The mythic king Sisyphus was not the prototype for a modern executive. He was cruel and deceitful, for which he paid a big price—condemned in the afterlife to roll a boulder up a big hill only to have it continually roll back on him. Sound like the challenge of building a great team in a startup? Perhaps, but it’s easier if you have a sense of the hill and how to approach it.
In organizational parlance, this means being clear about the type of people you’re looking for, the challenges you’ll face in attracting them and the infrastructure you’ll require.
Startups need employees who are built differently. They value creativity over process and structure (“stifling”). They thrive on the challenge of doing something new and are less phased by ambiguity, or the lack of a roadmap. Work for them can be more of a means of personal expression, rather than association with a winning brand.
By contrast, as an organization matures, it looks for people with deeper vertical skills, narrower experience and perhaps strange titles (“Data Anthropologist” anyone?). It needs team members who, although still flexible and creative, need to be able to ship product that will stand the light of day. A more mature company also is more confident around the ability to identify, hire and make good use of “young athlete” types who are short on relevant experience, but long on smarts and drive. The more mature company can get such types off to the right start with solid training programs and supervision.
The Shifting Challenge Landscape
A startup’s most profound challenge in attracting top prospects is the lack of an employment brand. One weak prospective remedy is overreliance on personal referrals, which in a small company can be both insufficient, and absent a deep-seated culture of excellence, promotes cronyism. (The best route: aggressive outreach to passive candidates by recruiters with a finely honed message.)
Inside the startup, hiring managers are less secure in their understanding of what they’re looking for. This means more candidates are needed to fill a given position. All interviewers, including managers, are less confident and more subjective, relying on factors that are superficial and not predictive of success (“I liked him”; “she’s smart”). As a result, the churn rate of people who don’t work out tends to be higher.
Proper workforce planning in less mature organizations ranges from problematic to non-existent. Managers and recruiters are not sure which jobs to fill, how long it will take, and which ones, crucial to success, to fill first.
As the organization matures, its hiring brand is hopefully more prominent and better defined. Recruiters and managers are more concrete--they talk with authority not only about the company’s business, but its culture. That culture in a well-run company is less aspirational and more tangible, as the culture gap narrows between the company founders intended to build, and that which it’s becoming.
Hiring panel teamwork in maturing companies improves, as all participants find the hiring process more efficient. CEO’s and other senior managers act more as closers than deciders.
These two factors—a stronger hiring brand and hiring process- mean the company becomes less reliant on passive candidates and gets better responses to outreach. Internal referrals are more robust as people feel more positive about attractiveness of company as place to work and its prospects for survival.
But it’s not all positive. Recruiting challenges shift in more mature companies. Pay parity becomes a big issue, driven either by a lack of compensation discipline or the dynamics of a changing market (or both). Also, the business is likely more reliant on highly strategic positions so workforce and succession planning is a much bigger deal.
Infrastructure- Getting Beyond Sisyphus
Hitting that inflection point where the team building boulder rolls on its own is really about two related factors: building the infrastructure and developing the metrics machine. There are the obvious and well recognized infrastructure “to do’s”: train astute groups of employees in conducting behavioral interviews, write clear, actionable (i.e. decidable) job definitions, drill recruiters and interview panel members in their craft, including describing the (same) company in a truthful but upbeat way. And of course, hire great recruiters who resonate with the company’s culture and mission.
But the main factor, less common as it’s almost absurd in process-lite small startups, is the need to build informational infrastructure from “day one”. What does this consist of?
- Consistent candidate rating systems
- An applicant tracking system capable of meaningful reports
- Automated core competency tests (e.g. coding test for coders)
Most companies have artifacts such as these. But fewer develop their hiring metrics at a sufficiently early stage- metrics that are crucial to measuring hiring process effectiveness, producing sound forecasts, right sizing the recruiting team or identifying process problems. These include key department by department metrics: onsite interviews as a percent of phone screens, offers as a percent of on sites, offer acceptance rates, passive to active candidates and outreach response rates.
Even fewer young companies have the key piece of organizational architecture necessary once hiring takes off: a tiering system which groups employees by functional departments, establishes tiers within them and definition of those tiers (e.g. what are the key competencies distinctions between a senior manager vs. a director?). The tiering system then acts as a guideline for the various forms of compensation. Having this kind of system minimizes issues of internal equity, injects clarity into issues of title and provides employees with a ladder for career advancement.
In short, team development for a young company is an uphill job, but hardly a daunting one.
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Martin Kupferman began hiring talent for Quantcast in January 2008 when the company had just twenty employees. It now has almost four hundred. He is now responsible for the company’s organization planning and development, candidate sourcing, hiring, and the development of HR policies aimed at talent retention. Kupferman was the CEO & co-founder of Pasqua Coffee Company, which was acquired by Starbucks in 2000 as a 500-employee, 60-unit, multi-city organization. He was also a management consultant for Coopers & Lybrand.