No one joins a startup to embrace a bunch of rules and procedures.
Policies may have a bad reputation among startups, but most people need and appreciate guidance around their role.
Let’s delve into the use of policies and how they can encourage productivity in this order:
When I had to roll out a new or updated policy manual for a fast-growing e-commerce company, I explained my reasons to the team. As we grow, we need to define how we can best work together, and some policies and procedures need to be clarified.
Most importantly, I emphasized that needing a policy manual signals that we have reached the next level.
Reaching the next level likely will bring new opportunities, such as larger clients, more creative and technical projects, and access to better software and tools; however, the byproduct of that growth is a policy manual.
I like to combine communicating new policies with new benefits when possible. Examples include new time off policies, tuition reimbursement, or fun activities. This combination reinforces the message that as we grow, there will be good changes along with new requirements.
Finding a Balance
No one joins a startup to embrace a bunch of rules and procedures. In fact, you may have founded a startup to deliberately escape the myriad policies common at larger companies.
As your startup grows and you add more employees, you must establish policies to prevent employees from becoming confused or distracted. Beyond legal regulations—e.g., nondisclosure, harassment, nondiscrimination, privacy, and accessibility policies—startups and small businesses need to establish guidelines for optimizing the workplace.
An authoritarian founder may rely on policies as a form of enforcement. For these founders, policies are an instrument of hierarchal culture and control. I'm not a fan of this approach. I once worked at a company that had a policy against napping on the job. Despite the research showing that napping can increase productivity, one of the founders saw napping as a real problem.1 Focusing on specific behaviors will not address the broader concept of productivity.
Most founders don’t see policies as a substitute for real communication and would rather rely on a philosophy—such as “operate as if you own the business” or “write like your mother is copied”—than formal directions. The flaw with that approach is that it doesn’t provide guardrails for people.
If I were your COO, I would encourage you to find the right middle ground and apply policies to clarify expectations. In addition to codifying legal regulations and employing them at your workplace, policies and procedures provide a roadmap for how best to work together.
My mantra around policies is that our work already comes with a ton of stress, so let’s avoid any interactions and distractions that could add to it. Hopefully, when I work with companies, that mantra does not require much clarification, but we may need to formalize policies.
Here are some reasons founders should get behind policies:
To Protect the Company. Many policies make it clear to employees what is acceptable and what isn’t. If you need to correct behavior, it helps to have a policy—and enforcement guidelines—in place.
To Focus Your Work. Policies provide guardrails to help employees operate faster. You also address various situations at once, ensuring that everyone knows the expectations of working together.
To Treat Everyone Fairly. Working in an environment where everyone can participate encourages contribution and high performance.
To Allow for Benefits. Health and welfare benefits, paid time off, holidays, and company perks should all be defined by policy, including eligibility requirements, restrictions, and loss of benefits.
Define Reimbursement. Staff want clear guidance regarding expenses related to work, including limitations on reimbursements, submission requirements, and time limits.
When I run the human resources function, I would focus on the big picture and balance: We are here to do meaningful work in support of both company growth and individual development. I would install enough policies to define how to work together and how to help the company flourish. I only want to establish the bare necessary policies to accomplish production.
To create an employee manual, I would compile a list of policy matters specific to my company and integrate it into a boilerplate policy manual. You can get a standard policy manual from a PEO (a professional employment organization that often handles payroll and benefits) or work with an HR expert. I may also consult a labor attorney to review the final product.
When deciding on your legal source, keep in mind that while the PEO or HR expert may know the latest government regulations, an attorney may be more familiar with current case law—or what happened in court when companies were sued—and be able to help you adapt policy manuals to prevent litigation. Keep in mind that policies can be impacted by international, federal, state, and local laws.
Policies should be compiled into the policy manual and incorporated into job descriptions, job postings, offer letters, employee agreements, performance evaluations, salary and promotion reviews, vendor and client contracts, termination agreements, privacy and security statements, insurance policies, and marketing content.
Key Takeaway: Company policies serve a meaningful purpose to activate the vision, minimize potential distractions, mitigate risks, and guide the team toward productive work.
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