Archive for the 'Process Maze' Category

HBR – How to negotiate with VCs

Update: 18th Oct 2013 – The slideshare link seems to be disabled. Please read here.

Excellent article on how to negotiate with VCs – valuation is just the tip of the iceberg. Other terms, as well as ensuring alignment through the negotiation process are far more important.

Read on…

HR Ideas for Business : 6-10 : Induction, Probation, Hiring, Grievance, Expectations

Here are the next 5 Ideas for better Business performance in building Human Synergies. In this posting you would find basic information about Induction, Probation, Grievance Redressal, High Requirement Hiring and Setting Expectation of Performance. These are very day-to-day issues and needs to be addressed on the go.  Please do read and add new inputs and perspective to make this blog a repository for simple & practical solutions.

6.Induction for Performance : Induction of a new employee into the system is the first step for building Human Synergies. Induction is a process which would help the new joinees contribute the best by understanding the organisation and its systems. Organisation helps the new joinees to understand the history, policies, procedures, cultural values along with some bit of experiential learning.  This process can be simple to complex based on the person / seniority and/or implication of the decisions by the person (if they are serious more days and more in-depth induction).  Since we bring people into the organisation to perform and deliver the best, Induction would help that process effectively.

Idea: Induction plan can be few hours to few months as per the intensity of the requirement. Create a standard template for a day or two and make sure you execute as soon as you have a new joinee. You can discuss with your senior team members and set expectations of information sharing and experiential learning. Eg : The template can have columns like Date, Function/Department to visit, person to meet, Questions to Ask and time(from-to). Do not forget to ask the Inductee to ask for feedback report at the end of those few hours/days.

7. Probation: Probation is primarily to help the new joinees to get used to the environment and fit into cultural of the organisation. It is noticed that there are different set of probation methods in organisations. Some have a probation for junior level people. Some organisations follow for all the levels.  It is noticed that however the experienced or accomplished in other organisation does not guarantee the same performance in the new organisation.  The duration of the probation can be defined based on the general time frame that a new joinees get adjusted into the new system.  Based on the organisational need and the general time taken for adjustment can be considered as a yardstick in defining the duration.  There is a perceivable notion that Probation confirmation is linked to the increment/revision in salary.  This is totally not true and should not be linked to monetary gains, so that the sanctity of organisational fitment can be managed.

Idea: Set some basic parameters to help assess the involvement of the Individual into the organisation.  An open-ended one page report from the Supervisor would help in confirmation of services to keep it simple in consultation with the team member. Its also important to set the next set of expectations and measurable outputs agreed at this time.

8. One-time High Recruitment Needs: Many times you may have a need to recruit large pool of people at once.  This number would vary from organisational size.  Smaller companies to have 3-10 number of requirement may be high.  For large organisations the number could run in Hundreds. You can segregate the positions in different buckets of experience and expertise and define a different strategy.  Like for all fresh positions you can approach a college for database or for organizing interviews. For experienced you may want to use the position posting and a database access service for a short-term, with a job portal to make sure you reach the target.  Or alternatively your own employees can be of great help with little focus.

Idea: Call any Recruitment Agency and negotiate a different model, where they would work on retainer basis to close all the positions within a specific time period.  This is possible and doable for the Recruitment Company. If you really assure some basic fee for their efforts, they can do a good job than just on success based in such situations.

9. Performance Expectations:  Setting the performance expectations at each level is important. It not only important to set the expectations but also to share what outcome you would like to see as a performance. for example: for a sales person Revenue & Collection %age. Production: Production Output in numbers, Wastage %age to be maintained, For HR person : %age of positions to be filled in days from requisition, employee turnover to be contained at a level.

Idea : For every job/ position / individual define only two key components as output that you would be expecting and communicate in writing. Set a frequency of review to ensure that your single point of agenda is to discuss and see the progress.

10. Employee Grievance : Grievances typically are handled through a process of grievance handling procedure for large teams. However, In case of smaller organisation, Identify the problem related to Work norms  infrastructure, performance,Salary, increments etc., and appropriately respond.  All the policy related framework done by HR need to be interpreted and clarified.  Also see that if you need to resolve with the appropriate documents/ approvals.   If it is related to interpersonal relationships, work related issues you may want to involve the manager to get the right picture and help them to resolve.  This is a quick overview and specific problems can be handled based on the need/situation/background.  One thing for sure, do not jump to resolve issues… identify the core of the problem and involve the appropriate authorities to make sure that grievance is resolved to the best of organisational capabilities/boundaries. Finally, never think that you are going to satisfy all the parties 100%….

