Female candidate interview with HR managers in office
A difficulty that many entrepreneurs face when transitioning from starting a business to scaling it is how to professionalize the company and its hiring practices. In its infancy, a company will generally not have the resources to overhire. Especially given all the unknowns entrepreneurs face at the beginning, including how their new product or service will find its niche, hiring generalists is often key both to keeping costs down and to maintaining flexibility. However, as companies begin to scale, leaders need to think about how various roles and responsibilities will morph or become more specialized and who the right people are to put in place.
The challenge today is that the “right person” is extremely difficult to attract or keep. With an unemployment rate of 3.5% in the U.S. as of July 2022, competition for top talent is costly and time consuming. For start-ups and companies looking to scale, the challenge is even greater, since the effort required to grow a business runs contrary to the current trend of quiet quitting. The strategy for growth-oriented companies building a leadership team can, therefore, not be ad hoc or simply hiring the best talent with the hopes that a team will emerge. Entrepreneurs and business leaders need to think clearly and proactively about growth goals, what is needed to drive that growth, and what skills, experience, and temperament employees and managers should have to be able to succeed.
In his new book, Who’s Your Mike: A No Bullsh*t Guide to the People You’ll Meet on Your Entrepreneurial Journey, Kurt Wilkin provides numerous examples of the challenges entrepreneurs face when recruiting, hiring and keeping employees as a company grows, and he offers practical guidance on how to resolve or mitigate those challenges.
The mantra of Wilkin’s book is “your company is only as strong as your people.” While he explicitly proves the truth of this statement through how he describes the various individuals that entrepreneurs hire and potentially outgrow when professionalizing their companies, the importance of this mantra reveals itself in how it sets a priority for creating a company culture.
When it comes to hiring, it is not enough to recruit people with impressive resumes and great recommendations. Leaders must also consider how to place their people in the right role—one that speaks to their strengths and interests and where team members have complementary skill sets. For successful companies, the “people” side is never static, nor does it end after recruitment. The right role for a great employee may change over time, as the company evolves or as a person’s interests change. Moreover, being a great contributor does not always translate to being a great leader or manager. Each role demands a different set of skills and objectives. Simply promoting a person to a leadership role because they have been a good individual contributor may set the person up to fall victim to The Peter Principle and, thereby, the company, for failure.
One insight that Wilkin shares about the difference between “top talent” and “the right hire” is the benefits of a B-player employee. He writes, “Most business books will lie and tell you that you need Rockstars in every role if you want to be successful. But the truth is, B-players are vital parts of your team as well. As long as they’re given the right opportunities, put in the right role, and held accountable, they can help you achieve your goals. Chances are you won’t be able to scale without B-players on the team.” B-players are not second-rate, they serve a different purpose. According to Thomas J. DeLong and Vineeta Vijayaraghavan, they are committed employees who put a high premium on work-life balance, which means that they seek advancement, but not at all costs. When managers set expectations that match these employees’ skills, motivation and temperament not only will they find their B-players to be highly reliable, but they can also serve to counterbalance some of the risks of A-player behavior.
When hiring the right people for the right roles, the intangible that turns a group into a team is building a great culture. Here, too, “your company is only as strong as your people.” If a company’s employees have the right skills but the organizational environment hinders complementarity and collaboration, then its people will be weak, and the company will not be able to grow. As the number of employees expand, the ability of a leader to singlehandedly carry the company culture will get harder to the point of being impossible. What companies need is to build their ethos into their structure by aligning hiring and employee engagement practices with the company’s purpose and values. Tying company decisions to—and communicating those decisions with reference to—shared organizational goals and values will ensure that companies won’t lose their purpose as they scale. It will also help to solve some of the HR challenges that growing companies face, especially in today’s tight labor market.
