Poking through 13+ years of posts I find information that’s as useful now as when it was written.
Golden Oldies is a collection of the most relevant and timeless posts during that time.
I read a couple of articles last week highlighting two mind-blowing new products. Tomorrow you’ll learn about one that addresses wildfire prevention in a totally new way. The other (Wednesday) is a way to recycle roads, instead of repaving them, using plastic bottles.
It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.
Golden Oldies are a collection of what I consider some of the best posts during that time.
The interest in some subjects is eternal — like avoiding bureaucracy. This post dates to 2006 (before I added pictures) and the subject is still a hot topic.
Too many bosses and founders confuse organizing business segments with becoming bureaucratic and everyone hates bureaucracy.
In reality, not organizing and developing a process to accomplish each function facilitates a wild west mentality, which usually results in a bullet in the foot or worse.
People sometimes confuse process and bureaucracy. Process is good—it helps to get things done smoothly and efficiently; bureaucracy is bad—it’s process calcified, convoluted, politically corrupted, or just plain unnecessary.
Good process is an easy-to-use and flexible method of accomplishing various business functions. It is informal without being haphazard, and neither ambiguous or confusing.
Occasional surveys (internally asking staff and externally asking vendors and customers how things are working) alert you to when processes start to mutate.
By creating a skeletal process and a corresponding graphic in areas where it is needed (financial controls, hiring, purchasing, etc.), you lay the framework for your growth in the future, no matter how hectic.
Bureaucracy may stem from a manager, whether CEO or first level supervisor, who believes that his staff is so incompetent that it is necessary for him to spell out exactly how every individual action needs to be done. To correct this, the manager responsible must
reduce his own insecurity,
increase his belief in his current staff, or
hire people he thinks are smart!
Bureaucracy is often fed by people’s fear of change, “We’ve always done it like that.” and similar comments are dead giveaways.
Another significant factor that contributes to unnecessary bureaucracy is the failure to align responsibility and authority.
If a person has the responsibility to get something done (design a product, create a Human Resources department, meet a sales quota), she should have enough authority (spend money, hire people, negotiate with outside vendors) to get the job done.
Giving people responsibility without concomitant authority forces them to constantly ask their superiors for permission, thus reducing productivity, and lowering moral.
The final, and most important difference between process and bureaucracy is that people like working for companies with good process in place, and hate working for those mired in bureaucracy, but not for long—they leave—making bureaucracy-eradication a major tool in the retention game.
It’s pretty well accepted these days that culture eats strategy in terms of moving a company forward.
It’s also a given that you need to take time to consciously build your culture, whether for company, group or team, since culture will happen regardless.
However, your cultural structure won’t stand long without some very pragmatic infrastructure.
In other words, culture needs to have teeth.
If you’re counting on an honor system where nothing happens to those who violate the culture then, over time, it will erode.
Not because you hire “bad” people, but because you hire humans and humans often tend to do what is convenient, instead of what they should do.
They also tend to follow a “monkey see/monkey do” pattern, so if a new hire sees an old hand cut a tiny corner here and skirt a little something there and nothing happens, then expect her to think it’s OK.
Teeth aren’t about bureaucracy they’re about the obvious repercussions that happen when the culture is violated.
They aren’t sneaky or hidden; they don’t demean or embarrass.
Above all, teeth don’t bite selectively; they apply equally to everybody—which is why they work.
Their purpose is to strengthen your culture, not undermine it — which is what happens the moment someone becomes exempt.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
Are you one of the many founders who revel in a so-called startup culture that eschews structure and ignorantly confuse process with bureaucracy?
If so, you aren’t doing your company, your people, your investors or yourself any favors.
In a 2012 post I quoted Paul Graham, co-founder of Y Combinator, regarding the need for financial controls and frugality during good times in order to survive the bad ones.
The number of leaders, investors, academics and others who have recognized the impact culture has on success is as diverse as it is numerous — ‘culture eats strategy for lunch’ didn’t become a catchphrase by accident.
“The single largest issue that causes the most emotional heartache in a startup is people challenges. Every organization has them. If you put best HR practices into place in the earliest days and are doing the right things right, you’ll have fewer and fewer issues and blowups.”
If you want to build a successful company you need a solid base that includes a consciously designed culture based on your values, financial controls/accountability that engender frugality and best HR practices that enhance growth, while protecting the company.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
One of the hardest things that founders/startups face is the need to grow up and stop shooting from the hip.
I hear the reasons not to all the time
It will ruin our culture.
It stifles creativity.
It’s for larger companies.
It’s bureaucratic.
It’s too time consuming.
“It” refers to the underpinnings of all successful companies. “It” includes the following, or variations thereof, in order of importance:
Financial controls that include, but are not limited to
monthly statements of revenues by product;
discounts;
costs by department;
cost of customer acquisition;
stock issuance;
cash flow;
hiring by department
Hiring process
Annual operating plan covering the above financial measures
Organization charts and definitions of responsibilities
Long-term planning
Centralized information technology implementation and planning
Whether it’s just you, or one, ten, fifty, or more employees, whether full time, part time or virtual, you need viable processes to keep you focused—think of it as coloring inside the lines.
Everything on this list can, and should, be tailored to your business model, but financial controls of one sort or another and a good hiring process are necessary to any business.
Sure, they can’t all be implemented at once, but none of them will happen as long as your MAP rejects or begrudges them—after all, you’re the founder and people will follow your lead.
Last Friday I shared my response to a founder who was having difficulties closing desirable candidates and touched on the need for a good hiring process; here is the information needed to create one for you company.
Key points to remember,
process is good;
bureaucracy is bad;
authentic, transparent communications are the basis of good process
While a good hiring process is necessary, it is often one of the first to ossify into bureaucracy.
