The biggest mistakes we made in Human Resources while scaling to 60+ employees

The biggest mistakes we made in Human Resources while scaling to 60+ employees

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If there’s one lesson we could impart to other solar installers about our experience building an 8-figure business, it would have nothing to do with software.

Instead it's about one of the best and at the same time worst things about building a business:

Working with humans.

Like Business Guru Jim Collins likes to say:

You are a bus driver. The bus, your company, is at a standstill, and it’s your job to get it going. You have to decide where you're going, how you're going to get there, and who's going with you.

Most people assume that great bus drivers (read: business leaders) immediately start the journey by announcing to the people on the bus where they're going—by setting a new direction or by articulating a fresh corporate vision.

[But] in fact, leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline — first the people, then the direction — no matter how dire the circumstances.

So if you are wondering how to solve the "people" question for your own solar business continue reading:

1. Hire HR Support sooner, rather than later.

Building a small business is hard. Building a small construction business is really hard. Building a small construction business without HR support that is scalable, functional and fun to work for, is extremely hard.

If you ask your average HR professional (and we know because we did, many times over the years), when is the appropriate time to get HR support, they will generally say when you’re around 30 team members. Others will tell you that you need HR support from the moment you want to make a hire, so that you have scalable processes for growth. That may be true for a software company, or a business with limited inventory, vehicles, and other overhead, but it's not practical in a construction business. Yet with so many moving parts, logistics, schedules, and a very specific knowledge set, it’s important to seek HR support early if you want great culture and growth.

If we could do it all over again, we would have hired our HR Support at closer to 20 team members. It’s no small task building a culture of accountability, clear expectations, discipline, and a constructive, positive, fun work environment. You will probably be able to do that pretty well with the first five to ten team members. When you get to 15-20, you’re of course still going to know everyone and feel like a tight knit family. When you get over 20, you’ll start to notice that more attention is required. And when you hit 30, you’ll start to reach that vaunted territory of “unknown unknowns.”

Odds are good that if you’re skilled at installing solar, you’re not necessarily going to be good at human resources.

Now that’s not true of everyone.

There will be a few unicorns out there running a 50+ team member business running HR all on their own. Kudos to those unicorns (and by the way, we’re seriously jealous and would love to chat).

But for the rest of us, freewheeling it on building the foundation of your business is not a good idea.

HR Support creates structure to help you anticipate business needs and reduce those “unknowns.” Starting with the hiring process, HR Support vets candidates to make sure they're serious, motivated, and share company values. HR Support also implements performance improvement plans for those who are underperforming and need coaching. They will help you craft a clear and concise handbook that lays out the rules of the road for your whole team and provide support with everything from terminations to government regulations to what to do when a once in a century pandemic hits.

And more valuable that all of that combined – HR Support will coach you, the business owner, on how to create an employee-centric business.

They will remind you that 99% of people want to do a good job, and just need the tools to get there.

They will implore you to give second chances and coaching to those who fall short, because it’s the right thing to do and better for the business.

They will guide you on clear internal communications so that if someone key leaves the business, everyone understands why they did.

Good HR Support is not just another administrative resource, they are also leadership coaches who give you the tools to scale your business by making it a fantastic place to work in.

2. Create a Leadership Team. Know Your Role. Stay in Your Lane.

Remember when your company was just crawling and everyone said that they “wear many hats”. More like all the hats, am I right?

Those days were fun, and more than a little chaotic. But when you grow to 25+ team members, that is not sustainable. You need a leadership team that includes sales, marketing, field operations, back office operations, and administration. Those leaders need to have very clearly defined roles and responsibilities, or “swim lanes.” Those swim lanes need to have barriers that make it hard to dive over so that everyone stays within their own domain.

But how do you do that?

You start by clearly defining your roles and responsibilities. Sit the leadership team down and ask each team member, “What should be included in the XYZ role?” It may take an entire day of brainstorming , but the result will be that you each know what your roles are. Once those roles are clearly defined, you have to protect the integrity and autonomy of each role like it’s priceless.

While there’s nothing wrong with advising one another in the leadership team, there is something very wrong with making decisions for others on their own behalf. What happens when you become a larger business, is that you effectively are hiring business leaders to operate a “business-within-a-business”.

Do you think that the leaders of large organizations can effectively micromanage their direct reports, and their direct reports? No, not without severely impacting the organization.

Same with your growing small business. You have to put as much faith as humanly possible in each one of your leaders to do what is best for the business.

That means giving them input when they seek it, empowering them with knowledge and insight, and then trusting them to make decisions that allow the folks in their lane to best support the larger business goals.

This can be very, very hard to do as a founder and as someone who ultimately takes on all the liability of the business, including personal guarantees (speaking from our own painful experience here).

However, if you don’t give your leadership autonomy to know where their roles begin and end, then you will find a bunch of “leaders” who do not have decision-making power and are constantly risk averse nor take responsibility or act proactively when they should. That is not a fun place to work. That is also not a productive place to work. That is also not a profitable business!

Take a day and sit in a room and lock the doors with your leadership team, whomever you deem that should be. Define your roles and responsibilities. And then commit to stay in your swim lanes. You will be amazed at the results.

3. Hire Slow, Fire Fast

Okay, we didn’t come up with this phrase.

