Lessons from Deciens Community Circle: Scaling HR and Culture
Key takeaways for early-stage companies
Earlier this year, we launched a program to connect our portfolio companies to the vast resources of our community. This program – aptly named the Deciens Community Circle – creates a space for our portfolio company teams to access the wisdom of experienced founders and industry-leading subject matter experts.
At our latest session, we were honored to have Arthur Matuszewski as our guest speaker. Arthur is an operator and advisor supporting PE/VC funds and companies across strategy and people – figuring out what organizations need to scale and align capital and human capital resources to deliver against that. Prior, he led Wayfair and Better.com through hypergrowth, enabling organizational effectiveness across business operations, talent, and people.
Arthur joined our group of portfolio founders and executives to drop some knowledge bombs about a wide range of people organization topics.
Let’s dive into the key takeaways from his talk:
📈 Hire a human resources or people professional when your team reaches about 50 people.
The volume of HR work and specialization typically reaches critical mass when a company reaches about 50 employees. Before that point, a full-time HR person might not be necessary. Until then, startups often rely on advisors to help establish high-level policies with the leadership team. Contractors are brought in for more intensive time-bound projects like benefits administration, employee engagement activities, and compensation and performance planning.
💼 Hire your first recruiter when you’re hiring 12 people per year.
A rule of thumb for hiring a recruiter is to use contractors or agencies until you’re hiring around 12 people per year. If you think some of those will be senior hires, you’ll want to lean towards a more senior recruiter – the increased cost for them is more than justified by what you’d end up paying an agency for a senior hire. Executive searches are a whole different ball game, and you’ll likely hire these folks from your network or with an executive search firm.
We hope that these takeaways empower your own journeys to organizational excellence. I can’t wait for our next Deciens Community Circle so we can share more about our next topic – scaling finance organizations.
📅 Quarterly performance check-ins are more useful than a structured review process.
Even in early-stage companies, managers should be having explicit performance check-ins with their team members each quarter. These discussions should focus on setting priorities for the coming months and assessing how the team member is performing compared to the previous quarterly check-in.
If you go too heavy-handed with a more structured annual or half-yearly process, you’re likely going to create a far less useful situation where you end up throwing away a lot of your feedback because expectations changed during the performance period (they always will – it's a start-up!)
✍️ Establish a set of principles early, but create policy documents when they are needed.
It isn’t necessary to have the whole canon of HR documents from the outset. Most companies produce these as they go and as they run into situations. Just make sure you have clearly articulated principles for these sorts of things and are consistent so that when you’re writing these policies in detail, there are limited surprises. The founders will typically work with an HR advisor to help set the balance of policy costs vs. employee flexibility.
⚖️ The most important way to scale culture is to hire and promote aligned decision-makers.
Many founders try to scale culture through artifacts because employees have less exposure to them as the organization grows. However, day-to-day decision-making drives culture much more than a document of written values or what you say at all hands. It becomes critical that you hire and promote leaders who behave in ways that reinforce or add positively to your culture. If they aren’t in sync, your culture will drift into these new behaviors and values, core employees will feel disenfranchised, and others will resent you for not doing what your artifacts say.
🚀 Align your cultural strategy with your business strategy for the best effect.
An organization’s cultural strategy needs to be aligned with the business strategy. For example, a large investment manager values trust above all and is typically doing everything they can to avoid messing up. Their culture is to be meticulous, fight for excellence, and debate everything thoroughly. A challenger technology company values experimentation and perseverance despite failure. This type of organization hires evangelical leaders who can keep teams motivated as priorities constantly change and keep alignment towards a long-term vision.
Although you could argue either culture is strong, they are especially powerful when aligned with their respective businesses. This is why it feels so horrible to have a quality issue when you’re a large company and to be stuck in analysis paralysis at a startup.
