SmartBlogs on Leadership

Franny Oxford is an HR executive with a passion for entrepreneurial organizations. The blogger behind Do the Work, she is a member of our Workforce Advisory Board. SmartBrief on Workforce Senior Editor Mary Ellen Slayter recently spoke with Franny about the HR challenges smaller companies are facing these days.

MARY ELLEN: Let’s say a company has grown enough that it can afford to expand its senior leadership team beyond a single CEO/president. Who’s the first person they should hire: A CFO? An HR chief? Someone else?

FRANNY: I find most entrepreneurs start their first few companies with people they already know — so while there may be a shared history and a deep trust, there is often a critical skill set missing on the team. Fill that gap, with an eye toward the long-term. It might be an operations role, it might be someone who is 20 years further into the field and has connections and experience you can lean on, it might be someone outside the revenue stream completely, like a CFO, an IT director, or a really great admin or three. It depends on the company’s leadership mix, history, strategy and place in the market.

Traditional HR can often be outsourced or, frankly, just managed by competent and caring company leadership, for quite some time. I once worked for a company that made it to $450 million in revenue, and 1,000 employees, before hiring any HR talent. (Me.) They did fine because they were careful to follow both the letter and the spirit of the law, they treated their staff well, the market and their place in it was pretty stable, and they had strong and experienced line managers for the most part. They did a lot of things right.

A high-leverage internal person can be a huge asset. If the missing skill set I mentioned above happens to look like HR, then go get a rocking HR leader — but don’t go overpay someone to do your paperwork and know the law. Get a leader who will help you take your company where you want it to go.

What is the biggest challenge that hiring managers at young companies will face in 2010?

Many young companies are still facing serious issues with their lenders or their investors, and they will have a really hard time making promises around company stability. If you’re trying to hire experienced, strong candidates, you have to be able to show that their company is stable, has growth opportunities and has the resources required for the candidate to be successful. Don’t sugarcoat challenges, though, it sets up a terrible dynamic if a new hire feels they were misled.

If you’re hiring less experienced staff, it’s more critical than ever that you hire for flexibility and the ability to think on their feet. The days of org charts and clear, stable boxes leading to career silos masquerading as career ladders are over, if they ever existed at a young company.

If you’re trying to retain staff, the future value proposition needs to be clear, honest and, if not exciting, certainly brighter than it may have been painted in 2009. Current staff need to hear some sincere gratitude for the sacrifices, hard work and flexibility they have already shown and most likely will have to continue to show in 2010.

What’s the biggest opportunity?

Of course, hiring managers have an opportunity to pick up talented people who have been shaken loose in the last year or two, but, more importantly, they have a great opportunity to realign their company culture toward a future that is less about perks and comfort and more about market share, margin, and their communities of co-workers and customers.

If they’re willing to lead by example and really get on with this “new normal,” rather than pretending that things are going to go back to the way they were, this is a fantastic chance to learn from what did and didn’t work in the past, what may work in the future, and move that way.  A concrete if minor example is getting rid of Microsoft Office and going with Google Apps. Why pay those exorbitant licensing fees just because employees are more comfortable with it?

What’s the most important step a small, fast-growing company can take to build its leadership pipeline?

No matter how fast you’re growing, be careful who you put in those roles. Make sure they have some self-control, goals for themselves that they fulfill on, that they are effective at leading themselves, before asking them to lead others. Then use projects, informal mentoring, immediate informal feedback, some well-timed tips about delegation and time management, and the opportunity to reflect, learn and share learning with others to develop them as leaders. In general, giving people new experiences and both the opportunity and the expectation that they will reflect and learn from it is much more effective (and much less expensive) than conferences, seminars, consultants or books.

Image credit, pagadesign, via iStock