This is a guest post from Siddharth Naga S, who heads HR for Cloudnine group of hospitals and is the youngest Executive Coach to be endorsed by Dr. Marshall Goldsmith in India. Siddharth is the author of How Many: A Human Number, a free ebook on designing customer centric HR interventions.
People create performance. And because managing performance is driven by theories and not ‘laws’ (unlike gravity or inertia), it requires a certain preparation to practice. In short, strategic people management never has a cookie cutter approach (sorry to disappoint, but the hard truth is that). Since it is about designing behaviour of individuals to achieve business success, this requires an understanding of decision sciences (psychology, sociology, neurosciences, etc) much like a Finance professional needs to know accountancy.
Strategic People Management is a superset of Strategic HR which is defined as “The undertaking of all those activities affecting the behaviour of individuals in .. efforts to formulate and implement the strategic needs of business”1
So, how does people strategy work in start-ups? One or a combination of the following scenes unfold:
Either, One of the founders who likes to work with people takes on “HR”. Since it is more by trial and error, errors happen. The learning might be high, but that is beside the point. Since the HR function is not strategic in nature, alignment of pay, person and position are not meticulously done. Hence, salaries are given without appropriate structuring. This could either reduce the take-home of employees or increase costs like champagne (hits you later)
However in other start ups, the HR rep could typically be a multi disciplined multi tasker. Someone who manages accounts, does a bit of hiring, payrolls, organizes outings, birthday parties, etc. Engagement (which means performance) becomes entertainment (pure fun without performance). Since, such a position is not too often a part of the business thinking process, aligning workforce planning to productivity is a far cry. So is employee cost control.
An absence of application of HR concepts also could mean that, while hiring numbers are being tracked, deeper issues are not surfaced and – just happen. Some of the most common dilemma led mistakes are (1) hiring ‘the best’ vs. hiring ‘best fit’ (2) business strategy based hiring vs. fear based hiring (hiring to fill positions on time). In short, the best solution is sacrificed for the most familiar solution.
Performance appraisals in start ups are either awesome conversations or dreaded. The former in a small start up and the latter during the growth phases (assuming performance review discussions actually happen).
So what can an entrepreneur do?
Enter, the Human Capital Strategist! This would be a consulting role that feels like a partner in the organization – to help achieve business through strategic people management. By serving the entrepreneur and questioning him as an insider, while bringing the perspectives of an outsider. A fundamental pre-condition for Human Capital management is a strong will at the executive management level of the company, combined with the skill of strategic people management. A Human Capital Strategist can provide just that.
The purpose of the role would be to advise the entrepreneurs on four main areas – Performance, Rewards, Top Talent Management and Engagement.
Performance means going way beyond the numerous forms and processes. It refers to the underlying human processes at work. Designing that makes all the difference to the business.
Rewards is a combination of compensation, benefits and recognition. Aligning systems to the business outcomes is the link that will make a magnet out of the iron bar.
All talent is often not top talent. Top talent management allows saving of immense costs by focusing energies on the top 20% who might make 80% of the difference.
Productivity needs engagement. Engagement is about providing avenues for employees to achieve work values (the aspects they love about work – autonomy, security, creativity, challenge, etc) and engineering performance through pulling together components of learning, systems, processes, etc
Often, entrepreneurs in a company need team development to ensure that performance is achieved by working together. This needs more than organizing party games. Design of such interventions requires deeper expertise and is likely to bring in definite measurable ROI. The HR strategist can play a vital role in this area too. Values clarification leading to culture building and organizational success with minimal bleeding of resources is another area the Human Capital Strategist would be able to contribute much better than an external consultant since he or she would know the DNA of the company much more in detail.
Guidance by a Human Capital Strategist would make all the difference between success and failure of startups in the days to come. In the future, it is also possible that entrepreneurs might prefer investors who provide a Human Capital Strategist to create success, in addition to funds and opening up opportunities through networks.
Having a competent resource, who can design human systems in organizations through mindful and purposeful facilitation, will help achieve ‘business through people’ in a predictable and planned way, instead of individual filters, trial, error and serendipity.
1 SCHULER, R.S. (1992) Strategic human resource management: linking people with the needs of the business. Organizational Dynamics. Vol 21, No 1. pp18-32.