Introduction

Intellectual property (IP) brings value to their owner both from their right to use and their right to exclude others.  Adding an outside partner to your IP development could offer big benefits, but also complicates how you determine your company’s (and your partner’s) ownership rights both now and in the future.

What you end up owning in a partnership depends on both your ability to create something valuable and your ability to prove what part is yours.  You can save tremendous cost and time by thinking of IP before, instead of after you share information with outsiders.

Partnering

In a joint project we co-invest resources and IP with partners, expecting to share the resulting joint business.  Partnering helps to more efficiently build value.  This motivates us to share costs and risks with partners and leverage our respective strengths.

In a partnership, you are jointly sharing a mix of IP from your company, your partner’s company, and the work developed together.  To maximize your ownership, you need to first categorize what to share both within and outside your company.

The effects of partnerships can last a long time.  Partnerships often change or fail as the individual partners’ business goals and personnel change.  What you do now can have repercussions 10-20 years from now.  For example, if you let an outside partner have rights to your information, then your company may be limited in using its own information with other partners or customers.

Information’s Value

Most IP is in the form of know-how and other controlled information.  Too much internal control stifles innovation.  Too little control increases the risk of loss of your company’s and your partner’s secrets to the competition.  Companies can maximize value by varying control of information depending on its value or sensitivity.

The four common levels of information ownership are:

1)    Trade secret

• Form of IP that can be enforced in court in many countries.
• Access is strictly controlled by a few people and by numbered copies.
• Should be encrypted and marked as Trade Secret or Top Secret.
• Examples: customer list details, internal algorithms, methods of doing business.

2)    Confidential

• Access is controlled by client or project, and on a need to know basis.
• Should be marked as Confidential to your company or a particular client.
• Examples: client information provided under a confidentiality agreement, patent applications before their 18 month publication.

3)    Proprietary

• Minimum level for all your company and client information that is not public.
• Also includes valuable combinations of public information.
• Examples: databases, internal operations.

4)    Public

• Information legally available to the public or your competitors.
• Can include gossip or other information you mistakenly disclosed.
• Examples: your public website, annual report, sales literature.

Since information can have a different value depending on the recipient, the same data can be treated in different ways.  Partnering makes information sharing more complex due to distribution limits of your partners’ confidential information.

Shared value depends on how much value is created, and on who owns or can use the invention.  In partnerships, ownership or right to use is not always given to the creator.  Much depends on when it was invented, how well it was segregated, how well it was documented, etc.  How will you help maximize your company’s share relative to its respective investment and innovation?

Sharing criteria are not fixed in time.  Partnership timelines typically have three main phases:

1)    Before the joint project

• File patent applications on information you need to keep for your company.
• Document inventions and information to prove that they are 100% yours.

2)    During the joint project

• Compartmentalize the joint project from your related projects.
• File patents together with your partner where required and alone when possible.
• Share patent filing costs with your partner.

3)    After the joint project

• Know which of your rights are limited by your partnership agreement.
• Maximize your remaining IP.
• Share patent maintenance costs with your partner.
• Review the impact of transferring IP to your partner when you are dropping patents in particular countries.

As shown by the following chart, IP can flow between parties and as a result
IP ownership can change during these three phases:

Joint IP Development - Do’s

• Share your IP internally to leverage innovation for your company.
• Use your inventions and knowledge of IP to build value for your company.
• Maximize the value to your company (1^st) and the joint project (2^nd).
• Document how you keep outside confidential information from your inventors who invent outside your joint project.
• Retain your rights by documenting any overlapping work before, during, and after the joint project with a provable date and author.
• File patent applications before starting the joint project.
• Maximize your company use of co-developed information in applications that your company has rights to.
• Ask yourself and your team what company information would benefit the joint project and what value your company would receive from sharing any of it.
• Know what limitations are imposed by the partnership’s contract terms.
• Develop an IP docketing database or other evergreen system to provide notices to your team managers and partners in enough time for them to act.
• Give your partner enough notice before dropping a patent to save fees.
• Know your partner and their project-related patents, publications, other partnerships, licenses, and motivations before, during, and after your project.
• Follow your internal controls so that everyone on the team knows what to share, what not to share, and when to notify your partner.

