When starting an organization, the founder’s main priorities are often the product or service, gaining clients, funding and overall business strategy. Once the company begins to hire and expand beyond the founder’s network, however, implementing people-focused processes becomes crucial.
4 processes to perfect at your organization’s medium stage
- Organization design: An organizational chart with reporting lines and responsibility allocation.
- Employee/leader development: A process of leveraging employees’ and leaders’ skills, competencies and knowledge.
- Employee relations/engagement: A process of creating and maintaining positive and effective relationships in the company.
- People operations: All operations managing labor that support people processes.
Must-Have Vs. Nice-To-Have Processes
After working with 100+ companies of all series funding levels as well as mature companies, I’ve identified a comprehensive list of 17 people-related processes that you should consider when creating and scaling up an organization, noting which are must-haves and which are nice-to-haves based on each stage of growth. While you can’t do them all at once, you should have a sense of urgency based on the rate of growth or future growth goals.
As I noted in the above chart, the two non-negotiable, must-have processes every company should have, no matter the growth stage, are:
- Organizational culture: A collection of values, practices and ways of interaction between people in the organization.
- Internal communication: A process of communication rituals (monthly company meetings, weekly/daily team meetings, one-on-ones) and tools you can use to communicate with employees (chats, platforms, newsletters).
Organizational culture and internal communication will always be critical, because you can’t hire or communicate well if you don’t know what is okay and not okay to do. People within the company need to be able to describe it and name it.
With a well-established culture, you can attract the right talent and check if the soon-to-be-hired people have similar values and/or work ethic. Many new and fast-growing companies overlook the importance of creating an organizational culture because they see it as an unnecessary effort. In reality, culture is what distinguishes your startup from other companies.
4 Processes to Solidify During the Small Stage
When growing beyond 20 employees, you must establish and tidy up workforce planning, recruitment and onboarding processes. This is often the trickiest hurdle to overcome at the early stage of 20 to 50 employees, as founders have usually been recruiting with bias by hiring friends until this point.
Because relaxed vetting processes have inconsistent hiring processes, this method is unscalable and inefficient when companies seek to grow into the medium stage (from 50 to 150 employees). Founders need to professionalize the recruitment and onboarding processes. Every candidate needs to go through the same recruitment stages, no exceptions.
Although onboarding is one of the most important processes, it’s often the most overlooked by startups. Leaders tend to be exhausted by the time it takes to find and hire the right candidate, and they are eager to throw new hires into the day-to-day operations of the organization. Particularly if the candidate is experienced, leaders feel they can drop them into the position of their specialty and leave.
Good onboarding ensures candidates understand how things are done in a company as well as the “why” behind the company’s approach. Here are the first four people-related processes you should solidify while growing your organization from the early stage to the medium stage.
- Workforce planning: A process of analyzing and planning the right number of people with the right competences and knowledge at the right time.
- Recruitment and selection: A process of finding and choosing the most suitable candidates with the right competencies, skills and knowledge, taking into consideration the business needs. The process finishes with the candidate’s rejection or an offer.
- Pre-onboarding: A process between the acceptance of an offer letter by a candidate and their employment start date. It consists of two types of activities groups: The interaction with an employee-to-be, and the preparation of necessary documents, tools and licenses.
- Onboarding: A process of welcoming new employees and integrating them with other people, culture, rituals and business processes so they can become autonomous and independent at their work.
4 Processes to Nail Down at the Medium Stage
In the medium stage (50 to 150 employees), you must build a strategy for reporting with a clear organization chart that allows each team member to see the reporting structure. Processes need to be human and reporting structure oriented to ensure workers have the support to complete deliverables well and on time. The process should also have a consistent rhythm built within a routine.
A common cause of conflict in startups is when you grow a team of 70 to a team of 100 without growing to scale. This causes leaders to inefficiently manage their direct reports, messy processes and a lack of rhythm and routine.
Founder conflicts also begin to bubble up at this growth stage, as employees are used to working closely with the founder’s team, and the founder is used to making the majority of important decisions. To scale, the chief executive officer and/or founder starts to drift away into other areas of responsibilities. This can cause leadership challenges as the CEO starts to distance themselves from other C-level team members, who must remain at the same level of dedication and engagement.
When you scale the company, you must establish critical personas for customers, so everyone knows the goal with or without the founder in the room. Here are the necessities for medium-sized organizations:
- Organization design: An organizational chart with reporting lines and responsibility allocation (local/regional/global).
- Employee/leader development: A process of leveraging employees’ and leaders’ skills, competencies, and knowledge by using different methods like job experiences, trainings, mentoring, peer-to-peer feedback, shadowing, coaching, promotions and career development.
- Employee relations/engagement: A process of creating and maintaining positive and effective relationships in the company in order to keep employee engagement high.
- People operations: All operations managing labor, like personnel administration, payroll, metrics and systems that support people processes.
Most leaders would prefer their HR processes to be a series of boxes they could check off as they complete each task without acknowledging the nuanced processes that go into addressing and improving the employee experience.
Move away from the typical HR mindset that creates processes and procedures without involving employees, and move toward a people and culture mentality that gives people ownership over the processes that concern them. Processes should create and reinforce the employee experience. Processes are for your people and you must always maintain and update them to grow alongside the company.