Making the Business Case for People Ops: How HR Leaders Can Secure Resources and Support transcript

Okay. So, hello everyone. Thank you for joining us today at the 9th annual Startup Boston Week. Our mission with this conference is simple. It's to bring together the entire startup community in the New England area across every industry department and funding stage. Startup Boston exists to connect, educate, and celebrate this ecosystem while serving as a trusted unbiased guide to the best resources that can help you start and scale your startup or your team.

My name is Harish and I am going to be your host for the day. And before I dive in, um I want to give a huge thank you to Sappulk University for hosting us. Suppulk University has generously partnered with us for the past 3 years, providing us this space in kind because of their deep commitment to supporting Startup Boston's startup community. If you're interested in exploring entrepreneurship, they offer a variety of programs and opportunities.

So be sure to stop by their table in the vendor hall on the fifth floor to learn how they can support your journey and how you might get involved in supporting their entrepreneurial students as well. So thank you once again for attending Startup Boston week and now we'll move on to the session. >> Thank you. >> Thanks. Hi everyone. Welcome. Um thanks Startup Boston uh for having all of us up here. We're excited to talk to you today.

Um I'm Abby. I'm going to be facilitating the and moderating the panel with these amazing panelists up here. Um, our panel is about making the case for people ops, how HR leaders can advocate for resources and support. Um, we'll start with some intros. Um, and then in our session, we're going to talk about how to show the real impact of people ops, advocate for resources, and position the function as a strategic driver.

We'll have 15 minutes at the end for live Q&A. So, um, have your have your questions ready. Um, I'm Abby. I am an HR business partner at Wistia, um, over in Cam Cambridge, um, which is a video marketing platform. Um, I've been in the Boston startup space, uh, for 10 plus years now, and across many different industries, and I'd have it no other way, the ups and downs, which I'm sure you all know. Um, and I'm going to pass it down the line as we introduce everyone else.

Mark, you want to kick us off? >> I'm Mark Duffy. I'm CEO of a company called Position to Launch. We provide uh financial services, everything from fractional CFO to controller to accounting and uh with the help of people like Ann HR services primarily to PE backed and venturebacked companies. Yeah, we'd like to think of ourselves as um we're all most of the people in the company are founders of company. So, we've been through that fear, that horrible fear of starting a company.

And uh we like to think of ourselves as fear mitigators and HR is like such an critically important part of that. >> Awesome. I'm John Beck. I'm the VP of people at ButcherBox. Um we ship highly sustainable meats and seafood to your door. You've maybe seen us on Instagram. Um I've been there for three years. As I was discussing earlier, I spent some time in education as well. Um and yeah, excited to be here today. Hi, my name is Ann Walsh.

I am the founder of Thrive HR and I am an HR advisor for growth um startup and growth companies. So, I've had the pleasure of coming out of large companies and um over the past 20 years I have helped scale 35. I just joined my 35th startup. So I've seen everything from you know things that went off the rails to things that we've done right. So I am very passionate about bringing in people early in the process where a lot of uh founders unfortunately newly minted founders don't realize that.

So we're here as an advisor to help companies grow and I can talk about people all day long and feel free to ask me any questions and I'm excited. Thank you for startup Austin inviting me back again. >> Awesome. Thank you. So, we're going to kick off with our first question for all three of you to answer. How can early stage startups set up people ops for long-term strategic impact even before they have a formal HR function? >> Mark, do you want to kick us off? >> Sure.

Um, so to me, HR uh early is critical. It's like I think about all the mistakes I've made. I've made them all. And one of the big mistakes, you know, you make is hiring the wrong person for a critical spot. And um if you do the math, you think about so it's recruiting and retention, right? You those are two critically important things. Um if you think about a Oh, sorry. If you think about a startup, um an example, you're a semiconductor company.

You've just raised 10 million. That's not enough, but to make the math easy, I'm going to say 10. Um and you've you've got to hire your head of engineering. The head of engineering is everything for the first 18 months because you're taping out a chip. That's all you're doing. They're writing code to tape the chip out in 18 24 months. If you hire the wrong person and eight months in, you discover that person isn't doing the job.

You've wasted eight months. Literally wasted eight months. So you've, you know, you've wasted what $5 million. And you may say that's an, you know, hyperbolic statement, but it really isn't because if you get eight months in and you only have that much runway left, you're dead. uh and and that person is critical for running the the operation, but he's also critical, she's also critical for um selling to a a fab. Not only do you have to sell to your investors the idea, but you have to sell to a fab.

If you don't get a TMCC or or a IBM, you're dead. And uh and so eight months in, you've lost $5 million and probably your company. So to me, getting somebody in early who's really good at recruiting, at articulating to engineers the mission of the company is absolutely essential. It's a very difficult and very critical job. So it's it's everything. >> Thank you, John. >> I would add um really doubling down on solidifying a company's core values early uh can be really important as you're trying to set this culture.

Uh to Mark's point, like culture is imperative. early hires are imperative, but really having clear core values that are meaningful to the founder um are are just really essential. And then just to add on to what Mark said, like hiring for the culture fit is absolutely vital. Um and really like the way that we think about it at ButcherBox is like culture fit is more important in many ways than technical skills. Technical skills can be learned um but culture is really inherent and important.

Yeah, that's a company can uh go out of business with a bad culture and uh it's you know the thought of kindness and mentorship and being tough when you need to, but it th those things are critically critically important. The thing that I see most and um is when they bring us in um an HR professional too late. You end up okay, we have my landscaper that's running he was good with the sending the invoices for his landscaping business.

So now we're going to hire him for as my accountant for my business. You a lot of times I've seen bad hires because it's people that they know and it's not setting up for scale. So it's first off you start with the mindset of we're not red tape. We're here to help you with clarity and scale. Where do you want to be in 18 months? And a lot of times newly minted founders just want to figure out what they're doing right now.

