29 July 2019 – by Patrick Caldwell
LinkedIn is full of companies and HR professionals who share photos from company retreats, amazing recruitment stories of hiring underdogs who prove everyone wrong and the infamous 🚀and🦄that seem to signal some form of start-up success.
We do this at FundApps as well because #yolo, but under the skin of all of these companies, FundApps included, is a path walked full of challenges, doubt, uncertainty, tricky people situations, conflict and frustration. We don’t talk about these enough. And most are things I wish I knew or could think about a bit earlier.
When I started in a 20-something person start-up in late 2017, I found myself in an uncomfortable, but exciting, situation where we had a mostly blank canvas, a completely bootstrapped business model which did not require any funding (rare in start-up land… we seem to enjoy celebrating funding rounds much more!), an enviable growth curve ahead and a company looking to this newly formed People Ops to help guide us to become one of the most awesome companies in the world. Sounds straight forward, right?
It takes a certain type of person to work in HR and an even more specific person to work in HR in a start-up. You need to:
- Be prepared to get your hands dirty. There’s nowhere to hide in a small company.
- Apply pragmatism and fairness rather than just policy.
- Understand deeply the business context and drivers.
- Be at peace with uncertainty changing demands
- Know when structure and process helps rather than hinders.
- Build credibility in a role that is sometimes difficult to articulate the business case for.
- Swap between coach, counsel, sounding board, ambassador, advocate, employee and someone who can just call out BS if and when they see it.
Disclaimer: I am not a people person. It’s a common misconception about HR generally that we love people and it’s what gets us out of bed in the morning. Some people do, and that’s great. But for many HR professionals, myself included, we find ourselves working in HR out of a fascination, curiosity and passion for people, rather than a love of simply working with and being around people. People are as complex and messy as they are exciting and rewarding.
1.Ground your decision-making
Ground your decision-making as much as possible. Stop trying to please people. Good decisions sometimes piss people off.
I sometimes wish HR was more black & white. More right and wrong. Like math! Instead, we’re faced with various shades of grey and asked to navigate through the grey. Good judgement is important, but more important than just judgement is how you anchor it within relevant data and information.
As a bootstrapped company we don’t have any deep pockets to reach into. We have learnt to operate within our means with the cash we have, which means making educated and informed decisions on where we get the most bang for our buck. Salary represents our biggest area of spend as a business (surprise!) and therefore one which we sought to ground our decisions in data as much as possible. It was a no-brainer, but that doesn’t mean it was without consequence.
Everyone supports a data-driven approach to compensation, until the data conflicts with their internal sense of worth.
Putting some principles around our approach to reward helped us make more consistent decisions, to cut in half an embarrassing gender pay gap, to better forecast our costs and ultimately helped us be more transparent with our people around how we review salaries. Not everyone is a fan of this, but that’s not the point. The point was to build a more robust approach to reward that could work just as well for 30 people as it can be for 300 people, and didn’t create unfair opportunities for those simply more adept in negotiation.
2.Invest in leaders
Make sure you have a passionate, committed and capable people leadership cohort before, and as you grow. It’s rough ground without it.
Building an empire of HR people in a growing start-up is as good an indicator as any that something has gone terribly wrong on the scalability front. Usually it falls under one of three categories:
 Administrative processes that create complexity or simply more ‘work hours’ as you grow – think payroll, benefits, leave, CV screening etc. I’ll be discussing this in Part 2.
 Lack of definition of what HR is, and what it isn’t.
 Under-investment in leadership capability, either in:
- Lack of leaders and spans of control that exceed what the founder(s) can realistically manage as you grow
- The wrong leaders, full stop. The people who don’t embody the leadership behaviours or cultures you’re trying to achieve. If they are not coach-able, they need to go.
- Accidental leaders – brilliant individual contributors who accidentally ended up with a direct report, then two, then a team as the company grows. All of a sudden, they are spending a disproportionate amount of time doing ‘people stuff’ which is neither what they enjoy doing nor excel in. We have to stop assuming leading a team is the only way to progress a career and start making it OK for people to progress their careers in roles that are not people leadership roles. If a people leader’s answer to “What is your perfect role at this company?” is not a people leadership position, find a better role for them. I can’t think of a more painstaking role in a small company than being a people leader if your heart isn’t in it.
Successful companies need more driven, passionate and successful individual contributors who get shit done than they do people leaders.
