Hiring The Company’s First Head of HR
As a company grows from having a founder (or founders), to hiring its first employees, then to becoming a team, and then developing into a multiple-team institution, a host of administrative, personnel and management issues become increasingly critical, and yet difficult, to address. Eventually every company that matures from Seed to Venture to the Growth stage and beyond discovers a brutal truth: the very thing that gave life to the company - the fuel of innovation that powered it during its earlier stages - eventually becomes one of its greatest inhibitors towards full actualization. The more ad-hocratic, hyper-lean, “Build-Measure-Learn” environments and cycles that once gave their “baby” life and a chance for a future during its fledgling moments, eventually threaten further maturity.
Often, this brutal truth that “what got us here won’t get us there” becomes the foundational argument for hiring its first head of HR. And often times it’s with deep ambivalence that founders allow themselves to make such a hire. On the one hand, founders are not just driven by, but deeply in love with...at intoxicated levels…the fast moving, unpredictable, innovation-driven environment that “presently” exists in their company. It’s HOW they got some of their best customers, it’s WHY certain developers even joined the company, and it’s a straight blessing to their spouses who know that their partner couldn’t practically live in any other set of circumstances. But on the other hand, board members, investors, friends, family, employees, customers, potential customers, and former customers are now urging these founders to develop a more efficient environment, a more predictable and scalable product, and a more quality-driven culture. Unfortunately, the larger the company grows, the louder the refrain for…gulp...efficiency.
And so, because it represents an existential crossroads for the business, installing the first head of HR is a more critical hire than most growing companies realize. This one hire can either help scale the business while helping the firm keep its soul culturally, or it can become an invisible, bureaucratic “poison in the well” for the next couple of years.
“And now, a moment of silence for every entrepreneur who has to make this tough decision, and first-time head of HR in a growing company.”
So, having seen this moment many times as either a VC, a consultant or as a practioner, I offer these few ideas and guidelines to help executive teams during this difficult, pubescent-like transition.
1) Hire a head of HR that has seen rapid-growth at least two times
Among other things a solid first head of HR should be a sophisticated concierge to the executive team to help them through the inherently transitional and ambiguous growth moment. (Rapid growth induces tremendous chaos. Like flying into a cumulus cloud…which from a distance looked fluffy and cute…and now that you’re in it is dark and grey and scary. I have often used “the fog of war” also to describe it. The more rapid the growth, the thicker the fog. It’s not for the faint of heart, and I strongly recommend that companies do their best to not just hire the best talent, but the very best talent who clearly demonstrate the capacity to work – and even make sense out of – this fog.) Having a stronger tolerance for ambiguity, a growth-experienced head of HR should be someone who understands what matters most to you and the executive team and can give a great voice to it through internal branding and messaging, recruiting and effective, end-in-mind management of key HR functions like compensation and onboarding.
A great first head of HR can also be someone who can help employees know what to expect next. For example, I mentioned that a head of HR can help the company keep its soul. Well, as it turns out, every firm that experiences growth eventually finds itself in the crosshairs of frustrated employees who will beat a drum and indict the company of having lost its soul. Your head of HR should be the calming voice of reason who helps employees understand that this angst is an inevitability since culture can never be static anyway. “Ladies and gentlemen, this is your head of HR. We are about to go through a couple of bumpy clouds, and we will be through them in about 5 minutes. In the meantime, the CEO has asked that you please put on your seatbelt and remain hungry, humble and smart.”
