A question I get often from new founders is about process. People who worked at large companies are used to having a process for everything and they want to emulate that.
This might sound like a cop-out, but normally my answer is: Process is a bug, not a feature.
Why do big companies have all these processes? Is the best way to interact with people through a set of bureaucratic rules? No! Process is necessary at big companies because personal judgement doesn't scale, and there's no other option. This is not something to emulate!
Example: Onboarding a new employee
When making a new hire at $BigCo, there's probably a well-defined set of steps involving HR, videos, surveys to prove you learned stuff, welcome packets, onboarding checklists, etc.
So new founders think, "I guess I need all that stuff." But here's a better way for a startup to onboard a new employee:
- Put their desk close to yours
- Talk to them a lot
Seriously, that's it. I'm not saying this is the perfect onboarding experience, but it's almost certainly better than the $BigCo approach. Just being near someone and using common sense to help them understand how things work is actually extremely effective.
So why don't big companies do this? Because they can't.
$BigCo hires thousands of people per month into all kinds of different roles. Each one has a different manager, and those managers don't know most of what goes on at the company. More importantly, if something needs to be fixed, the managers aren't always empowered to fix it.
💻🏡 Getting a computer at a small co:
New hire: Hey boss, I need a computer.
Boss: Oh yeah, we have one in the closet. Let me get it for you. Let me know if you run into any issues getting it set up.
💻🏢 Getting a computer at a big co:
New hire: Hey boss, I need a computer.
Boss: Crap, we have to talk to I.T. and I have no idea how long it'll take for them to get everything set up. I guess you can't get anything done until then.
Given the $BigCo boss's inability to immediately fix the situation, it becomes much more important for IT to already have the computer set up before the new hire starts. That's what the process is for.
This applies to more than just onboarding new hires. In most situations, having smart, empowered people using their personal judgement to make decisions will work better than bureaucratic process.
This might be a bit simplistic, but a simple framework for thinking about this is: If a person understands the context and is empowered to do what needs to be done, they'll probably handle something at least as well as whatever the process would say to do.
Does this mean you shouldn't document anything?
This isn't an argument against documenting your procedures, putting together checklists, etc. The first time you onboard a new hire, you absolutely want to write down the things you end up doing so that you don't have to reinvent the wheel the next time. But I'd argue that's subtly different from creating $BigCo-style processes for two reasons:
- You shouldn't feel obligated to create this documentation in advance. I've talked to so many people who are afraid to make their first hire because they don't have all this stuff figured out. That's fine. Just make sure the new hire understands that things are in flux because it's a startup, figure it out as you go, and write it down for next time.
- You shouldn't feel constrained by what you wrote down in the past. Something you can do with personal judgement that a big company can't do with processes is treat every situation individually. Sometimes the thing you wrote down before will work great. Sometimes you need to make adjustments. You should feel free to use your judgement for as long as you can.
When does this stop working?
As great as personal judgement is, the unfortunate reality is that it doesn't scale. At first, the entire company is a single team. Then it's a few teams. Each manager is still more empowered than anyone at $BigCo, but it's not quite the same.
Even at our current small size (18 employees) we've needed to processize a lot of stuff that used to just work automatically. We're still significantly less structured than a big company, but there are clear signs of the "personal judgement" approach breaking down as we grow.
But that's ok. The takeaway is: Take advantage of this while you're small. Sure, document what you're doing, don't reinvent the wheel each time, etc. But if you're replacing human judgement with process, you're failing to capitalize on one of the few advantages you have as a small company.