As companies grow from start-ups to scale-ups, a wave of change is felt throughout the organization. At this transitional point, you most likely have aggressive revenue targets. This means you’re working diligently to acquire more leads, close more deals, evolve your product, and offer a great experience for your new clients.
Growing your team, beyond the start-up founders and early employees, is key to meeting your business goals. It involves hiring marketers to generate leads, account executives to drive sales, product managers to improve the product, and customer success managers to support your customers.
Adding these new team members, which may increase your employee count from 15 to 30 in just a few short months, can be a challenge for any organization. How do you continue to enable all employees while maintaining the culture and vision of the company?
In this article, I share how companies can successfully support all employees as they transition from start-up to scale-up.
Defining the Start-Up from a Human Capital Perspective:
Start-up companies typically consist of 10 to 20 early employees. This group of people may have similar skill sets, and everyone on the team is actively driving toward one shared goal while wearing many hats.
At this stage, it is common for your team to have unconscious bias when making new hire decisions. Everyone holds unconscious beliefs about various social identity groups; these biases stem from one’s tendency to organize social worlds by categorizing. This means executives and founders may be in a pattern of hiring people who have parallel skill sets or professional backgrounds. Start-ups are scrappy. The core team is committed and used to “doing whatever it takes” to accomplish the shared mission. Most start-up employees are considered generalists rather than specialists.[.1]
Defining the Scale-Up from a Human Capital Perspective:
Transitioning from start-up to scale-up looks like increasing your staff from around 10 to 20 employees to 30 to 50 employees over the course of a few months. At this stage, your hiring decisions revolve around your business goals. You may be bringing in folks to manage the back office and adding in roles across business development, sales, marketing, and customer success[.2] .
Your organization may start to build distinct swimlanes and remove responsibilities that overlap. This could mean some folks need to let go of certain responsibilities and trust that leadership is hiring the best talent to run their respective roles and responsibilities. This isn’t always easy, and it requires role clarity.
The roles you hire for are more specialized at this point. To attract the best candidates for these new specialized roles, your People Team needs to develop a repeatable infrastructure to hire candidates from diverse backgrounds and experiences. It’s important to diversify your workforce while maintaining an inclusive working environment.
Best Practices to Support Your Employees as You Scale Up:
(1) New Hire Processes
As a Chief People Officer, I recommend setting up a few key processes to ensure smooth hiring, onboarding, and continuous employee enablement. These processes include the following:
- Tight Interview Process – Create timelines, make sure your hiring managers know what they’re responsible for, and communicate with all parties regularly (including candidates).
- Bonus and Compensation Structures – Define what this looks like; share this with your employees from the start.
- Education and Training – Start-ups run so fast and so hard at the beginning that you may not consider how you onboard new hires. Think about onboarding education and ongoing training for all employees and how to educate your current team; inform them about why and how these changes may affect them.
- One-on-One Meetings – Formal or informal, creating a process for managers to continuously meet with employees is crucial.
- Performance Reviews – These can happen quarterly or bi-annually. Either cadence is sufficient, just make sure you are consistent; they should not be a surprise to your employees. Employees should have an understanding of how they are doing at all times through constant communication and feedback loops.
(2) Career Progression
As businesses scale up, some early employees may experience people getting hired in roles above them or more senior to them. Previously, these employees may have run a function independently and now have to navigate a new manager. To support these scenarios, People Organizations need to think about the following:
- Working with each functional leader to develop career paths.
- Setting up clear career progression plans.
- Defining clear metrics on how employees can get from A to B.
- Creating internal training and professional development opportunities.
(3) Build Out Management Competencies
Start-ups promote very good doers. As you scale up, your company needs to support folks in management roles by building in management competencies. This involves training them on how to manage other team members and how to progress beyond an individual contributor role. This does not happen overnight; it’s a commitment and an investment in your employees.
(4) Motivate and Incentivize Employees
- Offer equity options.
- Offer bonus and compensation plans and share the “why” behind those plans with the team. Communicate the market value.
- Offer consistent reinforcement behind the vision and explain how it all ties to the end game.
(5) Get Employee Feedback, and Do Something with It
As the Chief People Officer at Arturo, one of my first initiatives in my first three weeks was to have a 1:1 with everyone in the biz: What’s going well? Where are you being challenged? What do you expect from the people function?I then distilled everything down, looked at all the responses, and if 75% or more of the population acknowledged a concern, I addressed that with the team: We hear you. We appreciate the feedback. This is how we’re responding. Here’s the timeline of when we’ll address the concerns.Communicating this way helps manage expectations.Here are some other ideas for collecting feedback
- 30, 60, 90 Day Individual Plans – These individual plans align with the team goals. This helps leadership learn about any barriers. It also requires constant two-way communication with your employees to let them know what you’re doing with their feedback.
- Informal Check-Ins – These are outside of regularly planned 1:1s and can be especially helpful for new team members. Find out how new employees are feeling, and make sure they feel comfortable and supported.
- Set Up a Mentor Program – This is an opportunity for employees to meet cross-functionally in an inviting way that creates an environment for feedback. Getting this kind of feedback is why setting up mentors is really helpful. As Chief People Officer, I meet with the mentors at the 30-, 60-, and 90-day mark to intake their feedback.
- Surveys – Whenever there’s a company-wide change, send a survey to all employees to help you understand how the changes are impacting them.
- Create a Buddy System – Pair new hires with a colleague to help ensure everyone is up to speed and understands how the onboarding process is working.
(6) Leadership Training
As your company grows, the people you have in leadership roles may not be fully equipped to handle all the changes from new hires to new processes to new communication channels. Put simply, leadership training and education may look something like, “This isn’t how you’ve always done it.” Or, “The way you got here may not be the way to get you there.”From a leadership point of view, conducting business and managing your employees needs to shift because the size of the team is much larger. One big change is how companies communicate and distribute information. Clear training and guidelines from the top down will help keep communication clear and expectations in check.
The transitional phase of growing from start-up to scale-up is an exciting experience for any company; however, it can come with challenges. One tough thing to do is maintain the culture you originally set in the early days with just 10 employees. Adding just three people to a 20-person team can wildly change the dynamic of an organization. Success at this phase requires that you hit your business goals and support your employees. To find success, try out a few of the best practices I’ve provided. At Arturo, we are committed to enabling our team as we grow. If you’re interested in becoming a part of the awesomeness that we’re building, check out our open positions here.