An investment in leadership is hard work, but well worth the return. It might take a combination of developing existing leaders, promoting from within and hiring external. In many small companies, even before people leaders are in place, they are seen as hierarchy and structure, regardless of the person and their style. Being clear on the ‘why’ helps, as does time, but most importantly recognising a leader’s shadow can cast deep into the company so the bar for performance and behaviours should be high.
3.Simple is sexy
Avoid short-term temptations and keep employment T&Cs simple and consistent.
There is a certain urgency that HR challenges tend to instil in a business. Unfortunately, urgency has a knack for distorting decision-making towards short-term-ism that come back to bite you in the 🍑.
Take recruitment – You need to grow, fast. You feel the pressure from hiring managers. You find an amazing candidate who at offer stage wants to negotiate on pay, health insurance, commission plan etc. Agreeing a slightly nuanced commission plan, or a higher health insurance package, or a different holiday leave entitlement, seems like a small price to pay to land a candidate and fill that role you’ve been trying to fill for ages! Until you double and triple in size, and realise you have the complexity of individual T&Cs to deal with on a larger scale along with an increased volume of HR actions.
Then, Joe finds out that Sally negotiated a better commission structure than he did and feels like he’s missing out. You get the point.
Simple is sexy, but grossly underrated.
When it comes to T&Cs in a growing company, there is a lot to be said for simple, flexible, consistently applied terms – that applies to notice periods, leave entitlements, benefits, commission plans and bonus payments.
4. Culture contribution, not culture fit
Culture fit is a fallacy. Values fit is not. Bring bias to the foreground and recruit for diversity of thought.
When you’re small enough to fit everyone in a single room, or feed your teams with two pizzas, the culture is pretty fluid. Yes, you can anchor your culture with the company values and ways of working, but ultimately when you double or triple in size, your culture will change. It’s inevitable. We need to stop relying on the fallacy that is culture fit, especially in a small company.
Culture fit is an excuse for hiring in the shadows of existing team members which adds little by way of diversity of thought and constructive debate, both of which are critical to a growing team.
A test I consider when in an interview is whether someone makes me think. Like, really think! Either by challenging my assumptions, or presenting an opinion on something, or re-framing a perspective. That stuff is gold in a small team!
Bring bias, particularly unconscious bias, out into the open early in your recruitment journey. It’s a key barrier to diversity of thought and it’s usually pride that stands in the way of people admitting bias despite the humanity of it. We built some internal training and used the Implicit Association Test as a starting point, but more importantly we talk about it as a team during recruitment regularly so we can challenge each other and not just be a passenger to it. I have a positive bias towards LGBTI people and women, and a negative bias towards older people. One of our tech leaders shared his bias towards men and it helped spark a candid conversation on how we can manage our very natural and human biases throughout the recruitment process.
5. Done > Perfect
Done adds value. Perfect does not. And things will change anyway.
This one is hard to swallow especially if you come from a big business like I do. You’re used to tabling ideas and proposals, getting feedback from stakeholders, having (sometimes) months to perfect an idea, a communication strategy ready to go and an implementation plan to make sure everything is working as intended by the agreed upon dates.
Then you end up in a start-up where most of that means very little. When you’re growing quickly, sometimes having something in place that’s only 70-80% done is of more value to the business than waiting 3 or 6 months until it’s perfect. We’ve seen this with our approach to learning, peer feedback and development conversations, and even our reward framework. We’ve come to discover what’s actually important to land beforehand is:
- An idea clearly aligned to what the business is trying to achieve;
- Choosing the right forum to communicate, and be prepared to tell people several times;
- A rough idea what success will look like;
- A mindset to iterate and improve it as you go.
Since I started at FundApps in late 2017, we have had 4 different versions of parental leave, 3 iterations of our reward framework, 4 different engineering recruitment processes and 2 attempts at OKRs (both unsuccessful). Get comfortable experimenting, failing and iterating.
6. Culture ≠ Free beer, fruit and a PlayStation
Culture is a fluid fabric of systems, symbols and behaviours. It’s how stuff happens, not what’s in the fridge.
We still have free beer, fruit and a PlayStation because we enjoy that stuff. Nonetheless, it’s not our culture. In start-up land there’s a history of relying on the proverbial table-tennis table as a symbol of coolness, culture and how we put people first! Most employees, and candidates in the job market, have now clued on to this vanity and it’s not even a ‘perk’ anymore.