Joint IP Development - Don’ts

• Don’t engage in “Unprotected Sharing”.
• Don’t disclose trade secrets to outsiders unless you are sure that they must and will keep it secret forever.
• Don’t freely give away your company’s information.
• Don’t be so proud of your inventions that you tell your secrets to outsiders.
• Don’t publish or publicize before filing patent applications or identifying trade secrets.
• Don’t publicize details of much of your daily work life (your project timeline, project problems, IP practices, etc.) that could help your partner or competitors.
• Don’t use outside confidential information that could contaminate you, limit your ability to work without your partner, limit your patenting or publication, or limit your clients’ ability to buy from you.

Conclusions

Joint IP development is a necessary and useful part of creating highly complex products and businesses, although it has major differences from internally-created IP.

IP ownership rights can vary depending how you contribute and segregate information from both you and your partner.  You must also remain aware of the contract’s requirements not only before and during the joint project, but also long after the project is finished.

Nothing pleases small company CEOs more than an oncoming wave of customer demand. When the wave hits they often discover the force can disrupt and derail their business. It can overwhelm overworked employees; push ad-hoc processes to the verge of collapse; and quickly exploit vulnerabilities of fragile systems.

Sustaining rapid demand growth requires flawless operations. Yet seemingly random choke points pop up, undermining important levers of performance. Product or service quality erodes. Timelines slip. Irritable customers complain about service and support. Renewal rates and repeat orders slow and maybe decline.

Human capital, the most critical resource in a crisis, buckles. Front-line employees are pulled concurrently in several conflicting directions without a coherent action plan, clear guidance, or essential resources. Stress levels rise. Collaboration and teamwork is frayed. Mistakes proliferate. Unless arrested quickly, this negative swirl spawns other challenges.

What should leaders do when rapid revenue growth is accompanied by rapid operational decline? I recommend focusing first on people and process to turn such moments of adversity into strength within a relatively short period of time. Here are seven steps on how to do just that.:

1. Define Objectives and Pinpoint the Right Metrics:
   Make explicit the business outcomes that will frame success. Translate business outcomes into 3 to 5 measurable performance endpoints. Ask what will delight the customer. Most small businesses either measure the wrong things, or pour through a “data-dump” in lieu of real performance yardsticks.

2. Embrace Transparency:
   Share the right metrics up and down the organization. Everyone on the team must know where the “ship” is headed and important markers of progress. Metrics or performance data in most small companies is shared only by a few people at the top.

3. Make Simple Process Improvements:
   Review existing operations quickly to identify improvement opportunities. First, use the 80-20 rule. Identify the few key tasks that use up 80% of employee time. Ask “How does this help achieve our performance metrics?” or simply “Why do we do this?” These questions will pinpoint opportunities for the organization to improve effectiveness. Second, focus on finding easily implementable changes to existing work processes that will improve operational efficiencies. Think faster-better-cheaper.

4. Review & Modify Job Design:
   Identify jobs impacted by these process improvements. Think through, modify and document job design changes. Use “Before” and “After” snapshots. Sit down with each individual and make sure they understand what they need to do differently and how. Address skill gaps with training, mentoring or coaching. If staff needs to be reassigned or removed, this is the time to do it.

5. Personalize the Metrics:
   Help each individual understand how their actions “move the needle” in achieving the targeted measures of success. Show how points of contact roll up individual action into teamwork, and impact other key metrics. This creates self-awareness, helps change behavior, and provides a framework each person can use to prioritize their actions.

6. Invest in Building Confidence:
   Instill self-belief and restore lost confidence within your organization. Like in sports, an organization’s “mental game” gets dented in the face of questions and doubts about performance. Celebrate successes, use verbal persuasion, build positive imagery, and induce a state of “relaxed concentration”. Work from the individual up.

7. Track, Monitor & Tweak:
   Build a self-reinforcing culture of performance. Not a one-time fix.

Small companies don’t have the time, resources, or temperament to apply classic Six Sigma, LEAN, or other rigorous techniques. This 7-Step approach will harness the positive energy of employees and associates to improve performance in ways that delight customers. It will also create strong alignment between what the business aims to achieve, and how the organization directs and manages its attention.

Thank you for the support over the last few months as I transitioned from a “traditional” business to a start up entrepreneurial role. … While I know the road to success will be challenging–as it should be–the support of the great staff at Res Partners has prepared me for the journey in a way that I feel confident will lead to success for me and my company. The insights and advice gained have been invaluable and I highly recommend that anyone seeking to embark in this direction take advantage of the services and expertise of Res Partners. Your friendship and professional counsel have been instrumental in my progress and I appreciate your efforts on my behalf.

