Creating Good Processes in a Startup (Part 2)
In my last post, I argued the need for startups to create and institute good processes. I explained the differences between good processes and bad processes. In this post, I will suggest a process for creating good processes. This process can be used by the founders to create company-wide processes, or by the various department heads empowered to create the processes for their part of the business.
Teams support what they help create. Conversely, they tend to be indifferent, if not downright apathetic, about things that are forced upon them. For this reason, it’s a good idea to ask the team who will be bound by the process to help create it, or to at least provide input. As new team members are hired who did not help create the process, ask them how well the process works for them and what adjustments they would like to see to improve it, after they have been using it for a while.
The very first step is to consider and debate whether a process is actually necessary. Lots of startups operate just fine on tribal knowledge and informal ways of doing business, especially if they have an open and vibrant culture. If you think a formal process might be necessary, it’s a good idea to assemble everyone in front of a white board and write this question:
What do we need a process for?
or, if you already have one in mind…
Do we need a process for [blank]? Where [blank] might be…
- Weekly communication, so that everyone knows what is going on; what we are doing well and where we are falling short?
- Tracking and measuring customer feedback and inquiries?
- Reporting our progress to investors and other outside stakeholders?
- Posting job openings, screening candidates and interviewing?
- Renewing licenses and filing compliance reports?
- Purchasing stuff and dealing with vendors?
- Etc., etc.
Let everyone debate the question and reach a consensus on whether a formal process is needed, or whether the informal and undocumented process currently in place, if any, is sufficient for the time being. In my experience, the team will clamor for a defined process, especially if the company is growing. It’s wise for the founder or department head not to be the first to express an opinion. If the team thinks the leader wants it, or doesn’t want it, they are likely to express that same opinion.
If the consensus is that a process is needed, the second step is to solicit everyone’s input on the broad strokes. It’s usually best to ask a series of pointed questions to spur thinking and discussion. For example:
- How should the process be structured to make you more productive and the company (or dept.) operate better?
- What are the business drivers that the process should support?
- In what ways was a similar process implemented at your last company, and what was good or bad about it?
- What are your expectations for why, what, who, when, where and how this process should work? (For more context, see my post Making “It” Happen.)
This step is essential for implementation and adherence. Employees take a certain pride in helping to create the processes that everyone will use and that will contribute to the success of the venture. They will make darn sure that new hires practice them, which is an essential part of building a strong company culture.
The third step is to consider adaptability, compatibility, and extensibility with other systems or processes, and with the company’s culture. This step also involves defining the criteria by which the effectiveness of the process will be measured. These things should be considered in light of the company’s growth projections. This step can often be completed by a small committee or the department head, but again, by welcoming input from everyone who wants to give it.
The fourth step is to ascertain the budget and implementation requirements. In my experience, this is easier than it sounds. Most processes can be implemented quickly for little or no money, especially those that will get the job done for the foreseeable future. Given the company is a startup, the costs and implementation requirements should be as light weight as possible. The worst mistake is to expend precious cash and human resources to implement a process that might not work as expected, or worse, be completely rejected by those who are supposed to use it.
The fifth step is to look at industry best practices and off-the-shelf solutions that will get the job done. There is a tendency among some tech startups to want to create certain systems from scratch, especially if they involve writing software. Nothing creates job security for IT guys as much as a system (process) they developed and only they can maintain. As a startup, always try to source and adapt existing tools to implement a new process.
The sixth step is to deploy and test the new process in a limited environment. Don’t open it up to everyone all at once. Take it for a test drive, work out the kinks. If you find a fatal flaw, or the results are sub par, look for another option. When you are satisfied that it works flawlessly and meets the requirements of a good process (see part 1 of this post), then formally institute it as a new process, document it, and insist that everyone practice it religiously.
Finally, don’t hesitate to seek expert advice and assistance when instituting processes that are mission-critical, and for which no one at your company has much experience. In my last venture, we needed to create a series of processes for investing in startups and assisting them to grow. All of the partners had experience as angel investors, but none of us had experience as venture capitalists. We hired a consultant who had such experience to guide us through the process of creating our processes. In the absence of this guidance we would have floundered around, making it up as we went — which is how bad processes take root.
Finally, after deploying the process, measure its effectiveness by the criteria you established in step 3, and continue to tweak it or upgrade it as needed. If it’s a good process, it will become ingrained in the company’s culture and everyone will wonder how the company could have ever done without it.
May your processes propel you to prosperity!