[Editorial Notes : Guest article by Tapan Rayaguru, who earlier was Sr. VP at MuSigma. In this piece, Tapan shares a much needed perspective on managing team/taking tough decisions as a startup grows.]
If you were not a born entrepreneur and had the fortune (!) of working for someone else first, the transition to an employer could be non-trivial.
A successful startup does not necessarily scale well. A successful high scale organization does not necessarily stay successful forever. The choice of employees you have made at each stage probably has a very high degree of contribution on the continued success.
In the startup phase (you and 3 other dudes in the proverbial garage)
- So you do everything… legal mumbo jumbo in incorporating the company, getting across regulatory issues, what color to paint your office walls, logo design, the whole 9 yards…
- The three other dudes don’t really see you as the boss and will relish a fight if they don’t like something you say… you welcome the fight equally vigorously…
- There is no employer and there is no employee.
Bliss. Happy Days!
In the scale up phase (when your next employee comes from a pool of folks that applied for a job to your firm or through some reference)… Life starts to get more complicated
- In an interview, you try to explain your ‘vision’ and the eyes are rolling on the other side waiting to be told about ‘the role’ and ‘the pay’ and ‘the growth possibilities’ and ‘the share in the booty’
- Every day, people will do what they are told to do. Some will do slightly more but not as proactively as you would have liked them to.
Now we have employees and you are the employer!
- End of the month : Salary time. Forget getting paid, you got to pay and on-time. So what your finances are shaky, the ‘employees’ need and deserve to get paid.
- Retention : A combination of ‘showing the vision’ and ‘what’s in it for you’ should work but the balance will keep shifting depending on who it is and what stage of your scaling up you are
- Letting go : When you are trying to scale a business you can’t really afford deadweight around and when you want to let go a non-performer, it is quite an emotional story with multiple revisits to the decision, alternate role tries and drama.
Get ready with tissue boxes and family packs of ice cream!
In the success phase
- You get resumes with prominent IIs in them and Ivy League B Schools. You get more advice during the interview than you ever got from your spouse or parent – claims of having run businesses many times the size of your business will be plenty. When it comes to discussion on salary they will want your entire payroll budget and then some more.
- Once you have them onboard you will spend more time designing and aligning KPIs to overall vision than really focusing on the vision as the incentives direct so goes the herd.
The panacea really is to hire a bunch that can live through each phase of the organization and morph to fit in with the needs at each stage. Like all panacea, they don’t exist, so get ready to have some very emotional farewells.
[About the Author(s): This article, part of “The Science of Entrepreneurship” series has been written by Tapan Rayaguru, Executive Director, Career coaching at Sunstone Business school. Sunstone Business School is part of NextBigWhatSelect, a curated set of regular contributors to NextBigWhat.
Sunstone provides a one year part-time online PGPM program for mid-career Technology professionals, helping them transition to entrepreneurial & business roles. Click here to know more about Sunstone’s PGPM program. Contact id: firstname.lastname@example.org]