- Steve Morgan, CEO American Clean Energy

“I have been using Res Partners’ on-demand suite of highly experienced executives since September 2009. The complexity of my business had grown beyond my own knowledge, and those of my key employees. I needed the skills and wisdom of battle-tested senior executives across a mix of different disciplines to make better-informed decisions, mitigate significant risks and help improve my business. Now, with one phone call to Res Partners, I can quickly pull in the right combination of executives, at the right time and for just the amount of time needed, at a fixed price I can afford. Res Partners is the only company I’ve found who can offer this unique style of service.”

– Dr. Jurij Petrin, CEO Pharmaceutical Regulatory Services, Inc.

Client Situation:

A tier one automotive supplier was looking to diversify their revenue stream and product offerings by expanding into the fulfillment of sample medications and literature for the pharmaceutical industry. Their expansion was enabled by partnership with a third company. The challenge was to maintain the company’s preferred supplier status within the automotive industry while cost effectively setting up the processes and procedures to support their expanded business plan. Res Partner’s led the identification and implementation of the new business process and associated regulatory filings needed. This included the initial filing within the controlling state along with supporting the filing of licenses within all 50 states.

What We Did:

In order to establish a base understanding of what tasks needed to be implemented an audit of the facility was conducted along with their existing procedures (the organization is ISO certified). In conjunction with the senior management team a project plan with key deliverables was drawn up and agreed upon. The Res Partner’s Consulting Principal then conducted a training program in order to educate the organization on:

• the new business process for fulfilling pharmaceutical samples and literature
• what the regulatory agencies would require; and
• a perspective on pharmaceutical clients would expect.

The next step was a detailed physical audit of the location, which resulted in recommendations to corrected noted deficiencies in the facility. These recommendations were approved and implemented within the building. In addition, the current organization and its competencies were reviewed and subsequent recommendations were made for required organizational changes. Once this was accomplished the organizations current process flows were reviewed to ensure the organization continues to maintain their ISO certification. We then established a base of required process a flows and Standard Operating Procedures (SOP’s) that had to be written and approved. The Res Partner’s Consulting Principal generated these necessary documents to maintain the ISO certification. Once completed these documents were reviewed and approved by the company’s management team, they were communicated and implemented throughout the organization. Our last set of steps was to submit the proper paper work with the state, which was coordinated by the Res Partner’s Consulting Principal, and the actual audit scheduled for the organization.

Results:

The organization successfully passed the audit conducted by the state and they were granted their pharmaceutical distribution license, at the end of audit, by the inspector. The state inspector made a strong recommendation that other organizations should follow this company’s lead on how to operate. A Res Partner’s Consulting Principal coordinated the filings for the other state licenses’ and the company is in final negotiations for their first supply agreement.

Client Situation:

A large, global pharmaceutical company determined its product complaint handling program was inefficient and considered a significant compliance risk by the Global Quality Management organization. Over 1000 product complaints were past due and the existing organization did not have basic tools in place to maintain a compliant quality system. The instructions describing how product complaints were to be handled were split into 12 different, often contradictory Standard Operating Procedures (SOPs). The product complaint group did not have a method or system to track due dates for investigating and closing product complaints, and the personnel within the department did not work together as a team to assure organizational objectives were met.

The client asked us to analyze their existing processes, systems, procedures, and personnel; provide recommendations for improvement; and implement the recommendations. The project required us to meet tactical business needs (e.g., investigating and closing new and existing product complaints) as well as address strategic initiatives, such as implementing a sustainable, effective product complaint management program.

What We Did:

We first focused on assuring existing product complaints did not pose a threat to product quality or patient safety. Therefore all existing complaints were assessed and prioritized based on their potential severity. Next, we prioritized based on the “age” of the product complaint. All product complaints were entered into an interim spreadsheet that was used to track their status. In parallel, daily “stand up” meetings were held to discuss the status of new and existing complaints and to assure product complaint team members were working together to reduce the existing number of overdue product complaints.We then developed functional flow charts to identify the “AS IS” product complaint process. Using appropriate metrics we identified inefficiencies within the existing product complaint process, which may adversely impact product quality, patient safety, and compliance. A “TO BE” functional flow chart was developed based upon input from the various stakeholders involved in the product complaint process, including manufacturing, distribution, quality control, and regulatory affairs.

The TO BE functional flow was used to develop a single, unified SOP which defined the new product complaint handling process. The functional flow charts were also used as input into a User Requirements Specification (URS) for a computer system which was implemented for entry, tracking, trending, and reporting of product complaints. A URS is required by regulatory agencies and identifies the “intended use” of the computer system. The computer system was implemented and validated in a manner fully compliant with regulatory requirements. A second SOP was developed to describe the operation and maintenance of the computer system.

