A company is only as successful as its people. However, early-stage companies often deprioritize proper talent management and place all their focus on the day-to-day operations of the business. These companies eventually find themselves reaching a point where their talent management processes aren’t keeping up with growth.
Hiring and retaining the right talent for your organization is just as crucial as having a great service or product, especially in the early stages of building a company. In this article, we list some important considerations in implementing employee performance management for startups.
Implementing Employee Performance Management Early
1) Define company values
Firstly, startups should define their company values. Values are the guiding principles and fundamental beliefs of an organization, and there are many benefits in defining company values early on. For example, having a core set of company values makes it easier for a company to hire and retain employees with the right aptitudes. Moreover, values help shape company culture, which will influence employee experience, engagement, and productivity.
In addition to defining values, startups need to ensure that their values are communicated frequently. Only 27 percent of U.S. employees strongly agree that they believe in their organization’s values. Instead of simply listing values on your website, startups need to integrate values into their talent management process. They can do this by:
- clearly and frequently communicating the company’s values
- aligning core values with behaviors expected from employees
- continuously monitoring employees’ actions and behaviors
Integrating values into the performance management process enables the employees to live and practice company values on a day-to-day basis. Companies can also make their values known during the hiring process – write the values in the job description and reiterate these values during the recruiting process.
Candidates and current employees should always be aware of the fundamental beliefs of the company. One tip on values – make them as actionable as possible. If one of your values is “honesty,” define specific behaviors that enforce and demonstrate honesty. (There are many resources (Korn Ferry, Iota Consultants, Ignition Group, etc.) that can help you define or adapt company values.)
“If I could go back and do Zappos all over again, I would actually come up with our values from day one.” – Tony Hsieh
2) Align goals
Effective performance management begins with goal alignment. Understanding company objectives is imperative. Half of the workforce doesn’t know what is expected of them. Managers should understand every company’s mission, clearly communicate the objectives, and make them easily accessible and visible for all team members (e.g., team-wide monthly progress report).
In terms of goal alignment, a common question that startups often face is “should I use OKRs?”
OKRs (Objectives and Key Results) are often used to cascade goals from the organizational level to the individual level. This can help create goal alignment as it helps employees understand how they contribute to organizational objectives.
OKRs are powerful; however, if a company’s strategies and objectives are frequently adapting (which is often the case in startups), the structured top-down approach of setting OKRs from the organizational level to department- and then to individual levels can be a hassle.
OKRs would need to be adjusted each time overall organizational strategies are changed. Frankly, this is a significant exercise that is not worth the time.
This doesn’t mean a company shouldn’t align goals. One approach is to set up OKRs at the organizational and department levels on a monthly basis and let managers delegate and own their key results and adapt as often as needed.
“Building a visionary company requires one percent vision and 99 percent alignment.” – Jim Collins and Jerry Porra
3) Develop a culture of feedback
Feedback is crucial in the talent management process. There are many benefits to having regular feedback conversations with employees. Firstly, it motivates employees, thus increasing employee engagement & productivity. Secondly, it generates lots of employee performance data which can enable better training and talent decisions. Finally, it enables better work relationships which can have a significant impact on company culture.
While managers may avoid giving feedback due to fear of hurting an employee’s feelings, more than half of employees want corrective feedback over praise and recognition! Most employees want real-time feedback and recognition for jobs well done.
The younger generations (Millennials and Generation Z) want 50 percent more feedback than other generations. Sharing feedback can be challenging at first. Enforcing the right processes and rituals early on will help ingrain feedback into your company culture. It is worth noting that creating and sustaining a culture of feedback is easiest to implement early on.
When it comes to documenting feedback, pen-and-paper approaches can be sufficient for early-stage companies. If an organization has more than 15 people, it will highly benefit from a performance management system that helps store and analyze feedback, objectives, etc., in one place. Ultimately, this will help simplify the performance management process and enable people analytics to help make better talent and training decisions.
“Make feedback normal. Not a performance review.” – Ed Batista
Implementing a performance management process in the workplace early on will better equip startups in developing and motivating their employees and ultimately improve a startup’s success and growth.
Remember that culture and people cannot be replicated – these two factors often differentiate a startup from its competitors. Your culture and people are worth the investment upfront.
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Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!