The most common scaling mistake

Photo by Bekir Dönmez on Unsplash

This article started as a Twitter thread about the common mis-steps I see at scaling companies. Given my background, these tend to focus on org strategy though sometimes they might include business strategy. While they aren’t in any particular order, there’s one mis-step most scaling startups make.

Waiting too long to hire folks with experience in People processes and organizational strategy.

It’s so common and easy to overlook as you just try to get the darn company into momentum. Anil Dash, CEO of Glitch so eloquently shared in his yearly update about the impact of this mis-step.

“Under-investing in HR and people infrastructure while a startup goes through a big period of growth is one of the most common, and egregious, mistakes.” Anil Dash

Part of the reason we don’t hire soon or experienced enough in this area is that we’ve come to associate HR with practical tasks like payroll, benefits and legal compliance which seem pretty straight forward, and don’t require specific expertise. There’s also a belief that HR folks only focus on protecting the company from legal liability. Some are that way, but the best People professionals spend far more of their time focused on creating an environment and systems that help the people and company to grow than on legal compliance.

When it comes to your People team hire much earlier and more experienced than you expect.

While someone new to the field can learn how to administer benefits and payroll they don't have the skills or expertise to lead the strategy around things like creating culture, career development, conflict resolution, and the like. Business strategy comes first with organizational strategy following. This is how it should be. The problem is when org strategy lags too far behind, namely in People ops hiring. The lag is fine for a while but the cracks will begin to show, shaking the foundation of the company if left unattended for too long.

The company will struggle to carry out important parts of its vision like supporting remote work, having flatter org structures, salary transparency and other innovative org strategies. Unless the CEO or COO has significant People experience and have time to guide them, hiring someone with zero or little HR experience is unfair to them and your team. This is one area where folks commonly under-invest but shouldn't.

Your People folks focus on the people side of your company. This involves both strategy and tactics. A person new to the field can get up to speed on the tactics pretty quickly but organizational strategy from a People perspective requires experience, skills and expertise. The organizational side of the business can either be a hindrance or an incredible multiplier when a company really begins to grow.

For instance, an experienced People professional can help you develop a hiring strategy and system that reflects the culture, the company values and allows you to scale. Many startups do well with hiring in the beginning when the team can fit around a couple of tables but struggle when they reach 30 or more. The informal systems they relied on stop working slowing down hiring or resulting in mis-hires. Your experienced HR person can create a solid recruiting system that helps the team codify what’s most important, streamlines the hiring process, reduces bias in hiring and decrease new hire churn to nearly zero.

An experienced People Operations professional can help the business scale in other ways like supporting the development of your leader, scaling the culture, culture, creating career development tools and processes, conflict resolution, designing Code of Conducts and conflict policies and much more. Your People team can help you scale by taking care of the organizational side of the business so the team can focus on building the product, getting product market fit and providing excellent support to customers.

One of the best investments you can make is to add a bit more to your salary budget to hire an experienced People professional. You probably don't want to hire a former CHRO from a big company — they'll be too expensive and will likely be more accustomed to delegating rather than doing. That said, there are plenty of experienced manager and director level folks who are competent and looking for more autonomy and an opportunity to grow like a startup can provide.

More than one startup has jeopardized its future by not investing in experienced People Operations soon enough. Don’t be one of them.