Results:

The project resulted in some pretty significant results:

• Within 4 months of project completion the product complaint backlog dropped from 1000 overdue complaints to 100 complaints (open 30 days or less).
• The myriad of existing, contradictory and non-compliant SOPs had been reduced from 12 to 2.
• A new, fully compliant computerized system was implemented to manage the product complaint process. This system later became a model for the global product complaint handling system.
• Most importantly, the product complaint team gained new work skills and practices which allowed them to sustain the levels of compliance achieved.

Client Situation:

An international not-for-profit professional society found that it’s Chief Financial Officer was leaving for a new position after 20 years with the organization. With very little notice and nobody on the bench, the Executive Director was in a bit of a spot. Nobody was familiar with the antiquated systems or processes in the Finance Department. Year end and the annual audit were fast approaching. They needed an experienced person who could “hit the ground running” with very little training. The two fold problem was not only to close out the year, produce year end financials and work with the outside audit firm to complete the required audit, but to also search, help select and train the new permanent CFO.

What We Did:

Within two days of meeting the Executive Director we placed a senior financial executive at the client site for two weeks with the outgoing CFO. After just two weeks of basic process training we took over the financial function for the multi-million dollar international society. During this time period we learned and understood the marketing, sales, internal systems and financial functions. We successfully closed out the fiscal year, prepared year end financials and worked with the outside audit firm to complete the required annual audit. During our tenure we discovered many areas for improvement in the systems and processes, since the incumbent had been employed for such an extended period of time many systems were never upgraded. Within five months of taking over the Finance function, we completed a successful search for the right CFO candidate, who met all the specifications for the position. Our senior staff than trained and mentored the incoming permanent CFO over the next few months. During this time frame we also worked on several projects to update and improve the reporting functions with new software and re-trained the existing staff.

Results:

Within one year of becoming the Interim CFO we successfully completed several projects for this client. First, we managed the Finance function on an interim basis, oversaw the transition, and found and trained the replacement CFO. Second, we updated the client’s accounting software, integrated the new software with the front end agency management software, and trained the existing staff on the new systems. Third, we streamlined the audit process and engaged a new audit firm. There were also several smaller ad-hoc projects completed along the way. The software update and streamlining produced a 20% improvement in the time required to complete the annual reporting. It also streamlined the associated processes so the CFO could handle additional duties and work more closely with the Executive Director on several management issues that arose during our tenure. The society and its Board were extremely grateful for the speed and efficiency in which we were able to grasp their systems and processes and improve them as we handled the immediate need for an Interim CFO.

Being forced to bootstrap for a while can be a good thing because it forces entrepreneurs to be creative and to focus on what is truly important to move the business forward. That said, there comes a point in almost any business’ lifecycle where the business cannot be propelled forward on human capital alone.

Whenever I have had the opportunity to work with early stage entrepreneurs there has been one universal constant – the need to raise financial capital. Having participated in both successful and unsuccessful capital raises, as well as having observed others who have been on both sides of the fence, here are some key mistakes to avoid when seeking to raise capital.

1. Underestimating the amount of time and effort it will take to raise capital:
   
   Depending on whether you are looking to raise capital from friends and family, angel investors or venture capital, the time to successfully navigate a capital raise will vary. At a minimum, assume that it will take six months and more likely it will take a year of nearly full time effort to network, write a business plan, get introductions to potential investors, pitch, address follow-ups, secure term sheets, support due diligence, negotiate and close a deal. Too often, entrepreneurs wait until they really need the money to commence the capital raising process resulting in a loss of negotiating leverage. The best time to look for money is when it is not desperately needed.
   
   
   Additionally, it is not unreasonable to assume that you could need to contact well over 100 potential investors to end up with one who will ultimately invest. As a result, it is never too early to reach out to potential investors (see “When do I…?” by Lou Wagman).
   
   
   

2. Not being able to communicate your business’ value proposition in 30 seconds or less, in a manner that even a third-grader can understand:
   
   No one knows the businesses better than the entrepreneur. Every entrepreneur wants others, particularly investors, to see what they see and to understand why they believe their start-up venture is so valuable. At the same time, many of them have difficulty boiling down the core of their business value proposition to one or two phrases. When you live with your business everyday it is easy to lose the ability to see the forest through the trees.
   
