The Magic Bike Company

Human Resources

“The ability to attract and motivate great people is critical to the success of a company because a company is just a group of people that are assembled to create a product or service. If you’re able to get great people to join the company and work together towards a common goal,” he says, “then you will end up with a great product. A great product attracts buyers, and the more buyers you have, the more successful your company will be.” Elon Musk quoted at CNBC and Ruth Umoh
How do you get human resources right in a fast-growing tech company? Growing from 50 to 500 to 5,000 to tens of thousands of employees is hard. Operating systems and processes that work in a 500 person company don’t work in a 5,000 company. The same is true of every growth spurt. Systems break down, and stuff gets messed up. A well designed and implemented human resources organization can help. A messed up human resources organization will hurt. As Uber discovered. A woman engineer was unable to get human resources to deal quickly and appropriately with a sexual harassment claim.

Getting Human Resources Right

Hire a human resources (HR) leader EARLY in the development of your company and “level up” your HR leader as needed as your company grows. The right HR leader in a company of 50 is not likely the right HR in a company of 5,000. Of course there are exceptions to this rule, but in general, you will need more experience in the HR leadership function as your company grows.
Have your HR leader report directly to the CEO. Do not tuck the HR leader underneath your COO, VP Ops, CFO, GC, or VP Admin. The CEO has a hard enough time figuring out what is going on in her company as it is. Putting someone between them and their cultural leader/thermostat is a bad idea. Plus the optics are terrible. Your management hierarchy says a lot about what you value and what you do not. Actions speak louder than words, always.
Do not make your HR function a recruiting function. Of course, HR needs to help the company hire. And it certainly needs to help transition out people who have to leave the organization. But HR organizations that function mostly as an I/O pipe are lousy HR organizations.
Do make your HR organization about culture and leadership first and foremost. I have heard many HR leaders called “our culture carrier.” That’s good. And HR organizations should be making sure everyone is getting feedback on their performance and development goals, including the CEO. Organizations that share feedback top to bottom with dignity and professionalism are great places to work and perform better.
Always have a company handbook that lays out the rules of behavior in the workforce. You can’t do this too early. You set the tone early, and it propagates. It is excellent if you can start with your values, clearly laid out for everyone, and then lay out the rules and what happens if they are not followed. There’s feedback, and there’s guidance; there’s praise, and there’s criticism. All of it is important to do better work, but to develop a better and more productive workplace and relationships — especially given how much time we spend at work! — The way we give and receive feedback matters. Learn more here: Giving and getting feedback
Nora Jenkins Townson Founder @ Bright+ Early, former Head of People @wealthsimple, startup HR veteran wrote an article on Medium How To Bootstrap Your Startup’s HR (And When Not To) that describes the steps a startup should take to onboard an HR staff. At some time you and your partner will begin the process of growing from two to many employees at your new and unique startup. As Uber, GitHub and Reddit have demonstrated employee problems occur. When they do, you need professional help. Also, there are legal requirement you need to be aware of in recruiting and letting go of current employees. This article provides information to help the startup CEO in onboarding her HR department.
I believe that the companies that take the time to properly onboard new employees are better places to work and perform better. Onboarding should be more than “here’s your laptop, here’s your desk, here’s your boss.” It should be at least a few weeks of getting ingrained in the values, culture, systems, processes, and rules. It should be learning about every part of the organization, the current operating plan, strategic priorities, management team, and more. Doing it right is hard, but it pays off big time.
One CEO that I have worked with for more than fifteen years once told me his HR leader was his most crucial senior executive. He said she was his “business partner.” That’s a great place to get to if you can get there. What is more important than your team, after all?
In the Uber situation we also saw a failure in the “whistleblower process.” This is a particularly hard process to get right. First of all most teams, whatever kind of team, don’t really want “snitches.” It is human nature to try to come together and support each other. And blowing the whistle is the exact opposite of that. So here are some things you can do to get this right:
Train your organization about the situations that are particularly tricky; sexual harassment, drug and alcohol issues, fraud, etc. Teach everyone how to recognize them and what to do about them. Make it clear that they are EXPECTED to report these issues to management and that failure to do so is complicit behavior. Have some sort of whistleblower hotline. Often times the company General Counsel will manage this hotline. Make sure everyone knows about it.
Enable anonymous feedback throughout the organization and explain when it is appropriate and when it is not. Obviously anonymous feedback has great potential for abuse. But it is often the only way you are going to get the most important feedback that nobody will share otherwise.
Talk about this stuff in your all-hands meeting, regularly. It should not get talked about only when something terrible happens somewhere. This is something that should be discussed at least a couple times a year. Companies that scale rapidly can double in size in less than a year. So you have to talk about this stuff frequently to make sure everyone understands it. And make sure to cover it in the onboarding process. This discussion on Getting Human Resources Right is from the blog of Fred Wilson.

