Startups need a coherent human resource management policy to ensure their success, and to scale up while dealing with challenges. What should one keep in mind when setting a scale-up strategy for a startup, especially with reference to their HR practices?
Their strategy needs to focus on the following:
They can adopt a reliable Performance Management System to avoid making some of the common mistakes, as below:
We keep hearing the stories of how startups were literally started in basements, car garages and meetings around a dining table. But then, even the tallest tree in the forest must have taken roots as a seedling at some point. Every startup needs to keep this in mind and lay the foundation for a time when they will have to start scaling up. Without such groundwork, chances are that their growth will not sustain itself.
The environment of a startup is defined by high energy and an accelerated need for growth and development. Entrepreneurs who want their business to scale make realistic growth plans and set targets and goals that can be achieved through concrete action plans. The management of a startup needs to remember that their employees form the core of their organization and needs to put processes in place to engage them and win their loyalty to the organization. This is essential to building the required culture of high productivity and performance necessary to ensure the success of the startup. The odds against the success of a startup are really high. Startups need strategic thinking and goal setting along with motivation and belief in their business model to stay on the path to success.
What should one keep in mind when setting a scale up strategy for a startup, especially with reference to their HR practices?
Startups need to take a solution-based approach to resolve the challenges they face while managing their human resources. Typically, they tend to focus on getting the work done and not on who is getting it done. They avoid bureaucracy and adopt an agile work culture, which by definition, is a very different kind of work culture when compared to an established organization. So, when they scale up it becomes a challenge to inculcate a work new culture which might lead to high attrition and lesser employee engagement.
However, by adopting a Performance Management System, startups can streamline their processes and avoid some of these common problems many of them tend to face, as listed below:
The lack of processes in a startup could easily extend to a fast-growing startup which is more focused on firefighting and meeting short term targets. However, for a startup, it is critically important to align organizational goals with employee performance. That ensures continuous high performance by bringing clarity on what the employees need to focus on.
By not having a feedback mechanism and failing to provide timely feedback to employees, startups fail to ensure timely interventions, if needed, lose out on the desired productivity and the inputs for employee growth. Employees would also end up getting disengaged when they are given no inputs on their performance.
Most startup managers are focused more on core business management issues, driven by business numbers. But organizational culture does not automatically get formed and accepted. It needs to be planned using policies and decisions which are intentionally formulated. Employees who align with them should be suitably recognized and rewarded. Startups cannot attribute their inability to communicate a cohesive culture to lack of time.
Most startups grow and expand in dynamic ways, leaving little time for planned upskilling of employees. They may also think of it as an unnecessary expense. However, they may also miss the fact that a lack of opportunity for career growth and development could adversely impact employee engagement and result in attrition, impacting the growth of the organization itself.
Startups can resolve such issues and manage their personnel better through continuous performance feedback by adopting a performance management framework. The right tool helps organizations engage their employees using practices that can be institutionalized and implemented on an ongoing basis. A modern PMS can also help establish an organizational culture that aligns well with their goal setting and the founders’ vision of the organization they wish to build. As employees grow into their roles with the startup, PMS would help identify the competencies needed to deliver on the tasks assigned, assess employees for those competencies, and align development plans.
Planning is essential to achieve growth and creating a sense of focus and prioritizing one’s goals is important to ensure the growth of a startup. To enable a smooth transition from a startup into a scale-up, we need the right systems in place along with the right people,. An example is adopting a Performance Management System, to manage employee performance which is a critical business process. Such a system helps to develop the performance culture of the organization and helps the startup to define its culture from the beginning.