Startup Success - Why HR is Not an Option

To build a unique cultural DNA, the focus must be on the customer and the people-centric USPs that the Startup wants to create.

 

Two months into 2020 and we are still seeking out lessons from the past to tread with confidence in the future. Ironical? But such is life!

 

As I woke up groggy with a bad headache and not wanting to go to work, I stretched over from one side of my bed to another, overlooked my balcony and saw a friend jogging backwards on the promenade. I was amused at the ease with which he managed to do so. I kept tracking him as long as he was in my view, and as I lost interest without even remembering why I was tracking him in the first place, I went into a state of trance. A soft familiar voice whispered in my ears, “Main Samay hoon.” Although I was running an hour late for work, I went back to the soft familiar voice, and this is how we spent the next hour.

 

Me: Samay! I am so glad you stopped by. Being a millennial, I am curious to go back into the past and take a look at what I might have missed. I know it is a challenge to travel against time, but why worry when I have “Samay” himself to take me on this retro journey!

 

Samay: Pleased to meet you too, Sahil. It is indeed interesting that you have chosen to travel back in time while everyone else is talking about the “Future of Work”.

 

Me: I have been reading and hearing a lot about what to anticipate for the future, and so I thought, won’t I get wiser by picking some learnings from the past? Like a tall tree that has grown from a tiny sapling, a business that has grown big would have begun as a humble Startup. Take me through the life cycle of a Startup- its stages of infancy, teething troubles, adolescence, until it reaches maturity as a stable business.

 

Samay: You do know how to get what you want. So here it goes, the story of a Startup. A bright young girl wanted to break away from her family business and experiment with a new idea. After the idea of a Startup was conceived, she had to wait patiently to validate her business proposal, and remain focused for the entire period of gestation. The fear of an early failure was high!

 

Me: That sounds interesting! This is so much like the apprehensions and expectations of a mother-tobe. I am sure the young entrepreneur must have got many ideas from neighbours and wise elders.

 

Samay: Oh yes! A team of people stood with our young lady right from the start. Firstly, they illustrated an excellent framework describing the main stages of a growing company:

 

In the first stage, the organisation has less than 10 people. It is composed of a “tiny, close-knit team” where the people are “all doers and very adaptable”. At this stage, the key HR challenge is to articulate a compelling vision and mission and to develop the execution capabilities to progress towards it. Also, the right kind of people must be onboarded at the right moment.

 

Top considerations during this stage would be:

 

Building the company culture: Startups often wonder over the ways of creating a good company culture that is suited not only to the current environment, but can also adapt to future environmental changes. Culture, built on the exploration of what works and what does not, requires the founders and the key influencers to convey clear messages about the type of actions and behaviours that are valued. The culture will be shaped with greater effectiveness by clear and immediate feedback after a given action or behaviour. Also, “reinforcers” are usually more effective than “punishments” for failed experiments in building a successful and sustainable culture. However, non-negotiables and zero tolerance behaviours must be communicated to all, and when such instances occur, some tough calls need to be made.

 

To build a unique cultural DNA, the focus must be on the customer and the people-centric USPs that the Startup wants to create. Subsequently, these USPs should get reflected across all the HR strategies and frameworks to bring a sustainable competitive advantage.

 

The first hires: Often, the hiring needs are loosely defined at this stage. Begin by defining and documenting what the company is exactly looking for. Only then will it be clear where to look and how to determine whether the candidate is a good fit in terms of skills and cultural fitness. There is nothing more detrimental than building an organisation with employees who lack the drive as also the right skills. The first few hires will act as natural brand advocates to a wider network of people, and send out a strong positive signal for every new candidate, despite the lack of resources, and the young age of a startup. Also, if the right people are onboarded, the culture will take the right shape for success.

 

Hire not just for the count, but for accountability: Homogeneity will hamper diversity of perspectives. Although Startups aim to be diverse and inclusive by design, they end up being a group of like-minded people who hire more likeminded people.

 

Me: This makes sense to me now. During the formative stages, it is very important to provide the embryo with the right nutrition. Let me guess the story from this point forward—it seems like familiar territory.

 

The second stage is where most of the HR processes and procedures would be developed. The HR professional would need to work on the organisation structure, career architectures, compensation philosophies, performance review procedures, etc.

 

Here, the key considerations would include the following:

 

Balancing formalisation and agility: HR professionals often fall into the trap of implementing too many processes and procedures with limited benefits. This often leads people to think that HR is merely wasting time and resources. On the other hand, it is sometimes evident that Startups are lagging and require more formal processes. The key here is to find the right balance between the two approaches.

