Processes make inexperienced people wiser, and experienced people dumber
Process can stop a salesperson from discounting a product below cost price, a professional services consultant from overpromising, or a software engineer from implementing a feature with security or privacy flaws. In these scenarios, a process is a tool to make inexperienced people behave like their more experienced colleagues. So, a process can be a sort of institutional knowledge that the business imbues on its team to ensure high-quality work and avoid painful mistakes.
But process can also do the opposite. When an individual is wiser than the processes they have to follow, they behave like a less experienced person. A salesperson who knows an aggressive discount today will lead to a sizeable expansion deal in just a few months loses their opportunity. A professional services person with an innovative idea that could dramatically expand their company’s total addressable market cannot pitch this to an ideal early adopter. An engineer with an innovative and assuredly secure way to solve an urgent problem must wait for approvals to deploy their fix.
In a sense, each process is an equaliser: processes make everyone average. For a team that is skewed inexperienced, this elevates the team’s overall capability. For a team with wiser constituents, it dumbs them down. Put more crassly, standardisation, in principle, makes some people dumber and other people smarter. Fortunately, I have some practical advice for startup leaders wrangling business operations.
First, hire great people. Startups are resource-poor, so every team member needs to be excellent. Sometimes, this means inexperienced people with fantastic natural capabilities. Sometimes, this means paying extra for experience. Either way, great people make fewer mistakes, removing the need for arduous processes.
Second, consider the impact and likelihood of a hypothetical mistake before implementing a process to avoid it1. If something is unlikely to happen and is relatively low cost, there is no point in actively avoiding it beyond the basics of hiring good people and promoting common sense decision-making. If a mistake is likely and expensive, you may need a process to resolve it. Don’t implement a process just because one person made a mistake once. If it’s unlikely to happen again, it’s not worth slowing the team down.
Third, you should focus your operational innovations on teams composed of inexperienced and entry-level roles. The average experience level of an engineering team is likely greater than that of a customer service team, which is likely greater than an outbound sales team. Given standardisation helps the inexperienced and hinders the experienced, teams with less experience should have more processes.
Fourth, empower leaders to break the rules. Even the most inexperienced team should have a wise and capable leader. So, when a team wants to breach a standard to deliver a greater outcome to the business, there should be a way.
Finally, prune your processes. Mature organisations move slowly because of institutional baggage. Just as a dynamic and engaged parliament should repeal laws that no longer service the public2, operations teams and team leaders should regularly simplify the ways of working for their teams.
Footnotes
In this article, I explain how startups should focus their research and experimentation on high-risk items where the cost of being wrong is significant. This article includes a graphic (
Figure 1) which can also be used for determining whether a hypothetical mistake warrants a process. ↩︎To avoid bureaucratic calcification, Texas automatically sunsets state departments after twelve years if they are not renewed by the legislature. ↩︎
Privacy and terms
I care about privacy as much as you do. I will only use your email address to send you this newsletter or to reach out to you directly, and you can unsubscribe at any time. I will not share, sell, or rent your email address to any third party, though I do store it the software I use to dispatch emails.
The information provided on this blog is for informational purposes only and should not be considered investment advice. The content on this blog is not a substitute for professional financial advice. The views and opinions expressed on this blog are solely those of the author and do not necessarily reflect the views of other organizations. The author makes no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this blog and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use. The author may hold positions in the companies or products discussed on this blog. Always conduct your own research and consult a financial advisor before making any investment decisions.