We're here to help you set the stage for where you want to be. It also you have to lock in the essentials. Even with five or 10 employees, five employees, you need to have you know what's your compensation? What's your equity looking like? It's not all done on handshake deals because handshake deals fall apart and people forget what they offered you a year ago. Well, you told me you I was going to be co-founder. Well, you're not co-founder now.

The business is bigger. So, there's a lot of things and needs to be it. Um, you have to have the culture by design at an early stage. How you on board, share information, celebrate the wins becomes your culture. And people sometimes just don't think of it that way. Um, other is you got to hire the right people. Time is money. You need to make sure that you're investing in the right areas. A lot of times founders focus on the product and the marketing of that product, but you also need to make sure that you're hiring the right people now and you hire the best you can hire now that will be there when you need them to take on additional responsibilities.

So, it's more um it's a strategic lever that you need to pull. You don't have to hire somebody full-time. There is a lot of options out there that you can have advisors that can just advise you. Uh and then you can hire a full-time person when it's needed. >> Awesome. Thank you. So, hiring the right people, having the right core values, setting up for scale are essential. Um and Ann, hoping you can kick us off with how do you align people ops initiatives with business objectives?

Where is my number two? I wrote notes because I have I forget every once in a while. Um, the key objective of lining people ups with business objectives to start the business with the strategy. I've noticed that a lot of HR people come in and just, you know, do the offer letters. You really do understand, you have to understand what the business does and knowing the company goals, whether it's hitting revenue targets, expanding into new markets, or preparing for funding.

HR needs to know that. HR really needs to embed themselves in that. Um, you need to partner with finance and leadership planning. Okay, let's talk about what are you doing, where do you want to go, how can we get your resources, what's the timeline on the resources, what's the timeline on your headcount. You also have to measure your outcomes. We're not just launching an engagement program. We're aiming to reduce voluntary turnover by X.

We need to hire X amount of people by this time or the business will suffer. And you have to put metrics and tie people's initially uh initiatives directly to the business health. And then you have to communicate. You have to learn the business language. And that's really important as an HR professional that you um really do understand and you get the buy in and the resources at the right time. >> Yeah. I mean, the other thing Ann did at a couple of companies um she came in and organized Friday afternoon gettogethers with the team and uh part of the get together was everybody in the company, whether you're an accountant or a whatever, had to give the pitch. and we'd get new people up there and they they'd give the pitch and and others were invited to say you got most of it right but here you know think think about this aspect of it.

So after a couple of those everybody in the company uh you know from the executive assistant to everybody could give the pitch for the company. The other piece of that was every quarter Well-run Company has you know quarterly goals like here are the three big things we've got to do this month this this quarter and in that meeting everybody was reminded about those and also asked is there something you did this week which you just felt you had to do that wasn't in line with that and you know they'd be encouraged to let that go let that go to next quarter because what's really important and you can imagine that the strength of that everything is timing you've got only so much money in the bank to get to milestones in a very short period of time.

That element is critical and that was that was you. >> And you'll know Mark and I worked at four companies together. So, four startups. So, we may go back and forth a bit. >> They separated us between us so we don't talk too much. >> That was intentional. Um I I wish I could give credit to this person but I sat on a panel re or I listened to a panel recently and it was a chief people officer and she said there will be a ceiling if you don't understand the finance side of your company.

There will be a ceiling in your position and I took that to heart. She even got a t a finance tutor to learn and she had she's obviously a chief people officer now. So I think that's really critical. Um whoever wants to answer this next one first in in that vein. Um, how can people leaders build stronger partnerships with finance and exeu executive leadership to ensure that people priorities are integrated into that business strategy?

Whoever wants to kick us off. >> I can kick it off. Um, so for me, just like any relationship, like it really needs to be built on trust and accountability and you really need to be able to have those like frankly candid conversations between the two departments. Um and then secondarily I think like systems are also really important especially in like an early startup phase. Uh so for example at butcher box when I arrived about three years ago um I would say that the finance department and the people department was very siloed but there's so much data and connectivity between those two departments. they really have to be in lock step.

And so from a systems perspective uh since three years ago we have like a weekly payroll call uh because we have we operate in two systems workday and ADP like it needs to be airtight. Um in addition like having a really uh strong system around like headcount management whether it's like new headcount requests contractor requests you really need to be at the table between finance and people like that partnership is absolutely essential.

Um and nowadays like every month we have a financial ops review uh where we present data to the executive leadership team and uh extended leadership team. So I collaborate on that with the VP of finance. And I would say like we are we are airtight on our data. We meet constantly. Um and also the other thing I would add is like having different opinions, perspectives and skill sets between those two departments is very normal.

Um but really working through and like having candid conversations um and really building trust with each other is really important. >> It's true. I find that um HR works very closely with the finance department. I'm a finance professional by trade and I was tapped on the shoulder be hey you knew girl you need help over here fell in love I could use my personality and my finance skills but um I found that finance tends to look at it always about the money and it's that's why I don't like reporting into a finance group because their decisions are made from finance and oh that does what the cost is >> but we look at it and we think about people experience and what the benefit benefit is for the employee.

We bring a different unique skill set and I think having a founder have a HR person that really understands what drives the people. Every person is driven by something different and having a person that's uh independent. It's not looking at it from a financial aspect can add a lot of value and have that conversation and put back push back on the finance professional. And I do believe being an advisor and um a coach to both groups really does help. >> Yeah, I was thinking about um about I'm a I founded three companies and my first one I raised half a million dollars from mentors of mine.

So I felt extremely, you know, it's that fear thing. You're scared to death like what have I done? And um and so all I cared about was that pile of money and not spending it. And then within six or eight months um we were doing okay. We were like break even. And and from that moment on my uh perception changed from money to people. I began to think oh if we only had you know so and so as a head of engineering you know we'd be it'd be a different company.