But if you’ve ever hired fast and fired slow, you probably have a rough idea of the consequences.

When you’re a small business (and you don’t have HR support) you are probably inclined to hire as fast as possible, because you have a pipeline of work in front of you and you need help yesterday. You may also be inclined to fire slow, because you don’t want to lose that help you so desperately need when they slip up.

The problem is that when you hire fast, you get a lot of folks who don’t share your values, who are just looking for the biggest paycheck and not a long-term career path, and who also may not appreciate the shotgun nature of your hiring process. When you fire slow, you give people five, six, seven of those second chances, that fester problems within your company culture, and ultimately degrade it for everybody else.

Hiring slow means that you have multiple interviews with the team members who will be most impacted by this person joining the team. It means that you do a background check (hint: try Checkr for quick and easy background checks). It means that you do employment verifications, and check references, and ask targeted questions to determine if someone is just looking for a paycheck, or if they’re looking for a mission and purpose.

Firing fast means that if someone is not responding to coaching, and is either incompetent or degrading the company culture, you get them out as fast as possible. The only thing more toxic than a person who degrades the culture and doesn’t work collaboratively, is management who enables that person by giving them more chances than they deserve. Imagine you are working with someone who you know has a big ego, doesn’t have attention to detail, and thinks they know everything - and your bosses refuse to let them go because they just can’t bear it, or think they will never find a replacement. Sound familiar?

Like all hard lessons in business, it requires discipline and long-term thinking to make this happen.

On any given day, following this advice will be hard. You will think that you need new resources right now to get the job done, and you need to maintain your existing resources to keep the trains running. But if you don’t see the forest for the trees, you will get lost in the woods.

4. For the love of God, do performance reviews!

Have you ever watched a football game where they never showed the score? Of course you haven’t, because that would be absurd.

Have you ever worked for a company (or started one) where they never showed the score? Of course you have, and it’s probably the one you’re in right now. Most businesses don’t do performance reviews when they are just a few people. That would also be pretty silly, since you’re just trying to survive and get off the ground.

But if you don’t do performance reviews once you have established departments and a 20+ team member business, then you will find that people actually have no idea if they’re hitting the mark or not.

Performance reviews don’t have to be daunting, because they are actually an opportunity for both the person being reviewed and the person doing the reviewing, to give one another honest feedback.

Performance reviews also do not have to be quantitative. They can be qualitative, and more conversational, to foster direct and clear feedback in both directions.

At Ipsun Solar, we use more qualitative performance reviews, so that the whole thing is more dialogue-focused than number focused. This of course is a judgment call (ask your HR support for guidance).

But here’s the thing:

If you don’t do it at all, then all your efforts at hiring for culture are nil because you’re not creating a culture where folks can grow into their roles, their careers, or even having an idea if they’re on the right track at all.

That’s not helping anyone.

Performance reviews are there to help everyone get better, know how they’re doing, and learn from others who may have been in the same position before.

They’re not as hard as they seem, just start with a few measures or questions and get started from somewhere, anywhere. But don’t neglect this essential part of building a human resource infrastructure, or you’ll realize it before it’s too late.

5. Hire From Within

I know, we are officially hitting all the corporate buzzwords in just one article. But this time we really mean it.

Sometimes you feel like you have no choice but to hire externally, and maybe (just maybe) sometimes you may be right. But the vast majority of the time, you should be able to pull from your existing bench to hire, unless it’s truly an entry level position. But if you’re looking at anything other than entry level, why would you not want to hire from your amazing talent right there in front of you?

When you hire mid or higher level positions externally, people notice. To them, it shows that you think they are either underperforming or not up to the task. Start by posting every non-entry level position internally, so everyone knows that it’s up for grabs. You are virtually guaranteed to get several interested team members, who will also appreciate that you took the time to do this, because it shows you are sincere about upward mobility for everyone in the company.

Now this is also something that requires discipline, because the quick fix will always seem like just externally hiring someone with XYZ skills and 10 years of experience. To hire internally, it also means you have to consider cultivating talent over many years, identifying motivated team members and building them up, and also providing company-sponsored training / continued education. That costs money, but I promise you that the ROI is there.

Conclusion: HR is really hard! Start earlier rather than later. Create a leadership team with clearly defined roles and responsibilities, and then stay in your lane (looking at you business owner). Hire slow and fire fast. Do performance reviews. Hire internally.

It takes long-term thinking and intention to do all of these things. But the alternative is constantly fighting for day-to-day survival like a cockroach, and that gets exhausting pretty fast.

If you’re looking for great HR Support, we are happy to introduce you to ours. RCR Consulting transformed Ipsun Solar, and they specialize in helping solar businesses get off the ground with their HR Departments.

The best part is that because they are contractors, they will integrate with your business seamlessly while not running up the costs like a full-time employee. Let us know if you would like an introduction and of course if you like us to take a look at other areas of your solar business make sure to book a free audit call.

From "aha" to "oh crap", we’re sharing everything on our journey to install 1,000 kW in residential solar per month.

We’re learning a lot and so will you.

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written byJoe MarhamatiCOOJoe is the Co-Founder and COO of Ipsun Solar – a top residential solar installer in Washington DC with 60+ employees and $10M+ in annual revenue.Read more »
Joe Marhamati

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