A (if not THE) key component of your business lifecycle transitions are effective People processes and the Human Capital they bring to your organization. In my previous career in Aerospace as well as in my work as a Transitions Consultant, I've found one of the root causes of much stress and hardship on the part of business owners is that they are in dyer need of designing, implementing, improving, scaling, and adapting the people oriented processes in their businesses to meet their goals. Believe it or not, people are still and will remain so long into the future, the core element of your businesses excellence in delivering your products or services to your customers on time and with the highest quality. There are several stages to the processes involving people in your organization as well as some unique characteristics in each stage of a businesses lifecycle. I'd like to explore them here, provide some resources for further discovery, and point you in new directions for being the best organization for your people so they can be the best for your organization.
Stages to Your People Process
There is a lot more to each of these stages than what I've laid out here. However, I thought I'd provide an overview and some perspective on how to take a systems view of your people processes. I think it's of the utmost importance for business owners and executives to see their people processes from a systems perspective because this is crucial to delivering on time quality, the first time and also to ensure your people, processes, and business grow and improve in alignment with one another.
- This stage is about searching for qualified employees but starts with first understanding clearly what it is you need from the employees. From the highest level, you should clearly describe the Outcomes, Responsibilities, Capabilities that are required for the employee based on what's needed now but also in the not too distant future. The more holistic you make these descriptions the more successful you and the employee will be.
- The best way to search for employees is via your own personal network but 2nd best to that is via trusted employee or associate networks. This way, much of the vetting and familiarity is already accomplished and so you have a leg up on the prospective employees being reasonable fits with what you're looking for.
- The 2nd level approach, depending on the criticality of the job as well as the current conditions in the labor market, is broadening the search either via semi-automated means like Indeed.com, ZipRecruiter.com, Monster.com, or LinkedIn Job boards. These are kind of the "mass broadcast" approach so you'll 1) overcome the noise of a hot job market but also 2) be prepared to filter a lot of applicants. The next approach for a critical job posting for a high caliber employee is hiring a recruiter or headhunter. Some might perceive this as an added expense but believe me, having a qualified support professional to help you in this process can pay orders of magnitude back to you in value, freed up time, and getting the most effective use of your dollars.
- This is the interview stage of your people processes but also involves ensuring the candidate and their closest loved ones are sold on them working for you. This might seem over doing things at this point but this is where the relationships start to develop so selling them on your organization is critical. Once you've Screened an Employee (interview #1, 30 minutes, phone) and they've passed muster, think now that you're already starting the selling process of the candidate on your organization. The next few interviews (yes, more than 1 is probably crucial to success, in person, 1-2 hours) should be accomplished with you as the hiring manager/owner but also with key personnel you trust and that perhaps they'll be working with. If you're large enough to have an HR function, likely this is the point they'll participate. Have 1 or two more. The next interview should involve a different employee or set of employees to get a total, well rounded view of the prospective candidates.
- The candidates ought (whether you're in the startup stage or exiting your business) to be judged against a set of Outcomes, Responsibilities, and Capabilities. Depending on the stage of your business lifecycle, the O's, R's, and C's composition will be different but not that you should have ANY in the first place.
- For O's, R's, and C's not yet demonstrated by past experience, look at the employee with a "Skill" and "Will" frame of mind. They may have skills but also do they have the "will" to accomplish and follow through on what you require?
- Remember to keep selling them! Especially during the offering --> acceptance stage of selection.
- This stage is the often forgotten or misunderstood stage of bringing on a new employee. This is the "get to know us, get to know you" stage but also this is when you establish foundational expectations of all employees, give the various business overviews, as well as establish the "cultural" look/feel of your organization. This is also when the newly hired employee, whether direct labor or management, should get a systems view of the processes they'll be involved in.
- The employee should be given the high level picture of your business model, who your core customers are, key suppliers, key activities, how you interact and access your customers, what they consider value from your organization (your value proposition), what problems you're addressing for your customers and what your current solutions are. They should also clearly understand what your competitive advantages are as they will be expected to uphold those advantages and improve them in the future.
- The next level down in your systems introduction during the onboarding stage should involve their specific job role in the organization. This is true for product or service oriented businesses, in direct labor or support functions, really everywhere. They must understand clearly what is "upstream" and "downstream" from them in the process, from their perspective as well as from the customers perspective. They should understand clearly what a quality input to their process is from upstream, what a quality product is they'll need to produce (and what a bad product/service is as well!) and what the downstream process stages require from them.
- In another post, I shared an in-depth approach to training that I think anyone can learn from and utilize but most effectively employ if they and/or their employees take courses in the Training Within Industry Methodologies. I won't repeat them here but only add a little more.
- Know you must have effective training materials but also that you have trained and professional training delivery. Both of those are CRITICAL to successfully training an employee. The object is to get an employee trained and up to fully productive as soon as possible. TWI methods can help you do just that.
- As mentioned above in Onboarding, the training stage is where First Time Quality is explored and trained in a much deeper level. Ensuring you're employees accept and pass only First Time Quality (whatever your definition is!) will ensure your dollars for employee compensation = maximum value to your products and services and ultimately your customers. Otherwise, you have waste being produced and moved around in your organization, and that's important to minimize at any stage of a business lifecycle.
- Training plans should be put in place across the organization for each employee by what critical skills they need to accomplish their job requirements. A timeline should be associated so it's clear to you, your employees, and their peers on how everyone will be trained and cross trained over time. This is probably most likely and beneficial in a mature organization and also when succession planning and transitions are actually happening in ownership/management in an organization. Startups and scaling organizations need to train but also need to be vastly more agile in doing so.
