New ventures begin with an entirely empty slate: no products, no customers, no desks, no organization charts, no established procedures for creating value. Only blank pages and empty office space. This is part of the exhilaration, the chance to do things better and more simply than the last time. Of course, your founding team has lots of experience: ideas about how things get done. As the product champion, you’ll almost immediately be defining what your startup makes and how it gets delivered. Generically, “processes”.
If you’re lucky enough to have joined a winner, things will grow. Quickly. As a startup goes from 15 employees to 40 to 100, there are increasing calls for building repeatable processes. This month’s byte is about creating a few good processes and avoiding ones that add little value. Generally, I’d break these into two groups:
- Constructive processes How do we get things done? How can we do them better? These include fundamentals like design documents, sales territories, and price lists. No business can function without them.
- Defensive processes How do we avoid making mistakes? Slanted toward control and compliance, these include sign-off on purchase orders and cross-department review of product readiness.
Of course, both varieties are necessary. An energetic team should be focused mostly on constructive processes — getting something done more quickly and more correctly — with the least effort spent on jumping over self-imposed hurdles. When mistakes are made, though, it’s easy to build ever-more-perfect ways of impeding your work.
How About an Example?
First, let’s consider some positive, constructive processes that are easily neglected:
- Bill of Materials
If your product is even slightly complicated, it helps to know precisely what’s included. Customers will ask, manufacturing needs to build it, and Engineering should know when all of the pieces are ready. A BoM settles hundreds of seemingly simple questions across the company. The hour spent getting this right is paid back many times over.
- Support escalation process
Who should customers call when they have a problem? During what hours? What should your support team do with issues that can’t be immediate resolved? If the customer is still unhappy? This doesn’t have to be complicated, but needs to be crystal clear. I’ve been on too many calls with frustrated customers who ring every executive at the company — in turn — and demand immediate action from each. Few things are less effective than a swarm of VPs interrupting the real problem solvers for hourly progress reports. Knowing who owns each phase of a problem keeps your team focused on useful activity.
- Target Segments and Channels
This seems obvious, but most startups are afraid to focus. Some of the sales force is selling directly to US small businesses, while others are calling on European telecoms resellers. Even if you turn out to be wrong, you should decide on an explicit shift after you’ve gathered some real market experience. It’s worth having one person in Marketing or Business Development who catches oddball opportunities. Someone to investigate what you’re shielding everyone else from.
You get the idea. In contrast, though, think about the last few minor screw-ups in your company and how managers reacted. Consider these defensive clunkers:
- Triple-checking customer orders
A fair portion of incoming orders arrive misconfigured, or have the wrong prices and discounts, or use last quarter’s part numbers. Our order admin team doesn’t always catch problems, so we’ve added a second (and third and fourth) review of every order. Your CEO declares that “we’ll keep adding staff to Order Entry until every shipment goes out correctly.” Defensive? Sure. Good investment? Probably not. Wearing your ‘product champion’ hat, you should be looking for ways to avoid the cause of this problem, not the symptom. Perhaps you need preconfigured bundles that meet actual customer needs. Or clearer channel discount policies. Or fewer price list updates. Maybe it’s time to drop a few slow-moving products entirely. I’d bet that both Sales and Order Admin know precisely why customers are unable to ask for the right combination of stuff, and are waiting to tell you.
- Copying everyone in Marketing (or Sales) on everything
As departmental staff expands, several people may be working on related projects or talking with the same customers. Resellers get confused about where in Sales or Marketing to call. Some managers decide the best solution is to send ever-more-detailed status reports to increasingly wider audiences: “We need daily project reports from each of you to the rest of the department. And all inquiries to our email@example.com alias should be copied to the entire Sales/Marketing team.” Instantly, your inbox (and outbox) are crammed full of CYA messages. The hours each day you spend skimming each others’ status reports increase frustration and resentment, but not productivity or teamwork. Better solutions would start with a sensible division of labor, clear project ownership, and a single person who can sort incoming inquiries. As your company grows, a simple “who does what” chart works wonders.
- Tightly Managing Office Supplies
If you’re paying knowledge workers to be creative, they need reasonable access to PostIt™ notes and dry-erase markers. Even if a few pens wander home from the office. Enough said.
What’s the common theme? Misdirected energy and misdiagnosed causes. Defensive organizations tend to address symptoms, substituting brute force scrutiny for clear thinking. This is less risky than asking whether a process actually benefits customers. Before putting a cumbersome process in place, someone needs to consider its value. Typically, that falls to a startup’s product champion — whether you’re officially in that role or not. This may a difficult part to play, even an unwelcome one, but will earn you the immediate respect of your coworkers.
Of course, not all defensive processes are bad. Please don’t skip these:
- Trademark searches.
If you’re not an attorney, run new product names past someone who is. Urgency and layman’s logic are poor second choices.
- Software Quality Assurance.
SQA is where you find out if your product actually works, and is ready to ship. Perennially underappreciated, QA are the ones to catch everyone else’s fuzzy thinking. Take them to lunch. Make them feel loved.
- Clear Revenue Recognition Policies. With Sarbanes-Oxley, you’ll want to keep your CFO out of jail. More immediately, you’ll also avoid dozens of angry discussions at quarter-end about which deals earn commission and which don’t. Help your Sales team focus on real revenue. Avoid surprises.
Product champions are typically the first to call for new processes, or best asked to design them. We’re also in the best position to spot procedures that inhibit progress or sap creative energy. The next time you trip over one of these clunkers, look for some alternate ways to reach the same goal. Or abandon it — what would happen if we didn’t write one of our weekly reports? Consider if the procedure you’re inventing answers a real need, or papers over a minor symptom.
Processes are not naturally good or bad. It’s all about results, effectiveness and motivating the right behaviors. Especially at a startup, initiative and insight need breathing room as well as rigor.