Hiring your man friday

Hiring your man friday

10 Aug, 2007, 0532 hrs IST,TNN

I am a first-time entrepreneur manufacturing women’s wear accessories. Till recently, I used to work out of my house, but in the last few months there has been surge in the number of orders. Now, I am contemplating a full-fledged professional set-up. What are the red flags that I should look for in a resume when I interview candidates for such senior positions in crucial departments like finance or HR? Kindly advise.

This is what we call in the business “a good problem to have”. The hiring and on-boarding of professional talent is a classic growing pains-type of problem that is faced by every entrepreneur.

From my work in Silicon Valley, I have observed that startups in any industry go through three distinct phases of organisational growth characterised by very different needs. Stage One is all about innovation — creating that “killer product”. In this stage the strategy focuses on speed to market and the emphasis is on creating a culture of innovation by hiring and nurturing creative talent and product development skills, in an organisation that is relatively unconstrained by formal structure and roles.

Stage Two is all about market penetration — creating as broad a
footprint as possible for the product. In this stage, the strategy
focuses on building awareness and creating sales channels, and the
emphasis shifts to building a sales culture by hiring market developers
and salespersons, and getting more sophisticated in terms of measuring
and rewarding sales performance.

Stage Three marks the “graduation” from startup to a viable business.
It is entered when the company realises that it is has grown so quickly
that things are getting out of control, and there is a risk of
frittering away the gains it has achieved to competition that will
quickly smell success and move in, sometimes with deeper pockets.

The focus of this stage of growth is profit extraction. The strategy
focuses on balancing the competing demands of effectiveness and
efficiency — bringing costs and quality under control while maximising
revenue. The secret to success in this critical third stage is
recognising and managing the interrelatedness of the 3Ps of successful
growth — professionalising, introduction of process, and profit
extraction. Professionals bring expertise and experience with having
“been there, done that”. The introduction of process brings greater
predictability that is critical for better coordination in a growing
business, and greater control over cost and quality. Finally, the
emerging emphasis on profitability marks the transition from a wistful
startup to a viable commercial business. Many startups fail because
their leaders don’t recognise that their organisation and mindset
regarding how they are structured, how roles are defined, who they
hire, how they are rewarded, etc., needs to consciously make the shift
from one stage of growth to the other.

The introduction of the 3Ps of growth into a startup is always a very
difficult challenge. Startups are often fired by visionary even
missionary zeal, and a sense of intimacy, of being like family. That is
exactly what is needed for success in Stages 1 and 2, but could also
become the biggest stumbling block to success in Stage 3.

The hiring and introduction of professionals will often become the
lightning rod for drawing criticism from employees who are used to a
“just do it” way of operating and see the professional as the one who
“doesn’t get it”. The trigger for this ire is almost always the
introduction of process — which is the ugly “P-word” in the world of
entrepreneurs — and the increasing emphasis on cost or bottom-line
considerations.

The writer asks the question about red flags he/she should look for in
a resume when hiring senior staff for the first time in a startup. The
fact that he/she recognises this is going to be a challenge is a good
sign. So how should we go about it?

Success of senior staff plays out in three acts spread out over a year
or so. Act One is the hiring of the right person. The entrepreneur
should look for fit in terms of attitude, experience, and expertise in
that order of priority. Attitude in terms of willingness to work in an
environment that may be more rough and tumble than orderly.

Experience of having worked in unstructured and rapidly changing
situations, introducing process and discipline into it and dealing
with/overcoming resistance. And expertise in the relevant functional
area. There is nothing wrong with hiring someone with a big company
background to work in a startup as long as they meet the selection
criteria. On the other hand, selecting someone whose resume suggests a
gap or lack of fit in one of the three ingredients attitude,
experience, or expertise, could be risky.

It is important, however, for the entrepreneur to recognise that
success will depend not only on good hiring, but also on Acts Two and
Three — on-boarding and on-going support. By definition, every startup
feels different and operates differently. Any new hire that comes into
senior positions will be seen and treated as an “outsider”.

It will be important to anticipate this reaction and pave the way for a
smooth on-boarding of the new senior hire because startups cannot
afford disruptive internal conflict. Within months, as the professional
starts introducing the business processes that he was hired to
implement, waves of resistance are likely. This too can be managed with
sufficient forethought and planning. These actions are not just
important, they are critical to ensure the startup moves past its
growing pains to becoming a viable business.

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