Idea: If you really work on a detailed grievance redressal policy  would be great. However, if you do not intend/can’t define, then Identify last one year issues and resolutions. Set some basic guidelines in such cases if repeated and communicate to the teams in common forums/intranet/meetings etc.,.  For any unresolved issues, set an escalation point and also what level it would be final and binding for resolution.

100 HR Ideas for better Business : First 5

I was thinking within myself, if I have to give the best reading experience, what is that I can do differently on this Blog. I realized that tons of description may not excite any reader. Keeping it simple and sweet is the only way.  While we want to give the best back to the readers, I decided to write a series of the 100 things that a business owner/CEO/Family Business Owner could do to improve his/her business with specific focus on People Management for better business.

I would be writing small bits of inputs/advise for business owners ,which could be used with ease. I would try not to cover these inputs in a sequence of the HR Process but based on the experiences of  our teams from time to time. I would plan to summarize at the end to compile the series in an e-book for future readers.   This way I would cover the important things first and may be of use for the readers.

In each of the posting I would like to share 5 such Important aspects with Inputs & Ideas if any. Please note these are not necessary in an order of Induction/performance during the course of building business. Use your discretion. If you have any question at any point please do write to me at :  gr(at)husys.net

1. Vision & Mission : One of the most important ingredient of organisation building. You may want to focus on what you want to do in future and how you want to achieve the same.  If you are a start-up  you can build this with a team of first few and work with rest to improve and achieve the same. Making sure that every individual is chosen to fit into this framework and win in long-term.  Please do not hesitate to part with people who may not fit into this framework. Link every of your actions/processes/policies for present and future.

Idea : You may build this including the core team and someone who can see your vision. Alternatively can use an external expert help in facilitating this process (Please do not ask external facilitator to draft for you)

2 – Building the Long-term & Short-term Objectives : While you have a vision and mission for your organisation. Even if you do not have a clear Vision & Mission Statements (In most of the organisation its true that they do not have a formal vision & mission statements). Set your clear goals for short-term (for Financial year or Calender Year).  Make sure that the Objectives are Simple, Clear, Time Bound and measurable.  Make it convenient for people to relate it to performance.

Idea: Build at-least Revenue targets with timelines(Sales, Collection etc.,), New initiatives in People practices, Processes and Future Expansion. Make sure that the same is communicated through a mail / team meetings / all employee meeting.

3. Set Expectations & Communicate Clearly: Its always best to set the expectations of performance at the beginning of the relationship with any employee in organisation. The longer the relationship without set expectations, difficult to agree/accept the reality of business.

Idea : Spare few minutes in writing the expectations and end output that measures the success of the individual on a peace of paper and Document(body of text) through an email. This 10-20 minutes of interaction and documentation can save many business days.

4. Share the Business Realities : Do not hide or hesitate to talk about your business situation with the employees. I am sure they are equally aware of what is happening in business. Spare few minutes of time to share the business realities during regular meetings and send common notes through email. This can include information about objectives achievement, new happenings, new competition and any other challenges that the organisation is going through. Do not hesitate to share the difficulties and people would come forward to help.  You would have people come forward to extend help who relate themselves with the organisation

Idea: Set a frequency of communication based on the communication and type of groups to be informed – function, divisions or overall organisation. Eg. Organisational Update to everyone by 5th of every month.

5. Ask for Help : Do not hesitate to ask for that extra-mile help from people who work in your organisation. If you have shared your vision, mission, business realities frequently, it would be easier for seeking such support. You don’t do that every bit of business deliver anyway, you need people to run the business and take those right steps in the path of growth.

Idea: You can ask for any such support from the team immediately reports to you.  In turn encourage the team to take further steps based on the ground realities.

Three Things that One can do to build Second Line at Small & Medium Business (SME / SMB )

Building Second Line is the biggest challenge in SME’s. This may be due to the focus of entrepreneur which is  very internal and personal. Development of Second Line needs a broader outlook and ability to think and create an environment of trust.  Its also to do with the openness of  SME owner to create wealth for their future leaders along with risk taking ability with people.

 


Identify: Not that every employee who joins you would grow to be a Second Line material. You need to look for the attitude, commitment and passion for your business. Put them through some tough situations of business need and take risk of testing. Identify few potential employees to be able to take the next level of responsibilities with Accountability.