 

Adhering to industry specific compliances:  This is often the stage where many legal obligations and industry-specific legislations have to be met. Right from the start, Startups must understand and commit to adhering the applicable laws.

 

Copy-paste HR models do not work: The temptation to simply copy-paste the best practices in other Startups should be resisted. The HR models that worked well for other companies may doom your organisation to failure. The processes should be designed based on the company’s DNA and the marketplace.

 

(You are a smart reader if you have figured out by now that it isn’t “Samay” but my alter ego that is feeding into my ego and the deeper need to be appreciated.)

 

Samay: Very well said, Sahil! But we also need to ensure sustainability, isn’t it? A growing company of 100+ people raises a very different challenge than a Startup with 30 employees. Let me take you through the critical HR focus areas during the latter stages of a growing company:

 

Change management: A Startup is dynamic in nature and goes through changes at an overwhelming pace. If employees are unsure about the upcoming changes, such an uncertainty can drastically reduce motivation and cause valued people to leave. It is critical to help employees understand and accept the need for change, quickly respond to the concerns and resistance that may arise, and be transparent about how it may affect them. HR has a stellar role to play in leading the change management initiatives through a personalised approach.

 

Redesigning processes and working on top to bottom alignment: At this stage, everything needs to reassessed and redefined for scale and alignment: the compensation philosophies, career management, performance reviews, setting expectations, and so forth. For a rapidly scaling company, HR  policies and frameworks must be viewed through the lens of longterm sustainability.

 

Effective communication: Clear and consistent communication is required to build a strong employee culture. Weaving a culture with no tangles using the communication thread that runs across the organisation is efficiently done by someone who has the expertise in dealing with people. The developing culture of a Startup initially witnesses everyone to be constantly working at an incredible speed and trying to deliver unbelievable volumes. This seems to work well for a while, but then the enthusiasm begins to dip.

 

Business heads are often unable to diagnose the problem precisely. And this is where an HR professional wielding the baton of communication appears on the scene to cascade the right messages at the right time. In the absence of a common thread of communication to bind the organisation together, one will see siloes forming within the growing company. While this is an unwritten fact, we all know that communication is frequently overlooked as a key component of successful Startups. Of course, when this happens, who better than the HR guy to clean it up? It almost feels like one is calling the janitor. Who else knows the pulse on the ground so well, who else can help bring the business back on course.

 

Me: Zoom in for details and zoom out for perspective is the HR mantra for Startups. Everything can change drastically in an instant for a Startup, and conflicting directions can make it hard to know if your company is on the right path. Someone once told me: Do your job well, and you know you are doing it right. In the context of a Startup, the values, principles, and beliefs must be ingrained deeply in its people by HR carrying out immersive programmes for all the employees who hold key positions in the organization

 

Samay: Oh yes! HR adds value not just in spreading the right people culture, but also in understanding the environment. HR quickly builds a network in the environment to share learnings and best practices for positive growth. Startups also believe that it is better to fail early, and there should be no punishment for failing after testing new ideas. It is therefore important to understand that it is good to experiment without fear of failure as failure is a journey to growth. Thus, an organisation is born with its employees having no fear of consequence, and are hence always ready to innovate. All this is possible thanks to the able support by HR – said a business leader only in the presence of his HR team!

 

Me: This is indeed true! Many a time, we ignore the fact that there is a lot of effort that goes into building a culture with no fear of consequence. Mature organisations have well-defined cultures, clear targets, systems to measure performance, and processes for the development of skills and optimisation of performance. HR would have been the brain and the spine behind setting these processes in place

 

Samay: Of course, HR is all about a perfect blend of three ingredients: Common sense, people sense, and business sense. Any organisation, Startup or otherwise, is aware as to how to blend these three perfectly are slated for success. Many a time, employee relations, conflict resolution, disengagement, and finally, employee turnover can be meaningfully handled with efficient HR / HR enabled task forces.

 

I bade a fond farewell to “Samay” and of course, time travelled back to the present— almost like I had taken a complete round of the promenade, and my waistline felt a couple of inches lesser. I hit the peddle as I raced to work, and the radio flooded me with a series of successful entrepreneurs who leverage Amazon to sell their homemade stuff, about an HR lady who loves baking cakes on weekends and has tie-ups with the Zomatos and Swiggys of the world. I smiled to myself, “And the journey continues. The unbreakable relation between business and HR.”

 

 

Sahil Nayar is a Human Capital Professional working at a leading professional services firm in the country. At leisure, you would either find him sharing his perspectives with budding talent at various Business Schools across the country or traversing treacherous roads over various genres of music. Views are his own. He can be reached on Twitter @sahilnayar.

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