That piece of fear that I worry about would be taken off my shoulders. And it's been that it's been that way ever since is that if you have um if you get to a point of relative comfort, you should never be comfortable as an entrepreneur. Um you get to a point where you care more about people and you think about people. Lee Brady, my first head of engineering in my first company. Getting him on board was unbelievable and just changed my me and my co-founders lives.

And uh uh so you do change. I think thoughtful uh CEOs and and COOs have hopefully have that epiphany that nothing is more important than you're going to spend 70% of your money on people like what's more important >> and people talk a good game unfortunately that they say people are so important and >> you have to partner with f founders >> and leaders that really do believe in that. I have we've talked about that that I've fired clients that really weren't part of >> the philosophy.

Yep. >> Um that they were not treating their employees well. I I can't put my name to that. So, um >> finding a company that values their employee, puts the money into it, but also recognizes when it's time to upgrade people. You're during startups, you're going to get talent that they're they're maxed out. they're at their peak. They're and you're going to have to hire over them. You're going to have to have difficult conversations and you are going to have to invest to level up your talent sometimes. >> This is off topic a little bit, but I was thinking about George Bell jumped up, right?

He was the CEO and uh he had this philosophy that if you're if you walk down the hall and you see a spilled, you know, thing of coffee, like whether you're CEO or whether you're whatever you are, clean it up. you know, if there's a if there's a dish sink full of dishes, it's not somebody else's job to do that. And I've never forgotten never forgotten that that it's everybody's responsibility to this treat this place as you would treat your family because you are a family for during a very intense period of time.

You need to have that sort of uh caring aspect. >> I disagree. We're not family. We're more of a baseball team. Uh, so no, because people say family, it's like fingernails down a chalkboard to me because you don't really um vote out people in your family, but you look at it as a baseball team and you're like, "Okay, who's on the team? What's the team made up now? Okay, we have a strong player here. We don't have a strong player here.

We need to go and find somebody to fill that role." Doesn't mean that you don't you're not a good performing human. You're not a great human. You're just not somebody that we need on our bench at this time. So, we're going to trade you >> and we're going to get somebody else. >> Yeah. So, sorry, Mark. >> I think I traded on a sibling once, though. >> May disagree. >> Um, one thing that an old boss used to say that sticks in my head is that story storytelling humanizes data and I'm curious, what role does storytelling play for advocating for people ops and how do you combine that narrative with data to make a stronger case?

John, I don't know if you have thoughts first. >> Sure, I can take it away. Um, so storytelling is key in our work. Um, I would say really relating to change management, which is a lot of what we do as people leaders. Um, it's really important to be able to tell the story. And so I'm probably going to talk about this multiple times today. So just like just going to say that. Um, so we've added this employee voice um module into workday called Peon employee voice.

Has anyone heard of that? >> No. >> Okay. You know what I'm talking about now. All right. So Peon employee voice is like a poll survey for employees. We send it to our employees every other week and it's just like a few questions, takes no more than seven minutes. And the data that we get from this is absolutely incredible. So, not only does it give us the quantitative data of like what is your how satisfied are you with your job nine, how um how likely are you to stay at Butcher Box for XYZ, but it also gives the option for all of our employees to like put in qualitative data.

So for everything that they respond to, they can also add comments. And this really really helps us create a picture of like >> how is our employee base feeling. >> And so like the data, the numbers is really helpful. But when you really layer in like what people are saying about the things, whether it's like expectations for coming to the office or how do you feel like are you able to rely on your co-workers? The amount of data that we get out of this is just absolutely tremendous.

I would plug it to any company. Um, it's incredible bang for the buck and I think zooming back to your question, it really helps us paint this story for like where our employees are at, what they are feeling, and how can we make a better employee experience for them. >> That's great. >> I got a little fired up there. >> I love it. >> Mark, do you have any thoughts? >> Um, I don't know. I was thinking about um >> They probably can't hear you. >> Go ahead, Mark. >> Go.

Sorry about the uh about the culture aspect kind of again and thinking about what's what's really important to people and communication regular communication is really important and uh and having those kinds of tools is critical um um I think just you know what what you said >> but storytelling you're good at storytelling >> okay I'll tell a story okay so once so one story I always tell when I get resistance about HR is my first company um that company I raised a half million bucks for we ended up raising 20 million and it went to 0 to60 60 million in four years.

It was really cool. But we almost lost the company and it was that critical error we made in putting somebody uh so I I do tell this story a lot to clients. We uh we got to a certain point and then we we uh we got a huge OEM like multi-billion dollar OEM as a company and it made our company ultimately. Um we hired a guy based on a single recommendation from a board member who was kind of a mentor of Mike's and mine and we thought well we don't know you know and we interviewed the guy and he he was really good at corporate speak you know and Mike and I were just couple of schmos we didn't know that and so we hired him without checking references without looking at any other people.

He went out there and within six months the big OEM had fired us because he miserably failed. So Mike and I went out, we begged for, you know, an hour and a half to give us another chance. They gave us another chance. We got rid of him. Uh, and they ended up being 15 million of the 60 million when we exited. But you think about that that story. If you have a CEO or a CFO who isn't listening or who thinks of HR as being an administrative function, that's like a huge error.

It's not it's not it can't and and it's a cost center. It's ridiculous. You can't call it a cost center. It's circulation of the company. Um it's those stories are really compelling and and really really nail it, I think. So, we talk about storytelling for and combining that with the data, but what data and metrics are most effective when we're advocating for those people ops resources and how can HR leaders demonstrate ROI on people ops investments?

Ann, I don't know if you have thoughts here. >> Um, the most important thing is data data tying data. So, the question was what data metrics are most effective? Okay. The most effective way to advocate for people ops resources to anchor to data to executive finance leaders what they care about most cost risk and growth. >> Uh first show the cost of turnover. Repacing an employee can cost 1.5 to two times their salary once you account for loss productivity and hiring expense.