Build & Encourage: After you identified the potential, you can use various occasions to tell them that you are looking at them to grow their career. Here its important that you make it very clear that they need to build that competency and move towards achieving growth. Make it clear that “Its Not Easy Cake Walk“.  Do also make sure that no false promises in terms of position, money etc., at this stage. Be firm on many decisions where you have to be assertive.  Encourage them to take up new and self improvement goals for constant improvement of knowledge and skill.   Also assign some of the futuristic targets and help them to achieve. Take that bit of risk if they fail, plan for backup plan from your end.  Building & Encouraging is all about building the mutual trust and ability to go that extra mile.  


Sustain : Have clear goals for achievement at each stage & review. Set certain higher standards in moving the people to next level. The ideal situation is that the employee can measure and update you on the status of his/her growth as planned. You need to be a mentor and translate your knowledge without being threatened about competition.   Always remember, we out grow our capacity and we need others who have skills to takeover for better growth.

India Expansion – Acquire & Manage Culture not just the Business

In recent months I have had the great opportunity to work  with organisations from around the world who have expanded their global footprint  through Joint Ventures/strategic Buyouts or Acquisitions.  I am happy to share, based on my experiences, some of the key elements/experiences which are important steps in business success in these types of situations . These are  indicative and not an exhaustive reflection of my experience.

- Managing Business & People independently : Many businesses identify a business leader or a senior operational director to run the operations(Hired locally or deployed from home country). However, they tend to leave thepeople part of the business decisions to be  handled by the home country HR professionals.  This makes the proposition very difficult. Firstly the Host country manager would focus on running and stabilizing business results while the HR of Home country struggle to understand the nuances of Indian business and its complexities related to people.

They face difficult situations in understanding and comprehending the Compensation Bench marking, hiring practices & success, Performance expectations Vs. Output etc.,

- Right Person but Wrong Job: Rightly many organisations deploy an Imported Indian(Indian side) to run the business when they acquire a stake in or a business in India. Many times the appointed person would have not run a business in India before  or even, in some cases,  not even run a business or business unit  in the home country. Many who work outside India may not be able to appreciate the way things transact in India and have limited ability to  add value to the Indian business  in current situations. This presents a significant challenge for this Manager deployed in India to run the business.  In the current Indian business scenario  the sooner the person comes to terms with situations and can impart information to help  top management appreciate the complexities of the  way forward the sooner he and the business can  be successful.

- My Business My Way : Many organisations would like to run their business the way it was run in their home countries.  They may be successful in their business the way they are in that country.

However, the Indian context is very different and the need for adaptation to the Indian business and  cultural impacts may be very very high, if the business is to be  successful. The entire ecosystem of business runs the way the India Culture has been imbibed into the business over 100′s of years.  The successful businesses have been the ones who adapted to the culture of India and conducted their  business around their single product or service  differentiator that is their unique value.

Prepare to Conquer:  It is helpful for the business  to look at some of the above issues  in their strategic and preparation planning and create a clear cut orientation and expectation setting practice  from the business point of view to help build a more realistic frame of reference.  . A clear understanding about the business audit from a cultural perspective (apart from the accounting,business) before even venturing to partner/acquire/buy/invest would help.  The Culturally  audit through of  the people practices, business practices  and  behaviors toward business and the preparedness for next level of expectations and delivery would provide a much more realistic approach to the market.

Have a great year ahead !!!

Feel free to comment or write to me at gr@husys.net

Missing Link – the HR plan

Having managed HR departments for over 110 companies in last 5 years, I am amazed to see the consistent absence of comprehensive HR plan inside or even alongside the annual business plan. And this remains the top reason why goal alignments, reviews and resource agility remains perpetual challenge. Most managers end up reacting to situations rather than anticipating and large part of workforce has no idea whats happening around. How difficult is it to give one week of think time to top management and put together clearly aligned operating plans that include people plan (numbers, roles, goals, metrics, reports, rythms, huddles, key programs, training runs, content and cheer)?

Problem with not thinking through enough, is that then, doing and thinking goes on together, forcing execution teams to either take random shots or keep running back to top for decisions, both create huge risk to plan achievement.

Incidentally, its been easier to put this together for privately funded companies as the basic discipline of planning and review exists quite rigidly, though ensuring that HR plan isn’t given a miss is still a task. Companies run by professional CEOs come next and family businesses remain a tough one to crack inspite of their sincere intention.

