the label’s resources to help the artists find a wider audience. XL has, in a sense, recast artistic freedom as a business model. Tyler, the Creator’s clip for “Yonkers,” which seems to show him eating a cockroach, vomiting, and hanging himself, and which won a VMA for Video of the Year, was produced entirely by the rapper himself. XL just paid for it.

Chen, who reveres certain eras in major-label history–Sire, between the signing of the Talking Heads and the Smiths; Elektra in the early ’90s, when Dante Ross filled out their rap roster–today sees the majors doing something very different: “They are good at taking a formless, no-identity artist and, through a great team of co-songwriters and stylists and A&R hit-makers, they’re able to mold them into a sellable, eye-opening product.” And while he’s careful not to dismiss that approach (“We all love a little catchy pop song”), he says that “one of the hardest things for record labels to do is understand that they can be a drag.” XL’s agility is in part structural: They fall under the umbrella of the Beggars Group, sharing sales, publicity, and distribution teams with three other important labels (Matador, Rough Trade, and 4AD). And according to Farrell, they “relish staying small.” He says that when one person left the label for another job, they decided to simply not fill the position.