Uh if a new program or manager training reduces attrition even by 10% that's real savings. And um second is to track the time to fill. A lot of times people don't look at time to fill. How long a position is open is really critical. And it's three months. If it takes you 90 days to find somebody, it's three months of loss revenue impact. You should invest in the right tools. Um highlighting engagement and productivity metrics.

We also um compliance risk. It's not flashy, but avoiding fines and lawsuits is really critical. Um, it's tangible on return on investment. A lot of times people don't look at it that way. Um, showing how a handbook update or pay transparency, um, saves six figures in potential penalties is compelling. Um, I've seen quite a bit. Uh, and always, um, people ops is a tradeoff. Um for example, we can spend 20K on boarding right now or lose 100K in productivity over the next year.

So um the ROI story simple retention saves money hiring accelerates growth and compliance avoids risk. >> Do you find that you're uh having to overmeasure because management wants you to to overmeasure? because I've seen that where there you know 20 different metrics trying to justify yourself and it's it takes time to you know keep those records and >> report like you have to look at what really matters to the business at what stage. >> Yeah. >> Um the stage that I'm at is smaller than your stage that you're at.

So your metrics are probably different >> and what is needed and what the board looks at >> um or management team. >> Yeah. But I just be cautious about that because I've seen companies that measure uh that have 50page, you know, monthly reports and nobody reads 50 pages. >> You need 10, right? And uh so resist that I think if you're getting pressure to measure absolutely everything. >> I think you should really measure um attrition like how long people are at the company and people that stay and people are leaving. find out why they're leaving. >> Um, a lot of times it's your management that's causing people to leave.

It's not the company, it's not the benefits. A lot of times there is a trade-off when you work at a startup that you have, you know, there's possibility and it's the hope and the dream of getting something big. >> Um, and if people are constantly leaving, listen, and follow up. I've seen it before. um people weren't paying attention to it was a leader and when that leader left the company everybody's replaceable so >> yep >> um but I would look at that um attrition >> yeah the siloing too I think somebody mentioned that earlier you see finance and HR can become siloed and uh I think it's because they are viewed as as overhead and uh I had one company where I came in as uh temporary CFO And there were 12 people on the accounting team and every day they had lunch for employees.

There were like 400 people in the company and the finance people would all gather at a single table and I said we're not going to do that. Like you know let's if somebody go join the marketing table, somebody go join the engineering table and that really helped them. They were uncomfortable about doing it but within a month or so it was the normal thing to do and everybody got to know each other. The other thing you see with finance and HR teams is u not so much with HR but with finance um people tend to get um poisonous relationships with operating people.

You know I'm supposed to get the TPS report from from Joe and I it's always late and it's always wrong. Well, you know, have you called Joe and said to him, "This is a real problem for me because I then have to have keep this spreadsheet to make sure I've got everything reconciled." You know, and and invariably, often from a finance person, the answer is no. So, you encourage I think HR has a a really good important role in encouraging that sort of interdep departmental communication.

It makes a huge difference. >> John, what about metrics on your end? Well, we have pretty robust dashboards that we're using that are probably pulling in, you know, no less than 40 data points for us. Like to your point, like it's it's a lot. Um, but really thinking about like what is the message you want to nail with what stakeholder and how can you use that data to really prove that point. Um, but that those dashboards are incredibly helpful.

Something we've stood up over the last couple years. >> Oh, so that's great. >> Yeah. What are John some of those effective ways to communicate HR priorities to founders and to finance teams? >> Yeah, I think first off it's about like knowing your audience. I think Mark said it earlier like the finance team, the CFO, he's going to like numbers. Um the founder is really going to appeal to story and storytelling. So really gearing your messaging to who you're advocating to is really important.

Um obviously like using as much data as possible. For me, I see myself a lot of the times as like the person who is representing the people of the company. Yeah. And so I like to use the data again from the peon employee voice module is so helpful to like really hear what people are saying, what they're thinking, and then we can bring that forward in a way that is data driven and combined with a story. Um, but going back to your initial question, I think like knowing your audience is like really important in terms of what you're trying to get um out of that conversation. >> Absolutely.

I made a mistake early in my career asking a founder for money uh walking down the hallway and you have to be prepared to have the arc of the story why what's the return on investment and then get back to the what is going to be in it for him and why he wants to give you the money and it was him I have done it with females too but um learning when to ask the timing if he's walking into a board meeting do not ask or if he just got bad data you have to know your timing and um advocate, be selective on what you need and do your homework first.

Talk to other executives. Do you think it's as important as I feel it's as important? And get buy in from other people and um then have the data and have the metrics ready to go for them. >> Timing is everything. I feel like maybe we all learned that the hard way. >> Oh, I did. But I learned that lesson and didn't do it again. >> Yep. Um Mark, do you have any thoughts on from like the finance perspective on that? >> Um yeah, I mean I think that that describing the value of the finance department.

Finance people don't normally feel the need to do that because they're thinking, you know, we're handling payroll, we're doing the financials. What why do we need to be salespeople or advocates for ourselves? Um it it it's really important for what I often say to sales people um finance people is a lot of what we do and is our job is to keep the talent happy and not that we're not talented but you know this if if a salesperson is asking you for something that they really need finance people often will say well I what a pain why do I have to do this I mean and it's incumbent on them to say tell tell me why this is important, why you need it now, but they tend not to do that.

So, I think the message I I always tell people is you've got a really important role and you're not you shouldn't be in a silo and you need to explain to the rest of the organization why you need their input and why what you're doing is critical and take criticism. If you're working on a report that isn't relevant, then you shouldn't be doing that. You shouldn't be think you should be thinking about priorities. And getting back to the, you know, one of the stories a little while ago about in instituting this Friday afternoon thing, finance people need to be aware of are what they're doing this quarter.