Planning discipline impacts ability to retain talent to a great extent as it simplifies everyone’s job, if HR teams are fully engaged to operating plan and there is clarity on annual HR plan, whole organization achieves amazing operational seamlessness. You still have two weeks to go for another execution run to begin, it might be a bit last minute but you can save the year.

Cheers
Feel free to comment here or write to me at prashant@plugHR.com

Delhi is the New Hub For Techs

I read this interesting article recently- about how Delhi is the new hub for tech startups– in Wall Street journal.

I am curious- what are the experiences/opinions of other members- who may have worked in multiple Indian metros on the subject.

Below article is a mirror of article in Wall Street Journal: http://online.wsj.com/article/SB10001424052970204485304576644220533569618.html
Delhi is the New Hub For Techs

MUMBAI — The National Capital Region, as Delhi metro area is known, has upstaged Bangalore as India’s biggest hub for technology start-ups, according to a survey released this week.

At least 220 technology start-ups were launched in the Delhi area over the past three years, compared with 159 in Bangalore, according to the survey conducted by YourStory.in, which tracks start-ups in India.

Of these, 49 start-ups in NCR attracted investors, while only 18 were able to raise funds from investors in Bangalore.

The survey is based on data from 1,057 start-ups across 16 cities. Most of these ventures are less than three years old, and 15% of them are older.

Launching companies is easy in Bangalore because mentors and facilitators provide a mature entrepreneurial ecosystem, but sustaining these ventures is difficult in the absence of financial support, said Shradha Sharma, founder of YourStory.in, which claims to have the biggest database of fledgling firms in India.

“Startups come up crazily in Bangalore and die just as fast,” Ms. Sharma said. “New Delhi and Mumbai companies have more access to capital than Bangalore. Seed- and angel-funding is minimal in Bangalore. Most companies still have to come to Mumbai for funding.

Also, companies in New Delhi’s suburbs of Noida and Gurgaon usually are started by professionals with experience working for multinationals. “The ideas are more mature, therefore the quality is high,” she said.

Startups in Delhi stand out in terms of business focus, said Ashish Sinha, head of Pluggd.in, which also tracks startups.

Angel Funding Framework – Structure

In my attempts to engage in angel financing, I have seen the typical concerns that potential angel investors have. Many of these have to do with the investment parameters, and figuring out how investors can get their money back (or returns) – especially given the inherent immaturity of these businesses in being able to outline an exit potential. Investment then gets limited to businesses where investors perceive a high probability of creating a breakout business. Many other diamonds remain in the rough. I have been thinking of ways of addressing this issue so that seed financing is available to a larger base of startups. This should allow for great businesses to “emerge” rather than being “envisioned”.

To start, I am sharing some thoughts on a potential investment structure that should allow this to happen. There are several other elements to making this successful, besides the investment structure, and I will talk about some of those over next few weeks. In the meanwhile, comments and critiques are welcome on this – both from entrepreneurs and angel investors!

“Standard term sheet” suggestions

TheFunded has published what it believes should be a standard termsheet in venture financings. Their argument is that the following balances the rights and incentives of investors and founders well, and the negotiation should be limited to valuation and amount being raised. Interesting point of view.

FFI Plain Preferred Term Sheet

Chris Dixon has earlier proposed his (similar) “standard” termsheet here.

These are all commendable efforts and in my view, in the right direction. The issue arises when certain provisions are more valuable to one party than other (due to differential view on the business, different degrees of experience etc) – so in some cases, founders may be optimistic to not care about participation, but may want higher valuation. Or, the VCs may perceive certain additional risks and may want protection against those. Such deal-specific characteristics encourage “trade-offs” amongst terms – a la “if I have to offer a higher valuation to be competitive in the deal, let me add more participation”. A negotiation process in the end is about trading off what is less valuable to oneself for something that might be less valuable to others.

Would love to get thoughts from the readers on where they tend to fall on this debate.

Canaan Entrepreneur Pitch Workbook

Here is a short presentation that outlines the information that we, at Canaan, like to see in business plans. It is also a useful tool to think about what questions one should try and answer, besides just ensuring that a certain format is used. Personally, I don’t fancy paper copies much, especially when all of the audience is in one location, but other than that, this is a good starting point for discussions.

Canaan Entrepreneur Pitchbook
View SlideShare presentation or Upload your own. (tags: small management)