This blog is dedicated to my incredible entrepreneurial clients. Many of these organizations are growing quickly and feel it is finally time to get their HR house in order. This is a key time to build that foundation of people, systems, and structures so that the founders can start focusing on the critical aspects – their highest and best use of time – of scaling their business.
Scaling is a very different phase from launch. Obviously, launching a company is hard. It takes a magical combination of smarts, and a collection of people who saw a need in the market, built a product/service, found customers, and figured out thousands of details. You brought people onto the team who could get done what needed to be accomplished. I have also seen companies that “bring the band back together” and recruit former colleagues to come in on the ground floor.
Going through these early launch/startup challenges instills a unique level of organizational chemistry and teambuilding. You all share a language and level of commitment that is impossible to sustain as you grow. You are often so connected that little quirks are not dealbreakers, and there is a level of trust and communication that is hard to replicate.
However, now that you are scaling, new people are brought into the team who do not share the history and/or the passion of the original group. This poses a dilemma for founders. How do you get what is in the founder’s head and heart – their essence – infused into the company in a sustainable way? Well, this is where HR can help! Here are some key tips to enable scaling.
Storytelling and amplifying founder impact
A key way to help the history and passion live on is through storytelling and having a strong internal communication and branding strategy. Infuse these examples and “why” into onboarding, company documents, HR systems, etc. This can be a time when everyone wants to spend more time with the founder, and they are pulled in too many directions. How do you leverage the founder and set up the organization for sustainable success? Figuring out how to amplify impact is key. There are many examples of organizations that have created a lasting legacy of the founder’s vision. Dan Gilbert, founder of Rocket Mortgage and a Detroit icon, is famous for his “isms,” for instance. It is important to name what you expect from people, to create stories around core values, etc. This will help new people understand how to grow and is a critical component of creating a growth-engine culture.
On the other hand, I have seen entrepreneurs ignore culture and behaviors and scoff at the “soft stuff.” This can have dire consequences if employees don’t have a north star to follow, especially if you have a variety of leadership styles or a lack of them.
Policies/HR handbook – Getting the balance right
Another key area to get right is having a handbook that translates the stories into policies and reinforces company values. Many companies hate the idea of a handbook and either don’t write one or use a template so full of “legalese” that no one can understand it. Don’t miss this key opportunity to use this necessary document to help align the organization. Another issue I often see is a handbook where a policy is created every time someone does something wrong. Yes, you need to provide clear direction and protect the organization, but you can do so in a way that is easy to read and reinforces your company's culture and values.
Performance alignment – Getting everyone rowing in the right direction
When startups consist of two to five people working together in a garage, incubator, or a coffee shop, huddled together, there is no question that everyone is focused on the right things – your survival depends on it! However, as companies grow, people work across the country and/or hybrid schedules, and jobs are segmented, it is much more difficult to ensure that everyone clearly knows what success looks like. This understanding starts with the job description, as well as understanding company metrics and strategy – what is keeping the leadership team up at night. Formal performance reviews are a necessity, along with annual and quarterly goals. It also includes creating an environment where feedback is welcome and sought. There are usually huge disconnects in this space, and fixing them will provide clarity for employees, tools for managers, and better results for the company.
Tame your “Frankensystems”
This is also a time to thoroughly review your processes and HR systems. Frankensystems exist throughout the company but are often felt most acutely in the people space. It is so easy to build systems and processes on top of each other, such that you end up with documents that are hard to keep up to date and instructions that conflict with each other. Every few years, conduct a thorough review of your SOPs, processes, work instructions, policies, and related materials. And make sure that old information is archived. This is often the time when hiring a “Director of Operations,” or “Director of Miscellaneous Things,” becomes key.
Compensation structure – Don’t have everything be a one-off
In the war for talent, it is easy to throw money at someone who seems to have everything that you need. I get it. Talent is key! But it usually results in inequity and long-term issues. Consider implementing a structure and process that takes the managers out of the role of the bad guys when they don’t give in to every whim/request. I have seen organizations struggle with employee expectations: as soon as one person gets a pay increase after receiving an offer from another employer, and the organization counters, a long line of other employees hears and makes a beeline for a salary increase.
Benefit strategy – different options/issues once you hit 50 employees
They say that people will take a job for the compensation but stay for the benefits. As you are scaling, you need to keep people who are aligned with the mission and equipped with the skills – you don’t want to lose them! Thus, make sure you have a strong benefits structure in place that is competitive within your industry and region, and that provides options for single people without dependents as well as those with families and more complex needs.
Career development
Once you hit the second stage of growth, internal career development should be something that you focus on to help develop and retain talent, and to do so in an affordable way. It’s cheaper to build than to buy your talent. Create promotional tracks that excite your employees and help them clearly visualize their future at your company. Also include awesome onboarding, training, and mentoring programs to get them acclimated and contributing as quickly as possible.
Phew! Thanks for reading, and I hope that some of these tips, tricks, and lessons learned by other founders will help you on your journey. Please reach out to me at [email protected] if you have other tips or comments to share – I'd love to hear from you.
