The Base Of Your Business Stack

Anyone who has followed me for a decent minute knows that in business, regardless of size or industry, an individual is only ever primarily doing one of seven things at a time.

1. Offer (R&D)
2. Marketing
3. Sales
4. Fulfillment
5. Operations
6. People
7. Money

Yes, of course, conversations collapse all the time. That’s what makes growing a business so fun.

Today I’m going to share with you some deep research the Be Pro team has been doing on that sixth thing: People.

The People layer in your Business Stack is what makes or breaks a business. Money cannot fix everything you know.

Through extensive research, we have identified FIVE core components to any business’ People Systems.

People Systems Component 1 - Compliance

Legal issues are part of the Money layer as that is where contracts and such things live. Honoring contracts and agreements, however, is a function of the People.

When looking at the compliance of your business, we've found three clusters that you need to consider.

First, the roles and relationships in your business need to be clearly defined and governed. The chain of command should be clear and overlap should be minimal. This is important because, in the worst case scenario, if your business ends up in court, the first thing the lawyers will do is figure out who works there and what they do. If your organization chart is a dog and pony show, that will put you at a severe disadvantage.

The next cluster for compliance is protection. Again, worst case scenario you want to make sure all legal obligations are being met. This includes having standard interview questions for each employee/role (lest someone cry discrimination), making sure credit card information is being securely stored, and that key employee activites are being documented. For example, in America every employee is required to have an I-9 on file to prove they are legally eligible to work. Not having this could cause problems down the line.

The third and last cluster under compliance are the legal components specific to People. This is where any relevant state or country laws come into play. Your managers and employees need to be aware of these and play by those rules. Tax obligations show up here too. It is important that the business is aware of and honoring all tax remittance and reporting obligations. Every employee and contractor has a tax impact on the business and that needs to be clearly documented to enable such remittance and reporting.

People Systems Component 2 - Hiring

This is how you attract and add people to your team. It's kind of like the "Marketing" journey for your employee. Obviously this is a huge component to your People systems. Being able to grow the team easily is critical to scaling up. Even if you have no plan to scale up a massive empire, your hiring still needs to be given a lot of love and consideration.

Like with compliance, we identified three main clusters within the hiring parts of a business.

The first cluster is around pay and benefits. The pay and benefits involved with your team need to be clear, like the role and relationships. Payroll shows up here. Pay ranges show up here. If there are any perks that come with employment, that needs to be factored into hiring.

Which leads us into the next cluster under hiring which is the recruitment strategy. This goes beyond having an application for candidates. If there are any background checks or clearances, those cost money. Interviewing people takes time. Knowing the operational cost of your recruitment strategy is huge. That is another reason to put the right people in the right roles. Hiring costs can eat into profits with high turnover. Your recruitment strategy also includes the process by which candidates and new hires will be approved. Generally it should be the same process for all roles, unless certain roles have specialized recruitment needs. This can prevent bottlenecks and delays in adding people to the team properly.

Lastly, is the diversity and inclusion cluster of your hiring. While this is a newer distinction, I actually believe it was a true blindspot in business for a long time. The general idea here is you want to find candidates that represent a diversity of backgrounds and life experiences. That doesn’t mean go play nationality bingo on your team. It does mean that if someone with tattoos (who is qualified and a culture fit) should not be discriminated against for their ink. Beyond standardized interview questions, you want to make sure your business has defined processes to ensure that your hiring is non-discriminatory.

People Systems Component 3 - Onboarding

This is how you integrate new people to your team. Again, this is a huge component to your People systems. Being able to onboard new hires is critical to maintaining momentum. Remember, even if you have no plans to scale up, you need to be clear on how you add people to your team to help them produce value for the business sooner.

Onboarding has three distinct phases: pre-boarding, orientation, & training.

Pre-boarding is everything that happens upon acceptance of the job offer until their first day. Often this is hidden from the new hire. This is behind-the-scenes work of making sure accounts are being prepared, equipment is ready, etc. Everything that needs to happen so that, on day 1 of orientation, everything goes smoothly. This is also where you can begin to indoctrinate the new hire into your company’s culture. As soon as they accept the job offer, you can share videos and other information to hype them up until their first day.

Orientation is the intentionally designed first day of work and beyond. A good orientation will ensure that the new employee has:

• Read & signed any necessary documents.
• Met their colleagues & formed a relationship with their direct manager.
• Been made to feel at home in the organization & made a couple of meaningful connections.
• Been given training to understand their role/work & aligned to understand their performance criteria.
• Been given access to all the resources to do their work well.

That’s a lot. It sure is. Building a strong team takes a lot of work. If you design an orientation that nails these key employee moments, any new hire will be set up for success.

Training goes beyond the initial orientation. Nobody can learn everything about their role and function in a day or so. The most important training occurs over the first 90 days with the first week being critical. Remember, the managers need to have the resources THEY need to properly train their people too. A training plan ensures all new hires are being supported through their first year. After one year in a role, they should be fully integrated into the team and producing value. Hopefully sooner :)

People Systems Component 4 - Performance

Once someone is on the team, their ongoing performance is what keeps the business going. Performance is based on the individuals as well as the teams. For this component of the People systems, we actually identified four clusters to monitor.

First is your team development. This is where commitment to the vision shows up. This is where team meetings occur and employee recognition shows up. You also need a defined process to communicate important changes to the team. Keep everyone aligned.

Then, the next cluster is the personal growth of each employee. Helping them see where they fit into the bigger picture. Making sure they are being trained according to plan and being recognized. This means that the business itself has to have a solid understanding of its own training methods.

The third cluster is assessing performance. Managers need a structure to assess and report on performance. The processes for reviewing and updating employee compensation need to be defined. If you are tracking any employee goals (either business or personal development), those processes show up here too. This is also where any employee performance challenges are documented and addressed.

 
Which leads us to the last cluster, offboarding. After enough performance issues, or if someone quits, there needs to be a defined process to offboard the former hire. There needs to be a process for knowledge transfer. There also needs to be a process to recover any company assets and remove them from systems and tools. Exit interviews are also something to do. We recommend doing a paid exit interview 30 days after their last day. Remember to update your organization charts somewhere in there too.

People Systems Component 5 - Leadership

Your people leaders are the most important factor in making sure the business runs smoothly. Great team members with bad leadership never mixes well.

For leadership specifically, there are three clusters to monitor.

First, the overall understanding and collaboration needs to be healthy. Meetings need to be efficient. The business needs to be good at collaborating to understand the key issues facing the team. People leaders need to understand and have the resources they need to be successful. Also, if team members are not accepting decisions that are being made, those kinds of conversations would show up here.

The next cluster is managing conflict. The people leaders are accountable to keeping things running smoothly between team members. They need to understand the basics of conflict management and learn about different styles/ways of thinking and working. When hostility between members becomes an issue, morale always suffers. So it is in the best interest that leadership understand how to manage conflict effectively.

The third and final cluster is feedback. Your business needs to have a process for how people leaders are given feedback and how their performance is measured, just like an employee. There also needs to be a process to survey employees for sentiment, people issues, etc. On top of that, you want to make sure that feedback is being provided and that the needs of the team members are being considered.

Whew! That’s it. Five clusters to consider in your People systems:

1. Compliance
2. Hiring
3. Onboarding
4. Performance
5. Leadership

That was a lot to take in. What do you think?