- Performance Management
- If you clearly understand the job roles in your organization, the employee does as well, and has been provided ample training, Performance Management should be a piece of cake for everyone. I really support integrating nearterm and ongoing coaching into your overall view of Performance management where employees can provide useful feedback and you can adjust course as necessary for both of you throughout the year. I am fully against only 1 or 2 discussions on a yearly basis. This is nearly useless from a training and development perspective. If an employee is coachable and you are receptive to feedback on their needs and roadblocks in their work, PM time should be smooth.
- I also believe in clear compensation for performance guidelines. Vagaries for any reason will not work well for anyone. Money isn't a long term motivator as it's shown to where off it's motivational boost over the medium term (3-6 months post "raise" time) but understand the bigger picture of what employees value and gives them motivation can be integrated into their PM's and overall compensation/benefits. In Ray Dalio's Principles he describes in detail his approach to his idea meritocracy which is a profound approach to this view of employee relations.
- Development is about the long term view of your employees and their interests. This is the higher level view of their growth and alignment to your businesses growth and improvement. This is outside skill level specifics to their job role. I'm a firm believer in mutual design of development plans and think working on them in harmony between an employer/manager and the employee will bring about the best win-win solutions for everyone.
- This ISN'T performance management and looking in the rear-view at whether or not the employee is or isn't meeting the expectations of the job (as laid out in the O's, R's, and C's) but rather is forward looking and more strategic in nature. What are those capabilities that the employee excels with and how can you strengthen and deepen them for the betterment of them and the organization? Does the employee have potential in other areas in the organization and would they benefit from cross exposure to other areas?
- Some good resources for this stage (and just in general) are books like:
- What Got You Here Won't Get You There by Marshall Goldsmith. This is a list of 20 characteristics of individuals that often keep them from growing and excelling and how to understand whether you have some of these qualities and how they are limiting your development potential in your organization.
- Emotional Intelligence 2.0 by Bradberry et al - this a fairly well known book and while I'm not 100% sold that EQ is equivalent to IQ in many ways, this book includes and assessment but also frameworks for improving your personal emotional intelligence and how to improve your working relationships with others.
- There's no easy way to part ways with employees in your organization whether it's mutual or one-sided. I think what's key in all situations is that everyone leaves in better shape than before and relationships remain in tact. Staying clear on mutual expectations throughout an employees time at your business can definitely help with any surprises but also another critical way to avoid explosive departure scenarios is to have a keen awareness of fitness, both in the job role but also culturally in your business. Understanding how employees and your organization prioritize the 5 F's: Fun, Family, Fortune, Freedom, and Fit can help to see clearly the varying importance of these aspects of any companies culture and will provide insight into potential future divergence if they aren't aligned well.
- I am a big proponent of doing Exit Interviews if at all possible. This is the opportunity for the employee to be completely candid (without being unprofessional of course) and perhaps in ways they never felt comfortable being if they depended on the organization for their livelihood. My experience has been the kinds of insights you can gather in an Exit Interview can be powerful in future improvements to your people processes.
Unique Considerations in the Business Lifecycle
There are a few distinctions to be made, and I'm sure much more to be elaborated on, for each major stage of a businesses lifecycle. I felt it was worth discussing here.
- I strongly believe setting out Outcomes, Responsibilities, and Capabilities is crucial in any stage of a business. However, in a startup, when revenues are either non-existent or extremely low and product/market fit isn't achieved yet, it's probably most crucial to have high caliber generalists (can synthesize and apply knowledge to new situations) who are adaptable and flexible in their communication styles, tasks they can accomplish, as well as their willingness to try new things. Ability to handle ambiguity is also key with a specific ability to pave new ground and create new processes as needed.
- Adaptable communication styles and methods is also important at this stage. As a team grows and the processes get more sophisticated, employees must also learn how to find and utilizes the best methods of communicating between one another.
- Organizations that are scaling are in a unique stage of creation and destruction. Old, inadequate processes and ways of doing things that are not scalable (or basically don't require 1:1 growth ratios, like just adding more employees to a production line for instance). Employees must be adaptable and yet iteratively reestablishing standards to stabilize, improve, and grow as the business scales to meet increased customer demands. Systems thinkers are also a key capability to have at this stage so they can take the wide view of the business and processes and know where the critical investments in machines, people, processes, methods, etc. are needed to maximize every dollar spent in this "cash starved" stage of a business.
- This stage is characterized by the need to standardize processes, reduce waste and inefficiencies, and find new ways to do more with less. All other things being equal, inflation and wage growth will be increased costs to doing business so a maturing organization must find ways to be more productive and keep employee levels constant, in my opinion.
- Also, mature businesses seek growth by entering new markets or expanding on existing products and services to their existing markets. This requires creative thinking as well as adaptability to new customer needs that might surface as you expand your awareness and work towards new revenue streams.
- This stage is characterized by owners transitioning out of the business and someone or a new group of ownership taking over. This is another stage of ambiguity for the employees and they aren't going to have all the information at the start. Employees must be trusting enough, and owners worthy of being trusted, that things will work out in everyone's best interest and if changes to employment are coming they'll be informed in the right ways at the best possible times. Employees that freely share information and knowledge and who know how to document their tasks and processes will be highly valued in this stage. My intent isn't to imply they'll be laid off but rather for the best transition of ownership to happen, information and communications should flow freely and unencumbered by knowledge hoarding and ill will.
I hope this systems level view of your people processes and workflow has generated some new thinking and pointed you in the direction of the priorities you want in establishing and improving those processes. Please feel free to comment below or contact me directly if you need services around getting the right people in place, establishing the best people focused processes for your organization, and getting your people to be a major part of your competitive advantage!