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Starting up in India? Get your people strategy right

What are the more successful startups doing right? Here are three critical elements

Aon Hewitt
Published: 08, May 2017

Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement, and health solutions. We advise, design, and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability, and wellness. Aon Hewitt is the global leader in human resource solutions, with over 35,000 professionals in 90 countries serving more than 20,000 clients worldwide across 100+ solutions. For more information on Aon Hewitt, please visit aon.com/india

Startups must focus on the people/talent strategy requirements to scale the business (Image: Shutterstock.com)
Startups must focus on the people/talent strategy requirements to scale the business (Image: Shutterstock.com)

In the course of our work in India, we partner with startups across the maturity spectrum on a range of issues. The business challenges they describe focus on three key elements- monetisation of the business model, expansion of the customer base and securing the next round of funding. What is usually missing however, is focus on the people/talent strategy requirements to scale the business. Even when it has mind space with founders, it is largely centered on operational elements like quick fire hiring or compensation levels. This is different from our experience with more mature companies where talent/people issues are regularly amongst the top 3 to 4 issues identified by CEOs and CXOs as future business risks.

In our experience, a critical decision making criterion for investors is the startup’s ability to “scale the model”. A large part of that is the uniqueness of the value proposition the startup provides. However, people and how effectively they work together, are equally important and represent a “must get right” for success.

What then are the more successful startups doing right? Here are three critical people/talent strategy elements that we think startups need to get right:

1. Hire the “right”, not the “celebrated”: It is hard for any organisation to succeed purely on the charisma of its founder(s). Key skills around product management, revenue/business model monetization and investor management are critical for startups and are hard to find. Many choose to buy these skills by head hunting leaders at inflated price points from tier 1 companies/big brand names/consulting firms, with little or inadequate attention paid to the fit of leader into the role/problem that needs solving and/or the organisation. Just because someone worked at and was successful at a big name company, does not necessarily make them well suited to driving growth for your organisation. Once hired, these leaders are thrown into the deep end with the expectation that they will immediately be able to turn things around. As investor pressure mounts to justify inflated salaries and costs, so does the stress between the founder and the employee. There have been many public cases of employees then resigning, being bitter and vocal about it. It’s important to have the right leaders, and it’s important to get the hiring right as early as possible. Spend time getting to know prospective candidates, explaining to them the vision of the organisation, the problems you are trying to solve and the challenges that prospective hires are likely to face. Encourage prospective leadership hires to really understand what the start-up is about, and the challenges/problems they will be expected to solve. Remember, you are hiring a problem solver, not a brand ambassador.

2. Define and fulfill your “employee promise”: “Long term” is a much disliked phrase for the startup community, perhaps rightly so. However, as an organisation “scales”, there comes an inflection point beyond which future growth necessitates the need to take a long“er” term view. It’s important for startups to recognise the coming of the inflection point and take the time to define the employee experience right across the people strategy spectrum - from organisation structure, to hiring processes, to onboarding, to managing and rewarding performance, to careers. A number of startups we consult with, undergo significant structure changes over short periods of time. This is often garbed as the need to be agile and responsive to a changing scenario. In reality, these are either caused by strategy flip flops or the whims of a directorial style of leader or by changes in the leaders manning key roles. When sustained over a period of time, these cause significant erosion in employee perception and ultimately in value creation. Successful startups have taken the time to define the basics of the employee experience and to build the processes/systems to deliver that experience repeatedly.

3. Culture and engagement can make or break: As Peter Drucker said “culture eats strategy for breakfast”. Most startups are based on the passion of their founder(s). As the organisation scales, it’s difficult to translate that passion and sense of purpose into the ever increasing headcount. This is where the culture of the organisation is key. The HR function has a critical role to play in this. To start with, the HR needs to “get it” when it comes to the “purpose” of the business. It then needs to define the people processes and systems needed to build the culture and track the pulse of the organisation on an ongoing basis. An engaged workforce is a productive workforce.

Your people strategy is a critical determinant of success. Don’t leave it to serendipity. Seek help proactively - there’s a lot of it available.

- By Sankalp Mohanty, Lead- Aon Hewitt Knowledge Center

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