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Keeping your initial employees engaged and productive as the business expands requires careful strategy; it's all too easy to let your focus slip and lose key personnel. Here Kate Wadia, managing director of Phase 3 Consulting and HR expert, shares her thoughts on how business owners can prepare.
A micro-business doesn’t need to talk about culture to have it perfectly formed. When you are a bunch of folks starting up, you’ll have found a very natural super-glue. As a business owner scaling up, sticking together is altogether harder.
Here is read all about how to navigate from micro-business into fully-fledged SME, how to grow a company from about 10 to 50 employees without losing the magic of your firm. This descent into ‘corporate’ behaviour is often regarded as inevitable. I argue not so.
I’m proud of a success story at Phase 3 Consulting from startup in a portacabin to a stage of maturity where we nonetheless retain a pretty special feel.
Here are a few clues that you are at the stage you need to be contemplating active steps to make sure your growth doesn’t start to derail you, your plans or your teams:
Consider these your early warning signs that more deliberate decision-making about the style in which you wish to further grow is called for.
The definition of culture I like best is ‘the way we do things round here’. Unhelpfully vague attributes of culture are values definitions, behaviours, symbols and norms. We need to turn that into a practical growth plan.
One word that is helpful is shared. The difference between micro and small is that in a micro environment this sharing can be assumed; as you grow you have to be active in the sharing.
There is not a right culture to fit all and my only assumption is that – with your growth – you wish things to feel the same or get better.
Here I point to five practical aspects of the business environment that engender a particular feel for work, with some pointers towards your application of keeping a small company cohesive through growth.
In micro-teams information and ideas flow freely and easily. People are close, results are responsive and agile. Grow up and you’ll need to get your head tightly around the difference between Chinese walls (deliberate) and Chinese whispers!
DO: use new collaborative tools. Email isn’t the best for continuing conversations characteristic of effective mini-teams. Try instant messaging. If your chat doesn’t need the terribly tight security of some professions (for which new business versions are becoming available) then don’t be afraid to use the same apps that your employees wish to use at home
DO: decide how to share your updates. Keep it simple. The right format is best judged in your context (ask people!) but know that it is going to be essential that something regular is scheduled and shared
DO: notice the danger of top-down communication. In a portacabin or coffee shop talking doesn’t tend to be like this. When you start your deliberate sharing, be wary of the direction of information flow. You can mitigate a top-down danger by trusting employees to talk to each other without you
DON’T: forget to communicate about growth itself! Let current team members know about your next plans. Make certain that those in the company from the start have the chance to apply for new opportunities. It’s a vital part of keeping people on board
Motivating and rewarding is easy to judge for one individual. Keeping an individual approach works for a few co-workers but not beyond. HR professionals see reward in tangible ways (pay and benefits) and engagement (our sense of feeling a committed and enjoyably so) as closely linked. And linked to performance.
DON’T: ignore difficult questions in early days of growth about equity of pay. Many very small businesses are used to offering jobs to match previous salaries. Decide if your view is that attracting talent in your context means prioritising external matching or how fair things are internally. I prefer internal equity for cohesiveness. Here’s the acid test: if your full list of rates were to be left open on a desk, how would everyone feel?
DON’T: feel bound by standard arrangements for terms and conditions. You can keep some of the special nature of tiny business by offering team members atypical weekly hours, place of work, trading of time against money, or learning opportunities. Employment law offers surprising few rules. Retain a family feel by working with people’s family commitments
DO: remember reward is not just money. Find out about what matters to your growing team. You might make this a part of the questioning when you select new recruits. What do they care about? What makes them happy to work?
DO: if you do want to give gifts or bonuses, strike an effective balance between company-wide mini-treats that are all the same and unexpected, and individual gestures of a ‘thanks’ or ‘well done’. It is obvious but a way to stay personal is to focus on the recipient not on you
DO: create innovation space, if ideas and development are key to your world. The intrinsic motivators are just as powerful for many as the money. This means planning for diary time in your resource capacity and making sure that people have alone-time or together-time, as preferred, where they can form ideas. Clarify how you want to hear those outcomes, avoiding setting a target for the result
Life with 50 as opposed to five simply doesn’t work in the same way day to day. Avoid a sudden sense of physical silo in the office and manage the different behaviours that a larger team will bring:
DO: offer flexible working. Flexibility means choice. We tend to link this to part-time, working at home or flexi-hours arrangements. Others in the team will notice what you offer. As things grow, differences are fine, as long as you have clear and consistent messages to give. Link any differing practices between people that you require (for example home-working or core hour requirements) to the nature of job roles. The rationale is key and I suggest you share it
DON’T: assume that open-plan space is ideal. Open-plan working does suit many and tends to be associated with flexibility and informality. Some people prefer a quieter space or find it hard to concentrate. Design your growing work-space with quiet and closed areas and open space too. Or let people go home
DO: pay attention to cues. As a team grows watch and listen to any hint of practical or comfort barrier for people working together. At start-up perhaps you were used to colleagues somehow working things out between them. Please take seriously the new responsibility you have towards an increasingly diverse group. If in doubt as to what people need, I suggest you just ask them
A note about HR…
I’ve often been asked, given my HR background, the point at which the office team needs to include an HR representative. The politician’s answer, but that of a hypothetically practical one, is to reframe the question to worry not about formal HR training or qualification, but what you need knowing and doing. Start with a basic people management system (some are free!), access to a legal advice line with template documents and an organiser role.
