The Process of Creating Good Processes in a Startup (part 1)
Many of the entrepreneurs I work with dislike process. Some refuse to institute any type of process in their startup. That is usually their undoing.
My first business partner prided himself on being an “idea” guy. He would say, “Don’t bother me with the details.” One of my partners in a more recent venture loved to say, “The only thing we are dogmatic about is not being dogmatic about anything.” Neither one of those ventures turned out very well.
The devil is in the details and a certain amount of dogma is necessary in any business – especially in a startup. While process is not exactly dogma, it’s a close cousin and is also akin to culture. In fact, I would argue that the most successful entrepreneurs are dogmatic about both process and culture. A startup that does not have a fervent (almost religious) belief system, and a culture that embraces good processes, will never scale or mature into a highly profitable business.
Setting aside the nuances between process, dogma and culture, allow me to define what I mean by good process.
First of all, process for the sake of process is bad process. Bad process is often why talented professionals become disillusioned with corporate life and decide to strike out as entrepreneurs. Thus their inherent dislike of process. Bad process is also how bureaucracy creeps into an organization. Bad process is about unnecessary controls and irrelevant rules. They are often designed to benefit the few at the top of the organization at the expense of everyone else in the organization.
Conversely, a good process is:
- Simple. It is fool-proof and can be quickly learned and applied by new hires and temps.
- Efficient. It works flawlessly and it measures the right things – including when to change the process.
- Understood. It is crystal clear about the end it is designed to achieve.
- Practiced. It is religiously observed by every single person in the company.
- Self-reinforcing. The more people practice it, the easier their jobs become.
- Self-evident. Its value is not debated or questioned. When it is not practiced, it is missed.
- Consistent and Predictable. No one has to guess if or when to practice it.
A good process is documented and enables transparent decision-making. It does not depend upon interpretation, tribal knowledge or secrets. This is not to say good process is inflexible. It’s just not so flexible to cause wide deviations in how or when it is practiced by different people in the company. Most importantly, everyone knows how it is used by management to improve the company’s performance.
Over the course of my career it has often fallen to me to create and institutionalize a startup’s company-wide processes. The first thing I learned NOT to do was to try and transfer processes used at an old company into the new company. This is a common mistake of first time entrepreneurs. They leave their job at a big tech company and try to institute the processes they used there at the startup – often with disastrous results. Every startup is unique. Its processes should be considered, debated, created, tested and instituted with a fresh perspective.
In my next post, I will outline a process for doing exactly that. Stay tuned…