Skip to Content

The One Thing Every Startup Should Be More Cautious About

Creative businessman using laptop in officeCreative businessman using laptop in office

The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What are some tips for maintaining a successful startup?” is written by Aanand Varanasi, partner at Calibre One.

Unquestionably, people are the most critical factor in a company’s success. Even with today’s advanced technology resources, the right workforce is crucial to execute your business strategy and drive growth. While no one can definitively predict the success of an employee, there are some ways you can optimize your hiring practices.

While specific pedigrees and skill sets are certainly important, it’s imperative to go deeper and define specific attributes. Look beyond simply thinking that your new hire needs to fit with your culture. Identify the specific values, attitudes, and character strengths that are important to take your company to the next level. You can train an employee on your product or market, but you can’t teach specific personality traits.

When posting job descriptions, avoid vague or overused terms like “open communicator” or “action oriented.” Look for specific, honest, and meaningful qualities that can be empirical, pronounced, and easily communicated. For example:

  • Mission-driven, not task-oriented
  • Prioritizes company/team over personal gain
  • Leads with humility

 

See also: 8 Ways to Avoid a Messy Startup Disaster

Once these key attributes have been clearly defined, they should become the guidelines for all hiring decisions and embedded in all you do. Hire by them. Fire by them. Promote by them. Recognize your people by them. Consistency is the key.

Overcoming growing pains
In a startup environment, communication and knowledge are tribal. By nature, startups are nimble, fast-paced, and support a high level of creativity. The founders have the opportunity to hand pick each hire. But as the business grows, the founders must begin to delegate hiring decisions, and it can be very difficult to keep everyone on the right path.

A critical part in every company’s evolution is the addition of middle management. In fact, I believe that this can be the hardest layer to hire—and one of the most important. Ultimately, these will be the people who control the rest of the company.

This is a time when clear and consistent communication becomes vital. It is essential that everyone knows and understands the “core attributes.” Only then can people truly be empowered with higher degrees of autonomy and accountability.

Once a company grows beyond 50 people, a more formal communication program needs to be implemented with all-hands meetings, videoconferences, and new hire orientations. It’s important to keep these interactive to encourage feedback and participation. One of the most unique and effective programs that I attended featured company founders and employees sharing real examples in an informal storytelling format.

 

It is also important to re-evaluate your “attributes” and view it as an iterative process. Ensure you have the levers in place to modify them as your company enters different phases.

Motivating and retaining your best
As I mentioned earlier, you should be prepared to hire to your attributes and also fire to them. A key part of retaining your best is the willingness to get rid of those bringing down the company. On the other side of the coin, be prepared to recognize your key contributors.

Many traditional performance management systems are outdated. Startups should be cautious about introducing a formal review process too soon. Instead, focus on creating more flexible and spontaneous rewards, such as spot bonuses or peer-to-peer recognition. This more collaborative approach can instill a sense of team spirit and promote transparency. There is also great value in giving people something that they don’t expect. Just ensure that any recognition ties back to your pre-defined core attributes.

Also, be careful not to fall into the “golden handcuff” trap. Author Daniel Pink takes a comprehensive and unique look at motivation in his book, Drive, and concludes that “the more prominent salary, perks, and benefits are in someone’s work life, the more they can inhibit creativity and unravel performance…Effective organizations compensate people in amounts and in ways that allow individuals to mostly forget about compensation and instead focus on the work itself.”

Hiring great people and keeping them engaged and motivated throughout the evolution of a company is undeniably challenging. However, defining your key attributes and consistently embedding them into your HR management process can significantly improve your chance for creating and maintaining a balanced and productive workforce.