The subject of how companies staff their businesses, manage their employees, and administer the employer-employee relationship has been lingering in my mind for some considerable time. Today, I will try to put some order to it. Staffing.
At the core of every business is people. It starts with the founder(s) and then grows. A company cannot grow without being a capable employer, but little is said as to the system by which that happens.
Allow me to jump ahead. Assume:
1. You are a founder/CEO who now has some semblance of a product, are struggling with product-market fit, have raised a bit of capital, and will have to hire people to drive and scale the business.
2. Assume, in the alternative, you are a founder/CEO who has more than 50 employees, plenty of money in the bank, have achieved product-market fit, have 1,000 customers, and are now ready to really scale.
I use these two examples because I hope the logic is universal.
Here is what you have to do:
1. Define the organization that you will be staffing. [I believe that dollar weighted organization charts projected in six month intervals — meaning Mo #7-12, Mo #13-18, Mo #19-24 — is one of the best tools to project growth. If they are “dollar weighted” then they drop into a spread sheet with ease.]
The Dollar Weighted Organization Chart
2. Identify the positions that are to be filled with carefully, cross-pollinated job descriptions or use a Basis of Employment document.
I see a lot of laziness in this area. This laziness costs time and money in the future.
3. Clearly identify the job you are seeking to fill. If you get this wrong, you may, literally, hire the wrong person for the wrong job.
4. Identify the right channel to find the right person. With many of the good hiring apps out there — I like Indeed — this can be very simple.
When you are doing local networking looking for that world class senior software engineer, this can be much, much, much more difficult. Often you are looking for a person who is not actually looking for a job.
A good CEO is always hiring. A great CEO has a list in a notebook of people who want to work for her.
5. Hire the right person based on the work done until now. Now, the real work begins.
Always hire by means of a written offer that is returned signed. Provide as much information as possible.
Every second invested here will deliver a huge dividend in clarity and understanding. Break a sweat in crafting the offer letter. Know that the offer letter is the first piece of evidence in the event something goes terribly wrong.
Never, ever, ever hire anyone unless you have gone through the company values with them in infinite detail. Find out if you have a problem now, not in six months.
6. Onboard the new hire in a memorable, complete, spectacular fashion. It is just amateurish not to have the organization ready to receive the talent.
Have the equipment, the work station — all of it — ready to go. I would even want you to have business cards printed. This is big stuff. It set the “first date” tone of the relationship.
7. Check the person into the culture both smoothly and forcefully. During the hiring process, you should been constantly asking yourself, “Is this a culture fit? Does this individual add energy to the culture?” If you cannot shout, “YES!” to those questions, then take a step back and re-trace your steps.
This is where most bits of advice end, but it does not end here. It continues.
8. Assign clear, precise objectives to the individual before they arrive at the company. In the Vision, Mission, Strategy, Tactics, Objectives, Values, Culture graphic — this is the Objectives part.
9. Ensure that objectives are reviewed monthly and that performance is appraised twice a year — based on objective attainment.
Ensure this is a fair, deep assessment of performance that is oriented to the attainment of objectives. DO NOT RUSH THIS.
10. Make compensation a part of the second performance appraisal every year. Ask the question, “Are you fairly compensated?”
Be prepared to engage on this subject. When comp is directly related in time to performance appraisal, the ironclad link is forged hard and tight.
11. Ensure that your performance appraisal answers the following questions:
How does this person perform v expectations? Better, as expected, worse?
How does this person perform v market peers?
How does this person perform v company peers?
How has this person developed in the last year? [Is there a definitive training or development plan?]
Should this person expect to be promoted within 90 days? Within 12 months?
Should this person expect to be terminated within 90 days? Within 12 months? [I once told a direct report they should expect to be terminated within 90 days. He transformed himself thereafter into one of the best hires I ever made. Direct, candid communication can work wonders.]
Performance Appraisal — Generic Form
12. The now-no-longer-new-employee requires a good training program that is either self-directed and monitored, or company-sponsored (or a combination of both).
I have always thought that the failure to enhance skills through training is one of the worst failures of a company. I always received a great return on investment through training. I have literally bought lead and gotten gold through training.
13. In addition to the direct employee issues, the employer status requires significant record keeping for, unfortunately, defensive purposes.
Ensure that comp levels are consistent across genders.
Ensure that performance appraisal is consistent, fair, and documented — particularly in the realm of discipline.
Ensure that records support and verify diversity objectives.
In the end, this organized approach will align efforts, minimize the friction lost to administrative issues, forge a stronger, more personal relationship with individual employees, and provide a critical frame of reference from which to evaluate growth issues.
Done well, it will align efforts, multiply the collective impact of a team, avoid controversy, and make for a more joyous work environment.
The job of a CEO is to provide a work environment in which employees can blossom and perform at progressively higher levels of excellence.
The purpose of this blog post is to get you thinking, not to give you a checklist to follow.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Have a great week.