In my experience, a business will employ a HR person, often on a part-time basis, at any stage of headcount growth from 20 staff to 100. From there, HRs tend to work on the basis of an all-employee headcount ratio of about 1:100
A cue that you need to think about the dangers of losing your preferred culture is that you’re asked for the rules, policy or procedure. A benefit of the micro-work world is, of course, that you can enjoy a freedom to work without explicit rules – and to save yourself the time to worry about them.
Does this need to change?
DO: make available enough guidance that employees feel safely empowered to do their jobs. Ensure boundaries of authority are understood, for example, when incurring expenses, reporting on progress or for time, and when permissions are expected for decisions. Keep guidance open to all – and leave it in an online or physical place that everyone can refer back to
DON’T: be fooled by misperceptions about what the law says on procedure and policy. If HR and employment law is significantly out of your comfort zone, there is good sense in sticking to bog-standard templates (access ACAS materials, for example). If suggested procedures frustrate you avoid the impulse for a maverick rejection, but do find a professional to quiz more. You can then:
DO: dare to be different on policy. With an understanding of why best practice advice is there you can use a light-touch rule to keep the informality and agility with scale. For example, a job description does not need to use a particular format. You do not have to write a handbook, as long as you have covered the requirements to give each person a written statement of the ‘particulars’ of their contract. There are tons of other ways to convey rules: store a Skype conversation, or upload a bite-sized video, or print some mini postcard-sized reminders of what the real rules are to you
My lesson learned….
I left a vacuum on rules. Absolute vacuums do not give the sense of safety that is supportive of the freedom you’ll want to continue from micro to small. So yes, an absence of rules needs to change. Counter-intuitively, change is needed so as best to keep the same.
Leadership here is last but not least. Leading and managing on a different scale is a new challenge to a business and a final say in many senses.
The buzzword of business leadership that convinces me is authenticity.Authenticity allows you to be consistent. Consistency creates trust. We know that trust is a vital differentiator between high-performing and low-performing teams. Continuing and captivating trust, when it can no longer be seen in the whites of your eyes day-to-day, is perhaps the hardest part of growing up but keeping together.
Act consistently and you will create a sense of your authentic self and therefore that of your business. If the real values of the organisation are in no doubt, then it’s easy for more people on board to pick those up, understand if they can subscribe to them and keep up the good work within their new remits.
Here are some clues how:
DO: give opportunity to those who started with you first and gave you the opportunity to grow. Delegate your responsibilities, understanding that trusting and empowering the people who are now your successors (and note: success factors!) might mean you have to pretend to trust before you do. Try thinking about the things that you really are the best at and the things that quite possibly others could do better
DO: relinquish line management at the right moment. I recommend that a truly supportive and coaching line management is only possible for a business leader for a team of 10 or less. Go for creating some open diary space to be available yourself if you’d like the business to feel you are still approachable
DON’T: set out values, mission statements, visions that are not translated into answers about what employees should actually do each day. Feel free to offer inspiring ideals (‘we want to excel at…’, ‘we are the leaders in…’) and support those with keeping life real
DO: distinguish management, which is about control and organisation, and leadership. One way to structure an expanded team is to set up project or task-related management structures, and to provide development and support in a different way. Identifying peers and mentors who can help one another has an extra plus in encouraging more free-flowing communication and avoiding of top-down dictate. Name names of team members who could do well to work together
Growing up without growing apart is not an unrealistic idea. But it is unrealistic to expect that a team of 50-odd connected people not to require a greater effort at feeling good than a few friends in a van, portacabin or coffee shop type environments.
Culture is a very real thing, albeit hard to get a handle on. If you do just one thing, then take time for yourself to pinpoint how you and your most trusted colleagues want your business to be. With this set of values identified, you can act through a growth stage with a consistency and credibility that engenders trust and understanding.
An extended team who are trusted and who understand the business you want to be in can act on it safely.
Tiny teams are joined with a glue that sticks naturally; as you grow and scale up the difference is that the application of that glue needs attention for the scale to stick together. If you get it right, the rewards are fabulous for everyone.