   
   Investors, especially in the current market environment, receive so many business plans that they cannot possibly review them all at a level of detail necessary to make informed judgments. As a result, they don’t even try. When you get the attention of an investor, at most, you will have it for a few minutes and more likely it will be only a few seconds. As such, it is critical to be able to communicate what your business does and its value proposition in 30 seconds or less. If you are successful in doing this, you will significantly increase your chances of attracting legitimate interest in your business from potential sources of financing.
   
   
   

3. Telling an investor that you know the answer to a question you really don’t:
   
   One of the bigger mistakes I have seen entrepreneurs make is to answer every possible question that is asked of them whether they know the answer or not. The problem with answering a question you don’t know the answer to is that if and when it does become apparent to the investor that you’re “spinning” it is nearly impossible to regain the lost credibility that results. There is absolutely nothing wrong with saying “I don’t know, but I will find out and get back to you on that”. I believe that investors look for realism and some measure of humility in their management teams. For them, it’s a red flag when that’s missing.

   
   

4. Failing to identify and pursue “strategic” investors:
   
   When you raise capital from “strategic” investors, i.e., those who not only understand your business but who are also deeply ingrained and connected to your industry and target market, you get a lot more than just money. Strategic investors can be immensely valuable and function as a catalyst to help your business get traction and grow in your target market. Conversely, “non-strategic” investors who do not have the depth of contacts or understanding of your business expect to take on a role in your business that is at best focused on oversight and at worst passive. They can often become an impediment to long-term success since they don’t fully understand the implications of decisions you might make and tend to react to circumstances, particularly negative ones, through a filter that can be best described as “protecting their investment”. That can lead to sub-optimal outcomes for your business.

   
   

5. Failing to raise enough capital to sustain the business for at least 18 months, if not longer:
   
   Ideally, entrepreneurs would like to lead their businesses to success without the injection of outside capital. When a capital infusion becomes necessary, entrepreneurs often think they will need to raise capital only once to get to a point where the business becomes self-sustaining. Unfortunately, that rarely happens. It is difficult to anticipate a whole host of external and internal factors, e.g., where the next revenue generating opportunity will come from, that will change the capital needs of the business over time. It is rare that the initial “go to market” strategy of a start-up survives for very long.

   
   
   Most businesses have to adjust and adapt to changing market dynamics and conditions as they mature thus requiring maximum flexibility. As I mentioned earlier (#1 above), it can take up to a year to complete a successful capital raise. The entrepreneur, responsible for raising capital, ends up dedicating so much time to the task that their ability to focus on the job of running the business takes a back seat. That slows down overall progress towards critical milestones. It is very important that each time you make the necessary effort to raise capital, you raise enough to give yourself ample time before the next capital raise to be able to focus on growing your business.

Raising capital can be a daunting task. However, being able to succinctly communicate your business’ value proposition, engaging potential investors with a degree of humility, targeting appropriate “strategic” investors while anticipating both the amount of capital you will need and the amount of time it is likely to take will significantly enhance your chances of completing a successful capital raise.

How do you know if you have a problem with data and information quality? There are a number of simple indicators to look for:

• First, how much time does the organization spend correcting inaccurate data, scrambling to compile information across multiple databases? Are you struggling to integrate disparate data or looking for missing data?

• Second, count how many different versions of the same information reside in multiple databases or locations. These can be in corporate databases, individual PC databases or MS documents like Excel and Word.
• Third, how often do you fail to find a given piece of information or find multiple versions of the same piece of data?

If your organization has experienced any of these conditions, you certainly have data quality problems.

Why do senior executives not know about the high cost of poor quality information within their organization? They are generally isolated from the business processes that utilize the poor data. When they ask someone to get information for them, senior executives do not personally see how much effort goes into acquiring and verifying the information before it winds up on their desk.

One major pharmaceutical organization did not realize how poor their customer database was until after several warning signs were ignored. A senior marketing leader commented about the difficulty they were having in making an impact on targeted prescribers. He reported that 25% of all their expensive, glossy marketing brochures were being returned by the postal service due to incorrect mailing addresses. Unfortunately, the 25% represents only what was being returned back to the company. There was an estimated 5% to 10% more that were simply being thrown away and not being given back to the postal service for return to sender. They had no idea how many were reaching their intended target. There was also a direct impact on the sales force following territory realignments. Frequently sales reps in new territories would take up to six months to identify and locate all of their new prescribers. Inaccurate customer data had a major impact on this organization and its bottom line.