A good hiring process is
transparent and painless for the candidate, and
simple, easy to use and painless for the hiring manager.
But why a process? Why take the chance on creating something that so often turns into a bureaucratic nightmare? Why not just grab ‘em when you find ‘em?
Because you need a repeatable procedure that allows for the orderly acquisition of people, so the company can plan for and support its growth and, more importantly, land the candidates you want.
A good hiring process removes chaos and allows speed in staffing.
The best hiring process is flexible and, although based on a set of fixed principles, constantly re-invents itself based on changes in the real world.
Speed is the key.
Without question speed is the most effective, least expensive of all hiring practices.
This means there must be speed at all points of the process—any delays should originate only from the candidate.
Speed is key because people tend to judge what it will be like to work for a company/manager by how they are hired.
If the process is fast, smooth, and enjoyable, they will assume that decisions are made speedily, the company has little bureaucracy, and that working there will be fun—and they are usually right.
And vice versa.
Here are the basics of a good hiring process:
The company’s operating plan and budget are the basis of the staffing plan.
Know exactly what the job entails, what authority it has, and how it interacts with the team and outside departments, customers, vendors, etc.
Based on number two, write a complete req and hire the first person who meets its minimum requirements (see Req or Wreck in the right frame).
Be flexible and creative when sourcing.
Involve your people.
Interviews should be as culturally-relevant as they are work-relevant.
Always sell the meat (projects, growth opportunities, chance to contribute and make a difference) as opposed to focusing on dessert (perks, money)
Do’s:
Do create a positive experience for both the hire-ees and hire-ers.
Do use multiple interviewers—they are harder to con
Do have a well-understood set of components including: media spending, recruiter use, relocation, sourcing, resume evaluation, scheduling, interviewing, negotiating, cutting and extending offers, closing candidates, deflecting counter offers, and pre-start actions in your hiring process as well as a flexible way to deal with each.
Do make sure that sourcing and headhunter policies reflect both company needs and the current labor market.
Don’ts:
Don’t “figure out” what you need by interviewing multiple candidates.
Don’t keep interviewing candidates in the hopes of finding one who embodies your entire wish list.
Don’t assume using a headhunter will automatically reduce your time and work.
Don’t have a start and stop hiring process—whether from whimsy or human bottlenecks.
Don’t buy people; those who join only for the money/perks/stock will leave for more money/perks/stock.
When all is said and done, the true purpose of a hiring process is to help the company compete for talent, which, in turn, allows the company to compete for customers.
I was reminded of it by a phone call from “Kev” asking for assistance because they were having trouble hiring.
He said they had no trouble attracting excellent candidates who seemed excited about the product and work, but they couldn’t seem to close them.
I asked two questions,
How would you describe your company’s culture and its core values?
What is your hiring process?
Kev described the culture in terms of working hard, a really fun atmosphere (foosball table, bubble machine, Friday beer bust, etc.) an “awesome product” and “incredible people.”
He said whoever was available sat in on the interview along with him and everyone had a say in whether an offer was made. They didn’t have a formal process, because they were a startup, but planned to put something in place when they started to scale.
Moreover, processes created outside or in ignorance of existing culture won’t work. It’s that simple.
That’s because the culture is anchored by and tied to the founder’s values and MAP.
For example, startups/high growth companies are often hotbeds of raging egos. If the culture is tolerant of that then the level of open communications that form the basis of great culture leading to good process is impossible.
Further, process created without a solid cultural basis will quickly turn to bureaucracy — which will slow growth while accelerating turnover.
Ben Bradshaw, a former BBC correspondent and now a Labour member of Parliament, said the 2004 scandal, touched off by reporting about British intelligence on Iraqi weapons of mass destruction, had created a system based on “fear and anxiety.” The BBC, he added, became “even more bureaucratic and had even more layers, which exacerbated the problem of buck passing and no one being able to take a decision.”
Of my many posts that delve into bureaucracy, I think the most important is Process vs. Bureaucracy—two things that are frequently confused.
As I say in that post, bureaucracy is “process calcified, convoluted, politically corrupted, or just plain unnecessary.”
All of which occurred at the BBC.
Or, as Tim Luckhurst, a journalism professor at the University of Kent who worked at the BBC for 10 years,
“They wanted systems that could take responsibility instead of people.”
But there are no systems, software or bureaucracy at any level that can take the place people skilled in handling wetware.
Nor is there any business, from Fortune 50 to micropreneur, or organization that can function without it.
So whether you manage yourself or a cast of thousands you need to embrace process and jettison bureaucracy.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
“The startups that really get hosed are going to be the ones that have easy money built into the structure of their company: the ones that raise a lot on easy terms, and are then led thereby to spend a lot, and to pay little attention to profitability. That kind of startup gets destroyed when markets tighten up. So don’t be that startup. If you’ve raised a lot, don’t spend it; not merely for the obvious reason that you’ll run out faster, but because it will turn you into the wrong sort of company to thrive in bad times.” — Paul Graham, co-founder, Y Combinator
Graham’s comment is from an email he sent to his portfolio companies in response to the Facebook IPO fiasco.
While everything he says is true, the spending standards he recommends were just as important before Facebook’s IPO as they are now.
One of the great attractions of startups has always been the lack of bureaucracy.
However, when founders jettison financial controls in the name of eliminating bureaucracy the only thing they accomplish is to show off their own ignorance.
Would you even consider designing a product from start to finish without detailed specification? Or design reviews? Or market feedback? Or testing?
No?
Then why would you consider running your company without viable fiscal controls?
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
It’s pretty well accepted these days that 
Are you one of the many founders who revel in a so-called startup culture that eschews structure and ignorantly 
Are you following events at the BBC?