Is it, you know, toward those really important quarterly goals or is it are they trying to reconcile something they just need they feel to they feel the need to reconcile? Um, >> siloing is always a problem in uh in both finance and sometimes HR HR. >> Thank you. Yeah. um and 35 startups and I'm sure you have gotten the timing right sometimes. Um but I'm sure you've even heard the word no when the timing is perfectly right.

Um what are some common objections that you've faced when asking for people ops resources and how have you overcome those? >> Um a lot of times unfortunately we always get no it's just like it's not the right time. We don't want to invest in that. We need to spend the money here versus spend the money on that program. And it's you have to understand the timing of why you want to do this after the next round. So I always look at things from various rounds.

Where are you going to be? What do you need this round versus next round? I mean series A is very different than series B and where you are in the growth mindset of that. So um my approach is always to the business milestones. If we don't have onboarding in place now, every hire postfunding will struggle and the productivity will lag. And we talk quite a bit about framing um as a growth enabler. That's um and it's really hard for founders to push that off when you put it in those terms.

So um skepticism, it's always skeptics. Do we really need HR at this stage? Do we really need this program at this stage? Oh, people are too busy. They don't want to do this. They don't Well, if we don't have this, what's the what impact? What does it impact the business? So, a lot of times it's um cost. Um our current hiring process, we're using outside agencies. Why can't we you have to do the math and put it in black and white saying, "Okay, we need to bring this t the talent inhouse." They manage the messaging instead of using outside agencies, getting an ATS, an applicant tracking system, making sure that you have the right tools in place, but they also show that you're actually saving money in the long run >> and um and understanding the timing, the message, the stage of the company, and the pain points because I've seen it.

I know where some something when something's going to break, at what stage of the company. I can tell a person, okay, I can give you the cliff notes, 50 employees, you're going to have a lot of communication problems if we don't hit it at 35 employees, if we don't do this, if we don't have that. And I think founders really um respect the knowledge that I bring because I've seen it and it's a pattern over and over again.

So, I am lucky that I have that to share with people. But most of the time, you just have to do the due diligence yourself. >> Yeah. and um put the storytelling and the story together so they understand it and make sure that your numbers match up to the desired outcome. >> Yeah. And sometimes you don't get there and you don't take the client. I mean, if you had that where you they clearly don't value you or a lot of times um CEOs will look upon both finance and HR as compliance.

Oh, you'll keep us out of trouble. And that's like one tenth of the job, right? It it that's it's so important to get that message across. And if you can't get it across, you know, it's going to be a slog and you probably can't help them be successful. And often, I mean, you know, Ann and I have talked about this, I don't know, 20% of the time, we don't take on clients that ask us for help because we don't see that they value or that they're thinking on a high enough level to understand the importance of what we do.

And you touched on this a little bit. Um, and when budgets are tight, which they often are at the beginning, how do you prioritize those people ops investments in a way that still drives long-term value? Obviously, you have long experience, but what else? >> Um, definitely compliance. Compliance is first and foremost because that's what's going to catch you up if people do not do the basics. Offer letters. Um you have you know there these are the non-negotiables that you have to have as business leaders and it's good corporate governance to have these things in place.

If you fail you lose trust and then you also have a legal risk which is more expensive. So it doesn't have to be anything fancy. They can be Google Docs. They can be um just templates that you can pull off the internet. I mean, but make sure that they're for your state. I've seen I've come in and seen offer letters and um contracts that are written for new employees that are for Connecticut and the person lives in Florida.

I mean, it's not going to hold its weight if you don't do your homework upfront and get them down right. Um, also with recruiting and talent acquisition, if you're not investing in the right platforms and you're not, people don't know about you. If you're not spending the money on either Indeed or LinkedIn or your network or paying a recruiter, you you're only going to get mediocre talent. >> So, you have to have a budget and um you have to think about scalability and looking.

But I'll tell you the first thing I would think of is compliance. It's uh uh offer letters, equity documents, making sure those things are done upfront because um many of lawsuits are on a handshake. >> Also, the due your next due diligence exercise will be a nightmare unless you've got that stuff. >> Yeah. I've had people that wanted to like I've been on merger and acquisition teams go in and look at a company and they don't have anything.

What's your compensation philosophy? Well, well, I didn't have a compensation philosophy. Now, with these transparency laws that are out taking effect next month, um you need to have a compensation philosophy and it has to be written and people can ask for it now. So, just be prepared that that is coming that is coming and people need to make sure that you're ready. If you want to give promotions or you want to give off cycle raises or anything, you have to have it written.

People need to know what the range is and other people in other departments can ask questions about that department. So you need to make sure that your compliance is, you know, tight. >> And states and the feds are looking at that that, you know, contractor versus employee. It's really important not to mess around with that. You've got to do the right thing. And you'll get a lot of resistance from um >> from CEOs on that. >> Oh yes, a lot of >> but you can't give in. you just as a compliance officer, you've you've got to insist. >> Yeah, you have to be consistent in your hiring practice.

Um especially around contractor versus W2 employees. A lot of times we start you out as $1099. You get to a certain stage really an employee. You don't want to get caught up in that um because it it can be costly because they can go back years and then um reclassify somebody. So that's our role as an HR executive to make sure that the company um is risk adverse on that. >> John, do you have any thoughts? I think a good example of when budgets are tight things that I prioritize um for me I'm a big believer in coaching and coaching of our team.

So we partner with a company called BetterUp um in which at least 15 individual uh 18 individuals at a time will go through one-on-one coaching. The BetterUp platform is like really extensive. It has like tens or hundreds of thousands of coaches. I've gone through the program. I'm like a huge believer in it. getting coaching from someone who is not within the organization is is really important because they're kind of agnostic to the business and having gone through that for in my first year at ButcherBox I went through coaching when it comes budget season which it is now favorite time of year um that I won't touch that line I know the impact of that line I probably can't articulate the ROI on coaching but it is something that I believe so deeply in and we get such positive feedback from our team on that it's just like becomes a non-negotiable for me so I'll look elsewhere in my budget of H we could tinker with that.