There are well documented cases of companies with multiple customer data files. One national bank had over 250 different customer databases. A telecommunications company had over 800 customer databases. How much time and effort would it take to analyze a simple question like who is our best customer?

Most organizations today don’t monitor or analyze the quality of their data and information. Most do not have any formal processes to address quality issues with their data and information. In fact, most organizations cannot even identify who is responsible or accountable for the accuracy of the information utilized by their given business units.

Experts estimate that poor quality information cost organization’s between 20% to 35% of their operating revenue due to process failures and information scrape and rework. This number could increase up to 40% for organizations which are information intensive, such as banks, insurance and pharmaceutical companies.

Poor quality data has a significant impact on business processes, productivity and ultimately the bottom line. It is a threat to the enterprise. However, by creating a process to continuously improve data and ensure its accuracy the business will have established a competitive advantage.

]]> http://res-partners.com/lesson-learned/2010/poor-quality-data-cost/feed/ http://res-partners.com/lesson-learned/2010/more-hr-help/ http://res-partners.com/lesson-learned/2010/more-hr-help/#comments Mon, 07 Jun 2010 01:42:59 +0000 admin http://res-partners.com/?p=1142 by Iona Harding



I am often contacted by CEOs of small or mid-sized businesses with a plea that sounds something like this: “Help, I need more HR.” In every case, they had two things in common, regardless of their industry. First, their company had hit an inflection point. These are points where people problems arise as a natural by-product of company growth and development, resulting in loss of engagement, turnover, frustration, employee relations issues (usually because of poor supervision), pay and benefits costs and complexity. Second, they had NO HR professional on staff or, had an administrator with the title HR Manager, who basically processed paperwork.

In all my years as an HR executive and consultant, I have rarely seen a start-up “start” with an HR strategy or an HR professional on the founding team. I’m not suggesting that they always should. However, I am suggesting that they can anticipate and think strategically about a people and talent strategy and bring on HR expertise earlier rather than later. Companies that do this will have a true strategic advantage in the marketplace.

The table below outlines some inflection points for small businesses and a few of the HR opportunities and challenges that business leaders can anticipate and plan for.

Inflection Point		Number of Employees		Some HR Management Opportunities and Challenges
Conception to Inception Hiring beyond founders Launch, market and sell product or service to initial customers		10 – 12		Hire or “rent” critical talent? Pay – individualized /market based / at risk / equity? Values – which ones are critical to your success?
Inception to Initial Growth Continue to market, sell and service existing customers; grow customer base; build volume Grow revenue, keep costs low		12 - 20		Develop workforce plan for next 1 -2 years What talent do you need for the long-term vs. short-term? What skills? How do you find them? Pay – begin to rationalize & standardize. Supervision – create some structure. Culture – what type of culture do you want to create?
Early Growth Continue to serve existing customers; add new customers; maybe expand offerings; juggle many concurrent projects Grow revenue Manage cost/expense issues – balance with growth		20 - 30		Develop and implement talent and performance management strategy. Rationalize pay, bonus structure. Introduce some benefits. Supervision—select & develop the RIGHT people. Behaviors – what does it look like to live the culture, values and achieve results here? Handle employee relations, retention issues.
Ongoing Growth More work with repeat customers; more new customers; more products and/or services; more customer problems; more competition Cost/expense issues arising		30 - 50		Measure effectiveness of existing programs & processes, identify opportunities, and adjust. Align talent & performance management processes, pay, benefits, engagement programs—everything! Develop policies and more formal processes. Implement more formal communication processes – for everything, not just HR stuff. Communicate, communicate, communicate!

So, HOW is this done and WHO does it?

1. Incorporate HR as a key facet of your regular strategic and operational planning process. Manage “human” capital the same way you manage tangible capital. Plan to maximize utilization of human capital with a projected target ROI.
2. In the early stages, use an experienced senior consultant to help develop the people strategy and plan. This can be reviewed and revised as your business grows. The consultant can also coach and mentor your HR manager – so you don’t “outgrow” this individual.
3. Over hire an HR manager when you hit a size of 20 to 30 employees - someone who has the desire and potential to function as a REAL strategic HR business partner. Not someone who will just fill out forms, process paperwork and follow orders. You need someone who can grow with your business as well as anticipate and help manage people challenges as they get more complex.
4. YOU own this – you the CEO, the COO, the CFO, the managing partner, the manager, the HR professional. You own this responsibility together.
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