Hello, and welcome to a new edition of Expander. I’m Abhishek, and each week I share practical ideas on doing product, measuring what matters, working with people, and growing a business. Send me your questions and in return, I’ll humbly offer BS-free actionable advice. 🤜🤛
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Today, let’s talk about, as you’ve guessed it, processes. More precisely, processes, systems, and protocols.
I have worked with companies with well-defined processes. I’ve worked with companies where there wasn’t any process, structure, or system in place — which they claimed made the flow of information and ideas fluid and as natural as possible. If you ask me, I’ll pick a company with a well-defined process any day. But before I make my case, let’s hear it from Barack Obama himself on the importance of a process:
…because every tough decision came down to a probability, then certainty was an impossibility — which could leave me encumbered by the sense that I could never get it quite right. So, rather than let myself get paralysed in the quest for a perfect solution, or succumb to the temptation to just go with my gut every time, I created a sound decision-making process. … Then, no matter how things turned out, I would at least know I had done my level best with the information in front of me. There was something liberating, and humbling, about leaning on a process.
Even though the fate of a nation (and by extension the world) and a billion people don’t depend on the shoulders of a company, it’s important to know the importance of having a process in place.
All companies have good intentions, but if there’s no clear process, it’s equal to having bad intention. Without a proper process in place, there’s always ambiguity, lack of clarity, and no forward momentum. Companies that don’t have a process (on paper) have a process (in practice) — it’s just not consciously designed, and therefore has a lot of side effects. Let me explain with a practical scenario.
Say, you are a PM at a startup of 30 people, where 3 people report to you. It’s appraisal time, and you’ve to rate their performance. What do you do? You certainly can’t remember all the remarkable or poor stuff they have done in the last 12 months. There’s a good chance you remember the bad stuff more than the good. On top of that, what if one of your reports joined only a couple of months back, would their review process be different from others?
Whatever it is, most managers sit down and have a little tête-à-tête with their reports, and review them based on recent impressions instead of overall performance. More gut than data. What a waste! No wonder all employees hate their managers.
The shrewd employees know that since appraisals suffer from recency bias, they can double down on their work when appraisal is near in order to be in their manager’s good graces, and (believe it or not) this works most of the time — kind of like a political party with their good work, social improvements and rallies just before the elections.
But I don’t blame the employees. They are exploiting the loophole because the system is a loophole. I don’t blame the managers either, especially the new managers. They have no ill intention, but sadly even if they think they are doing their best, it usually isn’t enough.
The experienced managers create their own review process, which if you ask me is a step-up. But if it’s a slightly bigger company, say with 10 managers, all of them would have separate processes and yardsticks of measurement, and everybody in the company would be measured by different standards. All because there’s no established process.
The reports either dupe or bitch about their managers and the appraisal system; the new managers depend on gut; the experienced managers bring their own process from their past experience, which may or may not work in the new company; and no one is held accountable for anything. No wonder office politics becomes a thing.
That is just one scenario, there are countless others. What do you do when there’s a problem (of whatever kind)? How do you solve it? Do you know whom to talk to? How do you know it’s important enough to be discussed? What do you do after you’ve solved it? Do you announce it? To everybody, or just your team? More importantly, what do you do when you cannot solve it? Do you hide it? Most likely you will, because if there’s no protocol, nobody will notice.
There’s more. How do you pitch new ideas? What do you do when scope exceeds the deadline? What do you do if you want to get in touch with somebody in the company? Do you ping them, send them a calendar invite, or do you call them and ask for coffee? Do you copy your boss in the emails? Do you copy the receiver’s boss in the emails?
Setting up a process takes away guesswork, even if it’s as big a job as letting somebody go, or as small a job as conversing on Slack. Guess what, guesswork wastes time. Process equals productivity.
Now, all this is obvious, right? Companies need processes, duh! But in reality, most companies postpone it for as long as they can. Why? Because they don’t realise its importance until things start to go awry. Because when you are a 10-people-company, there’s no (visible) problem even if there’s no process. But when the team grows gradually, the cracks start to show.
But even after that, they blame it on people instead of setting up a process. They just dunno how a process might help. By ‘they’, I refer to the leadership — especially the cofounders of a company.
The best time to design processes, systems, and protocols is when the team is small, ideally before product/market fit because later it would be sheer chaos, and there won’t be enough time.
But I agree, it’s kind of a headache to design a process. It’s a huge cognitive load, and it doesn’t give any immediate result. Founders would prefer to work on the product rather than the process.
Having a bad process is better than having no process because a bad process can be challenged and rectified. But the fear of having a bad process is no reason for not having any kind of process at all.
Process is what you practice. What you practice becomes your culture. To make a cohesive culture, it’s better if everybody follows the same process.
The first step to create a process is: document practices that are already in place — from (compulsory) company processes like how to prepare and conduct meetings to (suggested) personal processes such as how to schedule your day.
In a startup, what the founders practice is based on the values they hold dear to. If they are competitive, the decision-making process they follow will be more aggressive and competitive. If they are analytical and data-driven, the company is likely to make metrics-based decisions. They just need to document that, ideally in the form of a company handbook. When the company scales up, this would be a godsend for new hires.
This may not be perfect (and it doesn’t have to be), but it gives the team a starting point. Otherwise, people will create their own processes or imitate whoever they see or interact with the most, and this will only create a fragmented culture, which brings me to the second step: keep on iterating.
As the company grows, the needs would change. When it’s a 10-people-company, they all see each other daily, and work together as a team. But in a 30-people-company, many smaller groups start to emerge, and the folks don’t interact as closely as they used to. What worked before doesn’t work any more. All processes don’t scale, and that’s why creating a process is a perpetual activity — one worth investing in.
Founders need to invest time and effort in establishing a process (and I cannot stress this enough) because the difference between a company that has a predefined process and one that doesn’t, is stark. It would be utterly stupid not to have a process, no matter what the “reason” or excuse.
If Barack Obama, one of the busiest persons in the world, could take the time and effort to create a process to get things done, so can we.
Talk to Me
Do you agree with what I said, or do you think otherwise? Send me counters, comments, questions, and other ways to run a business. 🙌
Until next week,
P.S. I also write The Sunday Wisdom, a weekly newsletter that challenges the norms and learned beliefs about how the world works. Delivered every Sunday at 6PM IST.