Um but coaching better uplines not going to be touched. >> Love that. That's great. >> Yeah. So like I just have like a strong philosophy about it. But I've seen the impact on our people >> and like the feedback from team members who've engaged is just it's through the roof. >> And people value that. >> They love it. >> They really do. They love it. And I do believe not having a person be your coach outside. Um, I I I am an executive coach, but I do not coach people internally because I just think it's just a conflict of interest. >> Yeah. >> Knowing your company invests in you from a coaching perspective is amazing.

And then also the result of having a leader that goes through coaching and the impact that they can provide the business is tenfold, right? >> And that's where it's a little intangible. Like I can't necessarily tag a number to that, but like seeing the individual and how they've progressed from senior manager to associate director, what they've worked on with their coach, it can be gamechanging. >> Absolutely. Um so with the time we have left, I just want to go down the line quick and if there's one thing that you all leave here today with, um I'm hoping that uh our people up here can share the the one thing that you should take away.

Um I know we talked a lot, we dropped a lot of knowledge, but um the one thing that you think people should take away from this session. >> Yes. So I was thinking about cost center, right? And it's often viewed as cost center. I tried to figure out a analogy that I think will hold up as a metaphor, right? And it HR is the circulation system of a company. You know, if you said to yourself, well, how important is my circulation system? you know, it's it's it doesn't you know, I'm the one who goes out and, you know, works and mows the grass and does all that stuff.

It's not the cost center question is the wrong question. HR is it provides the resources, the coaching, the compliance uh for the company to exist and the the retention and the uh recruiting uh which is essential. It is existential to the company. It's not you can't describe it as a center at all. And so think about and test that uh analogy as when you leave. I think it it holds up in terms of uh thinking about what HR is. >> Thanks, John. >> Yeah, I'll I'll add to that.

I I think that's really important and to me there's a couple pieces here is like one, your people leader really needs to have a seat at the table. Like you really need to deeply understand the business so you can be an effective business partner. for example, like I know more about dry ice sublimation than probably anyone else in this room. Um, but it's really important that I understand these things so I can prioritize and make my people strategy accordingly.

And I think that also whether you're an early stage startup with one person and recruiting like they need to really really understand the business or if you have a 200 person company a fivep person people ops team like they also need to be deeply ingrained in the business whether it's coaching individuals whether it's understanding challenges across the org. So really just like doubling down on people ops is in the business and we are like directly supporting everything that the company is prioritizing. >> I agree with you. >> Absolutely. >> Um I think you need to have the people ops person has to have a seat at the table.

I also um you have to think of it as a business strategy. Even in the early days, how you hire on board, build your culture directly determines whether your startup scales or flounders. And you should treat your people decisions with the same discipline you treat product and customers. You'll build a company that grows without breaking. So that's something um and listen to your HR person. They know what they're talking about.

I think for me um the concept of shifting from this is good for employees to this drives business outcomes is critical and that storytelling and that advocating and all of that. Um that's my my takeaway. Um we'd love to open it up for Q&A. I don't know if we have a mic. Yep. Okay. Lots of hands. >> Uh great panel. Thank you for the opportunity. So um my question to the panel is like it's a bit long one. I really appreciate your patience in this.

So uh how to get NDAs done up front like while not uh hiring an attorney for a couple of grand per hour? Uh so can we use like generic templates just like uh for offer letters and if that's the case and if we have to and if we have a revolutionary idea um that could change the world you know uh that we are unaware of so how to be safe from greedy greedy investors at that point. >> I mean I'll take that one. So NDAs are really important and uh we have a you know on our staff a uh not a full-time but a part-time general counsel.

So, we take a we always have a template and the template is is, you know, within a couple years old, but we always um every year have this guy take a look at it and and if we're operating in 20 different states, um you know, he he will he will tell us Mike Pini is his name. He's great, incredible guy. Um so, we have that resource. It's really cheap. He's way less expensive than, you know, a a big law firm. Uh, and big law firms are great because we use Goodwin and all those for the transactional stuff, but for that sort of stuff, it's always good to have even for a company just to have uh a guy like Mike Pellini as a outside GC helping him do that stuff. >> Yeah, there are reasonable attorneys.

I have employment attorneys that I typically work with to make sure that those documents are correct. We look at them every year and um you should make sure that you have those if you're a founder, make sure that you have those in place signed before you give out any information. Um so that goes along with the offer letter, making sure that the offer letter and the NDA go together. And if people don't want to sign your NDA, you do not hire them, >> right? >> You can even have do an NDA for the interview process as well. >> I've had that. >> Yes, sometimes we do.

Um it depends on the level of employee. um you have mutual um non-disclosure agreements. >> Yeah. >> Uh but it's all about protecting your business. >> And a subtlety there is is it's it's good to have a general counsel, but you should also have on a you know, part-time or available basis a uh an employment attorney because they have a whole, you know, wealth of knowledge that uh your GC probably won't have. >> Yeah.

And a lot of times I I mean I know a lot but whenever there's something that is questionable I have a person that I call immediately um they make themselves available >> to answer the questions. We want to make sure that we're doing right by our employees and if there's something that I don't know or if it's nuanced they uh you call an expert and it's short money um and it's worth the investment. >> Yep. >> When in doubt ask.

Next question. >> Um hello. I'll stand up as well. Uh my name is Thordes and I'm from Iceland. Um so I have a small startup of three. Um I love how you guys talked about data. Um and I just want to mention one story from a previous startup that I used to work for. Um the VC fund was really like they want it out. So um I witnessed the CEO just completely ignoring the data from the HR department and all of them have quit now except one.