Culture is so much deeper and it pays to get under the skin of your company and really understand how it works. How does ‘stuff happen’? How do people communicate? How are decisions made? What happens when shit hits the fan… Does everyone rally together or do people start pointing fingers or working in silos?
This is what matters to people. It’s why many join a company, and it’s usually what drives people away. At the end of the day if people don’t feel empowered by leaders, have tension and barriers between teams and don’t feel a sense of accomplishment in their work, the free beer and fruit basket isn’t going to keep them around.
7. Self Service FTW
‘Nuff said – You’ll thank us when you hit 50 people.
I have been guilty many times in saying “It’ll be OK for now while we’re small”. Then things go bonkers and you’re left with administrative workload that is taking up your time that could otherwise be going towards more value-adding stuff.
There has never been a better time in the market for HR platforms – Leave, personal details, payslips, expense reimbursements and all the admin bits and pieces can all be managed through platforms that are relatively inexpensive and a worthwhile investment before you think you need them!
8. Design for the 99%, not the 1%
Treat people like adults. Individual, valued, complex adults!
I remember hearing somewhere (potentially Patty McCord talking about Netflix) that we need to stop considering the 1% of people who abuse or mistreat HR provisions and start designing for the 99% of people who don’t. This is a significant shift in mindset.
Here’s a few 99% wins that did wonders for us:
- Unlock the ‘learning lust’ within your people by setting a learning budget. Then remove approvals and paperwork to access it. People will appreciate the autonomy and invest in their own learning. 1% of your team will misuse it, so draw the line in the sand early. We use Sunlight to manage our budget and my role in this now is basically redundant.
- Maternity & Paternity leave are archaic concepts trapped in legislation that no longer reflects modern families. Throw it in the bin and offer parental leave to all parents, without all the policy fluff (e.g. tenure, claw-back, primary/secondary care-giving etc), to make sure they can spend some of the most sacred time in their lives with their family. If you don’t have parental leave in place, or just rely on statutory entitlements, consider investing more in this. The payback, especially as you ramp up hiring for more seasoned professionals, is profound.
- Gym memberships are cool. If you like going to the gym. We asked our people and most people preferred doing something else for their physical health and the list was pretty long. So replace the gym membership, or at least supplement it, with more flexible wellbeing support. We do a wellbeing allowance which can be used on anything relating to people’s physical or mental health. So far, no one has even come close to misusing it… because they value it!
- Having a list of ‘flexible working options‘ is basically an oxymoron. What makes flexible working ‘work’ is that it’s catered to an individual. Introducing ‘one day a week from home’ is just tick-boxing a diversity initiative that adds little value. Start with ‘yes’ unless there’s a compelling (i.e. it’ll actually break the business) reason not to. So far the only thing we’ve said no to was an extended period of overseas working in a distant time zone.
9. Your people strategy is your business strategy
The business strategy and vision drive your priorities. Don’t forget that.
I once worked in a team where we presented the people strategy to the business before the business plan was finalised. Which in hindsight, feels a bit odd. Where did the people strategy come from?
Whilst it has taken a few detours and a couple of wrong turns (from me) along the way, we’ve come to learn at FundApps that the people strategy is basically a subset of the business strategy. There isn’t a single pillar of our strategy, or a single team within FundApps, that doesn’t have a significant component related directly to people. Be it our hiring ramp-up in Client Services to deliver a consistent and exceptional client experience across the globe, how we scale our tech platform and the changes to our ways of working as a result, our reward framework to drive a more predictable cost curve or our investment in learning to increase sales conversion rates.
Don’t waste time designing cool slide decks to present to the business. Instead, get under the skin of all parts of the business, understand the context and performance drivers, consider how empowered people drive success in that area and what is needed to make it happen. You’ll find that people will still be put first, but there will be significantly more buy-in around the work that needs to happen where that work directly impacts the performance and progression of the business. Then, you can hone those PowerPoint skills 😜
10. Be clear on what HR / People Ops is, and what it’s not
There’s a big difference between a operational support team and a business partnership team. Find your purpose.
When you are the first HR person in a start-up, you get to define what you’re there to do. And what you’re not. When I first started at FundApps, our CEO described a ‘cathartic’ response from people. It’s a lesson I learned the hard way – to know where my time is best being spent and how to help people help themselves rather than use me as a boxing bag. That might be an adjustment depending on what experience you have, but as the team grows, it’s a good adjustment.
