Case Analysis: Cart Before The Horse

Many years ago, Peter Drucker said: Culture eats Strategy for breakfast! Decades later, these words have only proven truer for companies both small and big.

Startups realise it much later, often having paid a price for not investing in HR. They are quick to invest in technology, tools and talent, but not in HR which builds a culture of customer delight, collaboration, accountability, continuous learning and sense of urgency – which together make for “organisation capability.”

Organisation capabilities bridge vision and action, strategy and execution and finally the satisfaction and fulfillment that Manu articulated so beautifully. Without the bridge well-built, inspected regularly and maintained and reinforced periodically, organisations seldom reap their intent, leave alone the ROI. Startups come up when an idea fructifies and a passionate owner ready to pursue that idea. But that is only a starting point, not a success formula.

But then, organisation is not merely owners plus ideas. To believe so would tantamount to thinking that a human being is just bones and flesh. But humans have mind, heart and soul and so do organisations, who needs to inject the mind, heart and soul systematically to enable that journey of becoming to being, success to significance. Only good HR can deliver this to precision! It takes time since it is not a fix that the CEO can buy and install, like he does with technology and furniture.

As Manu asserts, the yellow brick road to creating fulfilment beyond satisfaction is one with speed-breakers and potholes. From legal compliance needs to generating a motivating creative drive, a competent HR can prove to be a boon for a startup. Many a startup tumbled for lack of funding for sure, but many financially stable startups also tumbled for want of creating culture and capabilities (Think Uber…). And that is why those who understand business as mind, heart and soul, often say “the soft thing is the hard thing.” That is what Louis Gerstner said when he took over the reins of a troubled IBM, “Culture is not the thing…. It is the only thing!”

If success demands a great sense of urgency, ownership, proactive collaborating at work, learning from mistakes and customer feedback, then these have to be weaved into the ‘Way’ of working -- what we call culture. And culture building starts with hiring and continues throughout the organisation’s life. And not just determining and defining the values that will guide the company, but HR also translates these values into every-day behaviours to govern “how we do things here” for everyone.

Whether teams or firms, a deep dive into startups has revealed that they typically go through four stages: forming, storming, norming and performing.

Organisations mature as they grow through these stages. Startups and their founders often underestimate the middle two stages. They believe that once they start, the startup will perform. Not so! Sooner than later, startups are confronted with chaos: customer complaints, interpersonal conflicts and the like. And people resort to familiar behaviour – wind-milling at each other, a.k.a, “blame-storming.”

HR is not a luxury, as many startup CEOs misunderstand. In my consulting work with many startups, I had to work on the mindset change – from founders believing ‘HR as a necessary evil to do the compliances’, to believing ‘HR as a strategic partner for business to build organisation capabilities.’ And since they equate HR with pure administrative chores, more often than not, they outsource it. And when “hell breaks loose”, as it happened with JO (and not too long ago, at Uber), they are complet-ely puzzled and wonder what went wrong and how it could have been prevented. And HR has another unique task – being a coach to the CEO and the leadership team to help them prioritise managing people, values and culture before everything else. JO can learn from the travails of Uber’s Travis, who could have used a good coach. But without HR, how do you tell a CEO that he needs help?

And until the in-house HR has been hired, the CEO has to wear the HR hat to demonstrate the mind-set towards HR. Failing to invest in HR simply means the founders put the cart before the horse! No wonder then, the cart is not moving!  

The writer is a Marshall Goldsmith certified executive coach and HR advisor to corporates with 30 years of corporate experience in leadership roles with IBM, HP, Philips and Symphony Teleca Corporation