Culture decides how people act when there is no one telling them what to do. We know that culture is essential. We even think we know what it is. But culture isn’t perks like dogs and snacks in the workplace — nor is it a defining personality, like, say, “googleyness”. Culture is the collective behavior of an organization, and whether or not you go about creating one, you’re going to get one anyway, argues a16z cofounder Ben Horowitz. “Unless you set it, it’ll just be what it is.”
“A lot of the good companies that I’ve seen proactively define their culture. And they emphasize what that is with their first 20 employees, and then it takes a life of its own. Why do you want that? It’s sort of like when ducks fly south for the winter; you don’t have to tell the ducks in the back of the V, get in the V. They just know. And when a company gets into blitz scaling mode, you don’t have time to tell the hundreds of new employees that you hire, here’s how decisions get made here, here’s what we value, here’s how we make tradeoffs at the margin. They have to be programmed in the DNA of how they participate in the company. Basic management systems. This has to do with just one-on-one meetings, board meetings, team meetings, forecasting frameworks. You know, what gets covered in those meetings, what shouldn’t get covered in those meetings. Just having a sort of a philosophy of that going in can save a lot of time and avoid a lot of management debt.” Mike Maples Jr.
“Companies generally work better when they are smaller. It’s always worth spending the time to think about the least amount of projects/work you can feasibly do, and then having as small a team as possible to do it. Don’t hire for the sake of hiring. Hire because there is no other way to do what you want to do.” Hire to fit your culture! Additional hiring advice from Y Combinator president Sam Altman can be found at AngelList
So what should startup leaders look out for? In general, any sign that single-minded collaboration toward a shared goal has been replaced by team- or department-specific priorities. Startups generally begin with a single tight-knit group, breaking into teams as they grow to provide the focus around a particular problem domain or business goal. “But those teams are never independent of one another. There are always dependencies,” says Grosse. “If communication between those groups doesn't work, then you create a fertile ground for factions. You get factions when teams cannot seem to collaborate because of differences in vision, differences in working styles. Perhaps there’s even mistrust between the teams.” Fighting Factions: How Startups Can Scale Without Mutiny a First Round Review.

Leadership and behavior

An orchestra conductor faces the ultimate leadership challenge: creating perfect harmony without saying a word. Captured in this Teds Talk are a number of leadership skills!
The magical moment of conducting occurs when the conductor arrives onto the stage. “There is an orchestra sitting warming up and doing stuff. He goes to the podium, and in front of all that noise, he makes a tiny gesture. Something not very pomp, not very sophisticated. And suddenly, out of the chaos, order. The noise becomes music.”
The conductor is spreading happiness. The important thing is this happiness does not come from only his own story and his joy of the music. The joy is about enabling other people's stories to be heard at the same time. In this short video, we witness different styles of leadership. Delivered with a twitch, a wave of the hand, or facial expressions.
How do you create a team that functions like an orchestra? What makes them into partners? “You have the plan in your head. You know what to do, even though Kleiber is not conducting you. But here and there and that. You know what to do. And you become a partner building the rollercoaster, yeah, with sound, as you take the ride. This is very exciting for those players.”
As a manager and leader, you want to create music out of noise and chaos. Spreading happiness and joy embedded in stories that become your product.
To motivate a team, you need goals that are clear and metrics that support them. That means that your strategy — how you break down the problems and how you plan to remove the obstacles — should be widely understood, and your goals should match a shared mission. And both need to match the systems you’re using to navigate so that your people align themselves with the strategy.
That isn’t something that happens on its own, but it also isn’t something that can be imposed from above. Instead, it needs a cooperative alignment, matching the goals with incentives based on useful metrics. Failure to use parameters well means that motivations and behaviors can drift. On the other hand, using metrics won’t work exactly, because complexity isn’t going away. A strong-enough sense of mission means it may even be possible to align people without metrics.
When Yvon Chouinard, Patagonia’s iconic founder, and his wife Malinda started the company, their employees were friends and family and they wanted to support them as they worked, and started their families. Patagonia, which has housed an on-site school daycare for nearly 34 years, knows the power of employee happiness. Its employee daycare has enabled the company to attract and retain top talent, which has been a boon for the company. When Patagonia’s owners created the daycare during the early years of the company, they were responding to the human needs of a workforce which consisted of their friends and family. It unexpectedly led to a nearly 100% retention rate of mothers employed by the company, and Patagonia’s overall company turnover has been described as “freakishly low” . By listening to their employees, the owners were able to make them feel happier about going to work. retrieved from: Quartz
“It makes sense, however, to use both sets of tools; adding goals that are understood by the workers and aligned with the mission, which allow everyone to benefit, will assist in moderating the perverse effects of metrics, and the combination can align the organization to achieve them. Which means ambitious things can be done despite the soft bias of underspecified goals and the hard bias of overpowered metrics.” retrieved from: Overpowered Metrics Eat Underspecified Goals - David Manheim writing at ribbonfarm
“Spend money very very carefully until you have product-market fit. You want as lean a team as possible before you get there. There is no point of hiring more than the bare minimum team (usually just the co-founders) before you figure out what users want. Then you scale. Companies that hire before that waste runway, and that’s a shame. Once you have product market fit, you still need to be careful with hiring. retrieved from: Sarah Tavel, quoted by Tren Griffin