But she went on maternity a few months later. So I think that's why she didn't leave. Um so definitely very important. Um but yeah, so I have a small sort of a three. Um and we have this one employee that's critical for us. Um like what would you recommend cuz I mean we don't have a lot of money. Um but you mentioned the Friday nights like what should we really prioritize spending our money on to making sure that we build um the right culture from the get-go? >> Great question. >> I can kick it off.

Um the first thing I would ask is like what is important to this person, right? Like really getting to the root of like what would work for this person? I think in those very early stages it can be a little bit more personal versus like what is our employee base looking for? Um understand what's important to them. Like if they are an A player, you need to keep that A player and you need to do everything you can even given your financial constraints to make that happen.

Um I'm a big believer in like if you have an A player, you are you are keeping them under all circumstances. Yeah. >> Yeah. And stock is always important. I mean, we've given inordinate amount of stocks to people who are absolutely critical and uh and more money. My first company, we paid um our sales guy five times what Mike and I paid ourselves because but you know we at that point we owned most of the stock. So that was that's why but we would have been lost without him.

Um the other piece is in terms of understanding what people are motivated by. One of the critical things with HR when they interview and recruit engineers is once you've uh you know made the offer and the benefits are okay those are just table stakes with an engineer engineers tend to want to be part of a really important mission that's and a lot of people don't get that and to have the HR person aware of that and able to articulate the mission of the company and the challenge and the excitement of the challenge is absolutely critical.

So keeping that person super up to date on what the future of the company is, what new products that may come out, that's really critical, >> right? And then the other thing is of several times we've had people that were very money motivated and they didn't have a lot with they had personal >> circumstances where they needed to bring in more income than others. So you give them options of okay, do you want a higher salary, less options or more options, less salary?

There's multiple different ways you can have conversations as long as you have it in a band and you can you can defend why you you made that offer to somebody. You just have to find out what the hot buttons are. And as a small company, you have a lot of latitude there. >> Yeah. >> Thank you for if you have any other questions you want to talk off offline, feel free. >> Thank you. >> Thank you so much. >> So, uh my name is Nicole.

Uh I just started an HR startup and so my question is a little bit more of a pivot. Um because everything you say, I absolutely 100% agree. We have over 30 years of experience VC backed, PE backed, you name it, I've worked it, but we don't know how to uh actually try to figure out how to get clients and I think you know Mark and in you guys have been like how did you do it? Like how did you pivot to kind of go into fractional and how did you find these business opportunities?

I obviously we're here this week trying to figure out how you get there, but we're not even sure how do you how do we market ourselves to be that um kind of back pocket talent for you where you know our services are there to help you with compliance and and so forth and the offer letters and like a lot of the blocking and tackling that I think that I've gone in to a 50 plus company where they just had an office manager doing it and it was crap and then I had to build it all out but like how do we find our first client because that's struggling for us too and you guys have obviously done it.

If you've done it 33 times, >> the first thing I would recommend is and the thing that is the best feed, the best advice that I ever received was niche down. Niche down. I used to be, oh, I'm working I work in startups. So, what do you mean you work at startup? What stage startup? What I niched down. I really niched down. >> So, be great at whatever. What stage do you like to work at? Do you want to work at series B?

Do you want to work at series C? What what phase of HR do you like? Um and then you look at those companies. Okay, what companies are out there? Then you have to market yourself. Not marketing yourself by calling everybody telling them what you are. Spend time on LinkedIn being the subject matter expert out there that you are out there to every event talking to people. Once you get one client, you will be surprised at how many other clients come to you.

I have made a uh my business in Boston and I have been known to be the startup person for Bostonbased companies but I used to they were bigger companies I you know 300 employees that's not my belly wick my belly is really 25 to 150 after 150 I'm not your person you need to have a full-time person you need to hire John knows more than I do at that stage I am not that person >> but you just have to figure out what stage do you want to be and then go after that market by putting yourself out on LinkedIn.

I can't stand marketing myself. I I just I'm not good at it. But you just once you get one client and then just constantly writing about a topic that you like and I love to talk about the craziness in startups. Um so feel free to follow me along. >> Word of mouth too. >> Reach out to the people that you've worked with. >> Yep. >> Yeah. It's a sensitive question for me because originally it was all ad hoc. I got deals from lawyers, from VCs, from other entrepreneurs.

And I've got a guy in the audience today who was on my board of directors who has been beating me up about the fact that I need to have a coherent marketing strategy rather than relying on stuff just falling out of the out of out of the roof. And uh and so we had a we had a session. I mean, here's an example. Barry Star, there he is, uh did a session for us, an all day session where we sat around, talked about this very stuff, like how do we define ourselves? where are our sweet spots?

What what's the future? And how do we describe ourselves? And uh so I would find a mentor like that and use them. You know, think about what you're good at, what you're not good at, and find somebody who can help you with >> it. It's out there. It's it's right out there on LinkedIn. You find somebody that you like and see what they do and but you change it and make it your style. And um it there's a road map out there already done.

And if you want to talk, I'd be more than happy to tell you how I started and um that there are peaks and valleys. This is not for the faint of heart. I will tell you it is not easy out there selling yourself. You are the product and if people don't want the product, it hurts your feelings, you know, or but um I know what I bring and I know what value companies get from my services and if you don't want it, that's okay because I know somebody else will.

And you have to know that and not have a scarcity mindset because if you have a scarcity mindset, it people know it. >> Thank you. >> Um, but I'd be more than happy to spend time with both of you on how I built my business and and it's really about who you know and it really forcing yourself to go to these events and shake hands. >> I think we have time for two more questions. Sorry. >> Um, oh, >> go ahead. >> Uh, so I have two question.

