Jan 2, 2019, 12:23 AM ETPodcast, Interview

a16z Podcast | Protecting Your Company from Itself: Why You Need HR

Founders frequently delay hiring a dedicated Head of HR, mistakenly assuming a recruiter covers all human resources needs.
Recruiters and Heads of HR possess opposing personality profiles: recruiters require world-class sales skills and a self-centric drive, whereas effective HR requires a low-profile, organizational-supportive mindset.
Hiring a world-class recruiter to lead HR functions often creates a disconnect, as the "hunting" mentality of sales-driven recruiters conflicts with the "policy and culture" focus of HR.
A significant trend involves recruiters actively selling themselves to CEOs for HR roles, leveraging charisma to obscure the lack of necessary organizational expertise.

HR should function as an extension of the founder's vision, acting as a partner to ensure the company is built according to specific cultural and operational goals.
As companies scale, the Head of HR serves as the primary voice for employees to the CEO, rolling up themes and issues that a single leader cannot personally observe.
HR provides quality assurance against management, ensuring communication, performance feedback, and management practices align with the CEO's intended tone.
HR mitigates legal risk by establishing compliance processes, which become mandatory upon reaching specific employee thresholds (e.g., 25 employees in California).
HR prevents companies from becoming "process police" by focusing on culture building rather than mere enforcement, provided the correct professional is hired.

Early-stage "house culture" models (e.g., working from founders' homes) can inadvertently undermine diversity efforts by creating an environment exclusive to those comfortable with that specific lifestyle.
Founders often believe their companies are inclusive; however, women and minorities frequently report feeling excluded due to subtle behaviors, such as specific types of humor, conversation flows, or chat room dynamics.
Successful culture transition requires identifying critical cultural "nuggets" (e.g., communication style, shared meals) and embedding them into formal onboarding for new hires.
Leaders must consciously evolve from tight-knit, homogenous groups to broader teams by regularly including new employees in social functions and making themselves accessible in shared spaces like break rooms.
As teams grow, behaviors that were acceptable in a small, tight group may become exclusionary and require formal policy adjustments.

Companies often mistakenly believe they are hiring "the best" without a defined process; a structured interview process is required to define and maintain hiring standards.
Effective interview panels should include diverse opinions; if all interviewers unanimously approve a candidate, the bar may be set too low.
Productivity measurement relies on a pre-planned onboarding strategy where objectives are set on Day One and evaluated at 30, 60, and 90-day intervals.
HR partners with management to define what a "perfect employee" looks like for the specific organization and establish metrics to measure cultural fit and output.
Distinguishing between "good" and "bad" HR candidates involves verifying past experience in growing companies and checking references from non-executive staff who utilized their services.
Competent HR professionals must understand total compensation packages (stock options, benefits, 401k) and possess the network to benchmark against market trends, rather than outsourcing this knowledge entirely.

The first termination is often the most psychologically difficult event for a founder-CEO, requiring a focus on respecting the departing individual as a company ambassador.
90% of performance-based terminations result in employee surprise if the company has not provided a history of ongoing feedback; lack of feedback is the primary predictor of legal disputes.
Establishing a comprehensive employee handbook is the single most effective tool for protecting a company against lawsuits related to termination or layoffs.
Layoffs must be conducted with a strict focus on respecting the individual's contributions and value to the company to mitigate legal exposure and reputational damage.
HR assists CEOs in navigating the legal landscape of reductions in force, which carry a high probability of litigation, particularly in jurisdictions like California.

There is a growing trend among portfolio companies to embrace formal onboarding plans and objective measurement before making hires to ensure performance accountability.
The podcast anticipates an increased focus on HR professionals who can navigate the transition from informal, home-based startups to formalized office environments while maintaining inclusivity.
Future success in startup HR depends on finding professionals who have "rolled up their sleeves" in growing environments rather than those who only possess business partner experience in large, established corporations.