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One of my mentors taught me that there are 3 means to getting things done in business – people, processes, and technology.
At the time, I was VP at a health care start-up. We had come up with a new online service for hospitals that helped them manage paper-based information prior to surgery. Each hospital felt that its processes were unique and required weeks of individualized mapping and planning. My job was to make sure each client engagement worked out and grow the business, so I was generally eager to please.
I occasionally butted heads with my CEO, who would say “We’re not building a consultancy, we’re building a product business.” Over time, I realized what he was saying, and it applies to a very wide range of start-ups.
Many businesses start by having several really talented people working on something. If they’re very capable, they can build a business based on ingenuity and provide a service that someone would pay for. In our case, we had some smart types around who could drop into a hospital and improve the workflow by figuring out the bottlenecks (in conjunction with our online offering).
Eventually, if you’re smart you figure out what the consistent issues are and recognize patterns. You become able to process things in a replicable way. At this stage, it’s possible that some of the work can be done by someone who’s not quite as experienced or talented or creative, because you’ve figured out what needs to be done. In our case, we realized that one of the steps was behavior management and education of physician offices. We hired people who would go to physician offices and interact with the secretaries who were sending documents to the hospital. Generally speaking, the more process-driven a job is, the less vital the nature of the person you’re hiring for it.
If a task has been processed very carefully, it’s sometimes possible to automate it. You can have technology perform a task instead of a worker. For example, we could have an automated system notifying physician offices that they hadn’t submitted insurance information to the hospital instead of having someone call them. When you get to this point, then you’re at the product level and the business becomes predictable and scaleable. This is what we were going for, because then our offering could be more quickly rolled out to a larger number of hospitals.
This is the progression that many start-ups tackle. They begin with very talented people who are trying to solve a problem. There are often many twists and turns. Eventually, they figure out a solution to the point where they hire people for more defined roles. Last, they automate as much as they can to reach the product stage, if that’s feasible (it’s often not feasible for ‘service’ businesses or consultancies; these businesses thus retain an emphasis on hiring people that can continue to maintain the quality of the offering).
This is true in non-tech businesses too. With Five Guys Burgers, the founders spent 15 years tweaking their original handful of restaurants in Virginia, finding the right bun bakery, how many times to shake French fries before serving, how best to assemble a burger, where to source potatoes, etc. After they had figured out the processes, they eventually decided to franchise, roll it out, and bring it across the country. Here, the ‘product’ is the consistent Five Guys experience you get if you walk into a location and order a burger.
This is not to say that the progression from people to processes to technology is always preferred or necessary for growth. Many businesses have distinguished themselves by retaining their focus on people. For example, Zappos has eschewed developing processes for its call center staff, instead allowing them to exercise autonomy as to how best to resolve an issue. They can even spend hours on one call if they feel it’s warranted. This makes the staff happier and makes Zappos’ customer service one of its key competitive advantages. On the flip side, we’ve all had experiences with companies that seem so process or automation driven (e.g., call-answering software designed to keep you from talking to a human) that they’re not positive orgs to interact with or work for. But it’s difficult to resist movement toward processes and automation as operations grow, and in many cases they’re vital to achieving scale.
Knowing what I know now, I understand why my CEO was always driving us the way he was. You try to find the most talented people you can early in an organization’s development. Over time, the organization grows and you can process out more and more things as you hire. Eventually, technology can make certain aspects of the organization’s functioning easier, and the people move on to figure out different tasks and opportunities to process or automate.
Having a sense of the progression from people to processes to technology can help people find roles where they’re likely to be happiest too. If you’re a talented, motivated person who wants to build something and dislikes processes, you’d probably prefer to start or work at an early-stage organization that is still figuring things out.