I Hi, I'm Sharon Bour. I'm the operation um brand new operations manager for a startup called Macrocycle. Um two questions. You can answer which one you want. Um the first one is when you were talking about culture fit when I hear culture fit I'm like that can often mean look hiring people that look like you that have the background that are went to the same school. I hear bias. Um it's e not intentionally but how do you say more about culture fit and avoiding that kind of bias?

And the other is as you were talking about keeping your AE players and and paying them more and that kind of flexibility that you have as a startup. >> I didn't say necessarily paying more just to be clear. >> Okay. Well, >> but I I'm happy to talk about that, >> right? And I just mean like how does that fit into the compensation philosophy and making sure that other people aren't like undemotivated by that by trying to keep your A player and then other people are like, well, am I ever going to get get to that point?

So, sorry, two questions. I I always look at it not as a culture fit as a culture enhancer. So I'm looking for somebody that's different. I don't want the same per people all I worked at a company where all the executives were from the same company. It was like I worked at that company like that company that you just left you wanted to build. So I look at it as culture enhancement. Uh what are you bringing to the table?

What kind of personality am I going to get along with you? Are you going to get along? Are you just a naysayer to just to be a naysayer? I mean th those are the things. Do people naturally walk towards you or do they see you and walk away from you? Those are the people that I try to avoid but you can talk more because I can talk too much. >> Yeah. So I think in terms of the culture fit the way that I think about it is really tying back to those core values.

So when we interview individuals for roles at ButcherBox like we are actually in our like second round where there's a panel of interviewers we are solely focused on core values. We are asking no questions about technical skills and it's really looking in uh does this person align to our core values and our operating principles. Um and then secondly keeping a players similar to the question we saw before it's like what are the levers that are going to work for this person.

Um, and so like when you see a rising star in the company, really working with them on creating a personalized development plan for them, like what specifically are they working on to go from the associate director level to the director level? This should be an absolutely like concrete plan that anyone in the company could pick up and say like, okay, it looks like John is working on these three things and like this is the data that he's like working to move.

Um, and so like again going back to like what's important to the person like we are we do have transparent salary bands. We've had them for a while. Um, it's been really helpful for our company. We've moved some some data around questions on compensation equity. We've moved them like 75 points forward on net promoter score. Um, but also like it's not always just about money, right? Like absolutely I want the people who work at ButcherBox, I want them to >> whether they're remote or in the office, I want them to be excited about coming to work.

Um and so really understanding like what motivates them, what would make them excited to come to work? Are we giving them stretch projects that are a little bit outside of their wheelhouse, but like really exciting to them? So I think there are a lot of different levers that you can pull that aren't necessarily equity, it's not comp, it's not bonus. Um, and then the second piece, I'm rambling at this point, but really strong management is so important.

If you have really strong managers, people really want to work for really strong managers. So, really being laser focused on upskilling your manager bench, um, and making sure they're the best managers that can be. I think that can really support a a players being the best that they can and staying at the company. >> Plus one. I think we had one more question. Thanks, John. >> Awesome. Thank you very much. Thank you for all the insights. uh also related to culture.

You mentioned how important the culture is but you also you mentioned the necessity of data of measurement of speaking the language of finance. So my question is what are the best practices that you encountered uh for if not ROIs at least KPIs for investments initiatives for culture for learning and development and for coaching. >> Thank you. >> I'm gonna let you guys take that one. Well, KPIs, um, I always like to call them bigs.

Like, we called them bigs at one of our other company, business improvement goals. And they weren't your daytoday. They weren't the things that were that I got paid my salary for. This was 10% of everybody's uh, bonus was attached to these bigs. Make sure that everything was moving forward. And everybody was laser focused on these are the things that going to differentiate us from our competition. So every quarter we knew what our bigs were and where we were at and that created a sense of camaraderie and competition and team building and because every department had them and it wasn't like we had 30 things to work on.

We picked like five major big boulders that we needed to move but everybody was laser focused on that. And that's how you really build culture. I felt like we had a lot of fun. You always add fun into things. Like that was another thing. It's like having outings and um the Friday afternoon things was one company. A lot of people don't want to work on a Friday afternoon be focused on having drinks with their colleagues.

They want to go home. You have to build what works for your company. If your company's international, you have coffee time, you have lunchtime, you have whatever works for your what's >> what makes people want to come and hang out with each other. What? Like one time a company, I'll tell you really quick. We used to have horoscopes at the end of the day. We'd yell scope time and everybody would come to my office and we'd tell you how bad your day was supposed to be and you're supposed to have a fivestar day.

It people loved it and they still talk about it and it was the stupidest thing but everybody knew about that. And then we had a jump tap band and we had um there was all kinds of things. It was something for everybody. We had a few hundred employees. We could do that. small companies, it's more focused on what are you working on? Are people excited about the mission of the company and what's driving each employee? And that's really what you have to focus on when you're small. >> Awesome. >> I hope that helped. >> Please connect with us.

I'd love to >> Thank you all. Thank you. Thank you panelists. >> Thank you. >> Awesome. Awesome. Thank you. Thank you so much. This was a lovely panel. I absolutely enjoyed being here and uh I'm sorry some questions went unanswered. We had to cut short in the interest of time. Uh but we have a lot more in store today. We have a lot of side events happening both here and throughout the city uh this entire day. So feel free to check them out.

We also have the uh Massachusetts Climate Tech Studio finale happening right here this evening. So if you're interested in uh being there uh please drop by as well. And yeah, we know that you want to mingle after this event and it is highly encouraged. Uh our only ask is that you do so outside the room. Uh even if your next session is right here in this room, we do ask that you step out so that we can reset and prepare the space for the next event.

Uh also um Three Circle Studio is our official photographer. So you might have noticed a photographer taking pictures of you. So if you head out to the uh hallway, there's a QR code out there which you can scan to download all your photos. And uh for those of you joining virtually, you're all set and I'll see you at the next session. >> I was not in the jump. >> Thank you so much. >> Thank you.