A number of great technology companies have thrived very well on the model of relationships, where they know their employees closely and work with them
For a company scaling up from its start-up phase, when is the right time to build an HR structure? A start-up would not worry about a classical structure to start with. Instead it will have a working structure that would help deal with the spikes and start-up hiccups. It may even revolve around people to start with and there will be double hatting and triple hatting before classical role’s gets crystalized and role holders are appointed. What is important in a start-up is the ability to deal with ambiguity, incompleteness and deal with unforeseen factors. The structure will slowly evolve as dust settles and the organizations starts moving more into the formal nature. It is also essential that the first start-up team has excellent camaraderie and working relationships.
A number of start-up technology companies work without an HR structure for a while. What are the pros and cons of such a set-up?
If you look at some of the best companies and ask them if they have world-class HR structures, the response would be ‘they do not’. There is nothing right or wrong about structures; it is a question of what works for them and what does not. Having said this, at a philosophical level, it really is a question of what the promoters/CEO and the heads want their HR to do. As companies grow, the need for processes becomes important. It is when these challenges come into play that a company starts looking at structure, compartmentalization and best practices.
The pros of having no structure are very quick decision making and close relationship which lead to an informal organization, open to office politics and lobbying. The pros of having a structured organization include informed decision making, use of analytics to pick and choose and the ability to handle unprecedented situations. A simple hybrid system works the best. It is a classical balance of relationships and structure that keeps the relationship DNA of the company alive.
For a large company, what is the role that the HR plays in the scaling process?
For a growing company, talent readiness becomes the most important thing. It is not just about people, roles and position or succession; it is about the overall capabilities—of knowing if the company has the right set of people for the emerging roles, what is the cumulative aggregate of the competencies that the company has, how the advent of technology is coming into play, whether we are upskilling to suit the changing environment and finally will this all hold out. This role makes HR a hugely enabling function and not just a support function.
What is your advice for the HR professionals and leaders who are part of this change? The first thing that HR professionals need to do is to be able to paint a picture of tomorrow and have a vision. If they are unable to see it, they should force themselves to be more disruptive, but it should be very clear in their minds. They need to work to cultivate their own internal talent, ready their own people, hire to increase efficiencies and build diversified skills. They need to stay committed to the purpose. When thinking about business heads and CEOs, they should trust in their people and work towards empowering them. They should ensure that they have the right person for the right role and support them through all situations, critical or otherwise. It is about continuously investing in people.