The top lie startups sell you

Startups say a lot of things to get you through the door. We have the best kombucha, benefits, product, talent, culture, people, etc…. But I think the top lie they sell is this:

We are a true meritocracy.

Reality is that no one operates at a true meritocracy, but everyone aims to be meritocratic. If any startup thinks about what a true meritocracy entails, they would want to be as far away from that as possible. In order to reward people based on their skills, ability and talent, the organization needs a standardized and effective way to test their talent. This means:

The ultimate meritocracy is pure bureaucracy.

The government — beacon of a bureaucracy — is truly a meritocracy. Everyone is classified into a grid, their future pay increases are clear. Promotions are clear. However, startups and governments are on opposite sides of the spectrum. No startup wants to have red tape to hamper growth, freedom, innovation and opportunity. In striving for meritocracy, startups operate between these two spectrums: relational and independent.

On one end of the spectrum we have relational where who you know and who you are is the foundation of trust. On this end trust is built through loyalty. However, if you are too relational it becomes a world of incompetent leaders, inept getting promoted, relationships over talent, and good people begin to leave — an overly political environment — adhocracy.

At the other end of the spectrum is independent where data is the foundation of trust. However, when taken to an extreme, data comes before a relationship and everything becomes rigorously tested where verification becomes the stamp of truth. In this world the leaders are skillful; however, incompetent at making decisions and leading the organization. They will test themselves into the future rather a vision that connects the dots. People become boxed in their current role and level because their data has not fit the standard. People get bitter, malaise sets in, and good people begin to leave — an apathetic environment — bureaucracy.

Most startups aim to operate in the middle taking things from both sides of the spectrum and applying it to the organization. However, oftentimes organizations will apply the wrong spectrum to the wrong activities. For example, hiring has the largest impact on an organization, yet organizations continue to hire in a relational manner, depending on if the hiring manager and its project team “liked” them.

When we were growing, at times we would place growth over quality. This caused problems for us later at the most atomic level of the organization. We would bring in a candidate for a certain project and then someone from that function would hire them. A matrixed hiring decision — like that wasn’t a warning sign. One time there was a candidate which one team loved and the functional lead who was on another team disliked. The project team one out. A few months later, the project was cancelled and we worked on transferring this person. Soon many HR issues would creep up as well as the issue began to spread to the entire team cause a stand still for weeks on end. Ultimately organizations are fluid, projects spin up and down but is is all in service to the company. And that is how we should have hired — in service to the company.

Create a hiring process where situations like this can be avoided. This means a centralization of hiring decisions and and a decentralization of input in a standardized manner. Hiring becomes less relational and more dependent on data out of the hands of the hiring managers and teams. This means you are hiring for the company not the team. It should be a company culture fit, not a team fit. This also means that as an organization moving people around will be a lot easier, less churn (voluntary or involuntary).

The costs of this, is that hiring is slower as well as for some (specialized) roles there is some specialized talent. Managers have less autonomy and some would argue less accountability if they cannot hire their talent. However, if we draw an analogy to the parenting world : there are XX million parents in the world that the only thing they cannot choose when their child is born, what gender the child is, what their personality is, how the child looks — the only thing the parent can choose for the child is their name. And, generations have seemed manage just fine developing and managing someone they did not choose.

Firing someone in organizations make it as slow as possible for risk reasons — which is usually the wrong reasons. (Please note that depending on the type as well as phase of the organization risk tolerance levels are different.)From a human perspective it is a purely data driven process that is a large spectacle and waste of time. The manager begins to have behavior issues, goes to HR. HR asks them to document it and put them on a performance improvement plan (PIP) for some period of time, usually 30 days. This is to ensure that them opportunity to communicate clearly. However, oftentimes these PIPs never work. The manager wants to terminate the employee and it is all a show, so wouldn’t it be best to just put the employee out of its misery? The answer is yes, and YES if the manager had been communicating and developing this employee all along. What really should happen is a more adult conversation at the time when a PIP happens and both sides agree to to it not working out and the opportunity to end the relationship should be given right there. If both sides do not agree, then you should allow the PIP process or allow the employee to leave. But, you should always aim for “no surprises” — this builds a culture of trust rather than fear.

When it comes to operating between these spectrums, continuously analyze on what fits for your business and phase. As a whole, do not aim to be on one side of the spectrum, just in the middle — taking from best practices from both sides for your activity at hand. When thinking of talent — don’t just think about a person from a skill level but also leadership talent. Oftentimes that is not included in the definition of skills or developed. And please whatever you do…do not become a meritocracy!

So next time when a startup is telling you it is a true meritocracy, ask these questions:

How do you define and measure talent?
How is that definition and measurement applied to everyone?
Are there exceptions?
Who is considered top performers? How does the organization focus on them?
What does high potential look like?
How does the organization value relationship building?

And, If any startup tells you, “we hire the best talent” — for God’s sake, please ask them how they define the best. Note: This can be applied to any organization that uses best as a modifier when selling things.

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