A personal principle I’ve set during my 1-1s with our CEO is that my role is not to solve problems, but to help people solve their own problems. I’m sure there’s plenty of stuff in coaching books about this. I still struggle with this transition a little bit, mostly because I get impatient, but sometimes intervening is a fix only for today and adds little value to tomorrow.
My role is not to solve problems, but to help people solve their own problems
At FundApps, we’ve adopted a business partnership approach. The People Ops team play the role of ‘guide by the side’. It means sometimes letting people fail and helping them to learn from that. It means pushing back on those who are wanting to offload their problems on to you, and instead helping them to work through it themselves instead. It sometimes even means supporting those who are considering leaving the company to do so, because it is genuinely in their best interests.
11. Find a common language
Putting a common language around some of the important stuff helps you work through conflict, focus on culture and build alignment to goals.
When you double (or more) in size, communication becomes just that little bit harder. It takes a bit longer for messages to sink in. It might take several attempts to communicate. You might have to adjust mediums or invest in new mediums to find ways to best connect with a growing team. That’s where a common language is helpful to bridge communication gaps and the conflict that naturally emerges. We found value in three forms of common language across FundApps:
- Values – We have values documented, built into recruitment steps and performance feedback processes, and talked about regularly, and I still don’t feel they are embedded to the extent they need to be. Perhaps I need to re-read Lesson #5 again. Our values represent two critical elements of our business as we scale that will have a profound impact on the company we become: (a) Our culture and (b) How we measure performance. They have the power to drive common behaviours across teams and ensure you’re attracting people who are going to naturally excel in the company. They also help to prevent brilliant jerk syndrome.
- Preferences & Styles – We introduced Insights Discovery to use colour energies to put a simple language around some of the challenges we faced working and communicating with each other. Instead of being frustrated that someone wasn’t on board for a project we were experimenting with, we could instead become curious as to how their cool blue energy might be at play with a need for more concrete details and data behind the decision, and start a conversation around that. Every single FundApper goes through Insights and the colours have become a language in which we can observe and discuss behaviours in a safer space than we could in the past.
- Company ambitions – I mentioned earlier we had two unsuccessful attempts at introducing the OKR methodology into FundApps. Despite us not being able to make the methodology sticky enough, it taught us something really important – the value in everyone knowing about what the company is trying to achieve. At the end of 2018 you could ask any FundApper what our company objectives were for the year, or how we were tracking against them, or why we were focused on those specific objectives, and they knew the answer. From new revenue goals and achieving 100% client renewal, to scalability actions and becoming a certified B Corporation. It became a shared understanding of what we were trying to achieve and how we were going, which was invaluable when it came to considering why our hiring plans looked the way they did, or why we were prioritising product enhancements the way we were.
12. Start with Inclusion. Then Diversity.
Doing it the other way around is a recipe for a revolving door of good people
At FundApps we are a team of almost 70 people, from 28 nationalities (and as many languages), about 25% female representation and 25% LGBTI+ representation. But that didn’t come from deliberately ‘hiring diversity’. That’s a short-term tick box approach to a complex, embedded problem.
The value of diversity comes from diversity of thought. I mentioned this in Part 1 – it’s critical to a small company looking to innovate or disrupt a market. In my experience, what we call ‘diversity’ now in terms of demographic diversity is simply a proxy for embedding more diversity of thought and reducing the inequities that have prevented this from being accessible in the past.
Here’s the thing. Diversity without inclusion is just setting the business up to become a revolving door of good people.
Focus on inclusion first. Start with inclusive leadership. Call out behaviours and actions that don’t promote inclusion. Observe team meetings, communication, how decisions are made, who is involved. There’s no sugar-coating this… It’s hard and all sorts of uncomfortable. I’ve found a happy ground somewhere between ‘not trying to make friends’ and ‘not approaching things with a stick’, which is to use an SBI model of feedback (we use this in our leadership training also) to help encourage people to understand why behaviour might not be inclusive, and how that impacts the business and those around them. Then encourage people to try an alternative behaviour. Most people are willing to do this, even if it takes a few goes. If they aren’t, move them on.
