HR, Operations, Startup Sales, Startups

The one thing about meritocracy

Is that it can be not all it’s cracked up to be. At scale it’s difficult.

It’s much easier to point to someone’s tenure and title and say she or he is in line for the next promotion. They’ve “earned” it and really put in the time.

While this may or may not be the case, many idealistic startups prefer meritocracy.

The idea of a “level playing field,” free of bias, where individuals are rewarded based on capability is attractive to everyone.

Who doesn’t want meritocracy?

I believe it’s natural for larger organizations to fall into this pattern.

It is far more difficult to follow the tenure playbook than it is to run rigorous HR reviews, 360-degree feedback, keeping HR software updated, etc.

But also, it’s even far more difficult to do the above while trying to find the elusive product-market fit; to close deals when you’re still not 100% sure what you’re doing is correct as a startup organization in the first place.

Who has time for that?

So generally what I believe happens is that that initial intention eventually is replaced by the usual bureaucracy and politics. Biases and human flaws are magnified at scale.

And so far, there doesn’t seem to be many well-known, proven cases of a meritocratic organization succeeding.

So what are organizations supposed to do then?

The closest things we seem to have towards this utopia of an organization, is where extraordinary entrepreneurs and founders have iterated and built up scalable, more objective systems. And even then, they acknowledge the bias and inject into their culture

Ray Dalio’s Bridgewater Associates is the closest case in which he talks in depth about how he built up the BA culture over time; created HR systems for assessing and analyzing personality; built software to enhance accountability; documentation and content to track results and individual track records; and dives further into using concepts such as “believability” and honest feedback to achieve something.

(Suggestion: Read Principles as soon as you can.)

So why does this matter at an early stage?

If you’re a founder, it’s your responsibility to consider, build, and combat the challenges that the organization is going to face down the line.

In the startup world, everything is about scalability.

If those systems/frameworks are not in place or being built iteratively from the beginning, then it becomes exponentially more difficult to institute them successfully later on when you need every ounce of juice to hit your next KPI towards exit.

And as an individual contributor?

When your prospective CEO tells you that the organization is based on meritocracy, exercise caution.

Specifically ask how she or he plans on maintaining that meritocracy at scale and who is going to be responsible for instituting those as the startup evolves.

Ask how is someone going to objectively track meritocracy to ensure that it remains a founding principle of the startup.

Consider the down-the-line consequences – what happens if we’re acquired? How can you ensure that we’re going to remain a meritocracy?

Ask for title bumps. And often.

In early stage organizations, it might go “against” meritocratic values to have a big title. But the value of those titles do exist outside of your startup silo – they exist in public markets all over the world.

If a public company is going to acquire the startup you’re joining, consider how they will view your title.

Will the title port over for all the hard work you put into the startup system that lead to the acquisition?

Or is it a better idea to assume that your efforts may not be fully recognized? And that the higher your title at the time of acquisition, the higher your title at the acquiring corporation? Or that all of the associated perks and benefits are actually tied to that title being assigned to you by the acquiring corporation?

I’d argue the latter. Always assume the worst.

And assume that that meritocracy, being touted as a meritocracy, is likely not one and allow them to prove it to you.