Next, visit your own backyard. HR policies, gender pay gap, career development, bias in recruitment process, promotion decisions etc. All of these are carriers of non-inclusive behaviours that need some love and care. If you’re ever unsure of something, ask people. It’s how we discovered we need to be better at helping develop skills, why our parental leave was accidentally promoting stereotypes, and in what forums we needed to be more inclusive.
We aren’t perfect at this at FundApps. It’s a slow burn. But we’re committed to doing something about it and committed to doing it right, which means more to people than the last D&I award the company picked up.
13. Water your plants
Otherwise they die (aka leave). Or even worst, they stay and become toxic.
“We don’t really do much by way of training and development because we’re a start-up”. Yawn. We’ve all heard it. I’ve even said it a few times. The excuse wears thin quickly and no one in the company actually believes it except for HR 🤣
One of the most valuable initiatives we implemented early was a generous learning budget, with no approvals, for people to put towards anything related to their professional development. Coding, languages, project management, people leadership… whatever! It can be really difficult looking at career progression formally within a very small company but there’s no reason to not promote development from a knowledge and skills perspective. It might be learning sessions, continued studies, mentoring and coaching, new projects to sink one’s teeth into. Learning starts with curiosity!
We’ve also introduced a peer / 360 feedback process for all FundAppers. Every single FundApper goes through this annually and we’re working through the teams now sequentially to avoid survey fatigue. We use 4 questions and open-text comments only, administered anonymously so we get the juicy stuff too!
- What should I start doing?
- What should I stop doing?
- What should I continue doing?
- Examples of how I live the FundApps’ values
Our next goal is to provide more visibility around the types of roles and experiences that exist now at FundApps, and those that will exist as we continue growing, to better support our career development conversations.
14. “I don’t know”
Suck up your pride and get comfortable with ‘I don’t know’
I’ve had to embrace this, and it still doesn’t come naturally. I feel pretty shit when someone asks me what we should do and I haven’t got a clue. Until I realised that in most start-up environments no-one really knows what they’re doing. We’re just making it up as we go, adding a pinch of judgement and a sprinkle of good intentions and hoping for the best. It’s part of the fun and the journey, so let’s stop pretending we have all of the answers.
I, like many, found my own pride stood in the way of speaking the truth. Sometimes, that truth is that I have no idea how to solve a tricky people issue or I don’t know if a specific initiative is going to solve a problem. If anything, saying ‘I don’t know’ opens up a great collaboration opportunity 😉
15. The HR trinity: Who, How, Where?
Answering three questions for your people solves 90% of stuff.
I stole this from someone a lot smarter than me a long time ago but it’s sticky and it works. Assuming the hygiene factors are up to scratch, I’ve found 90% of day-to-day ‘people stuff’ can be solved by helping people answer three questions:
- What am I doing?
- How am I going?
- Where am I going?
I’m sure a Simon Sinek fan will want to add ‘Why?’ to this list. That is a given. If ‘Why?’ isn’t answered, don’t bother with the three questions above 😉
I’ve used this with a few FundApps people leaders to help add some structure to 1-1s and it works because it’s simple and effective. People need to have clear expectations (What), in-the-moment meaningful feedback (How), and at least a rough guide on where they are going / what they are working towards (Where).
One more thing… That sounds very Steve Jobs, doesn’t it?!
I know I said this was a list of 15 lessons we’ve had to learn, but I’ve added #16 for two reasons:
- We forget to do it, or tell ourselves we don’t need to;
- Personally, it’s the hardest HR lesson that I’m still learning!
16. Find your outlet
you deal with enough of other people’s shit, it’s important to find an outlet for your own.
A bit of self love goes a long way, especially in HR. You will be part of difficult conversations that make you feel sick, upset or guilty. You will see the best and the worst of people. People will be angry at you because of your role and not because of who you are. You’ll doubt yourself over and over. You’ll be expected to carry an emotional load of stuff that very few people in the company can see, and if you’re alone or in a small team the support network can be sparse.
All of this has a profound impact on our mental health. The very fact it impacts us simply makes us what we are: human. A mentor once shares a pearl of wisdom with me that I still believe in: If the difficult conversations don’t have an impact on you, you’re not the right person to have them.
So find an outlet, for both your physical and emotional health. I’ve found solace in walking, have a couple of mentors I lean on, and have used mental health coaching and EAP services to talk through things. Find what works for you and give yourself some love.