How to Hire for Scale
Many business owners are quick to view staffing as nothing but an overhead cost driver. However, this way of thinking is short-sighted and one-dimensional. To truly drive growth for your DTC brand, it's important to connect your staffing plan to your scaling strategy and use personnel to drive your strategic goals and initiatives forward.
Clearly Connect Every Position to Your Strategy
Why do businesses hire people? Great strategic leaders hire people for one main reason - to execute on the business's strategy. As such, the first thing you should do when building out your staffing plan is ensure that every position on your current and future org chart has a clear connection to driving your strategy forward. In other words, you should never hire for a position if you cannot tie it back to the achievement of your strategic plan.
Clearly Connect Every Position to Profit and Cash Flow
If you have a sound strategic plan, then hiring people to execute on it should drive improvements in profit, the CCC (cash conversion cycle), and ultimately cash flow. To achieve this, it's important to clearly connect every position in your business to drivers of profits and cash flow. Additionally, you need to ensure that every person on your team knows their unique contribution to the profit and CCC equations.
For example, does your VP of Marketing understand how their return on ad spend (ROAS) and marketing efficiency ratio (MER) connect to your company’s contribution margin, bottom line, and ultimately cash flow? Does your VP of Operations understand how their purchasing decisions drive inventory days, which drives changes in the CCC and ultimately cash flow? When every person on your team is required to help improve profit and cash flow - and knows the levers they can use to do so - your team will inevitably drive growth and improvements in financial performance.
A Few Tips to Consider
So, this all sounds great – but how do you execute staffing from a strategic perspective?
I’m glad you asked!
Here are a few tips:
Align job descriptions with your strategic plan.
Hire first for positions that will remove a strategic constraint or bottleneck. For example – if sales growth is a key strategic initiative and you’ve identified ad buying talent as a major constraint, focus on hiring for this position first instead of other roles that won’t immediately remove major strategic bottlenecks.
Hire first for positions that will remove a strategic constraint or bottleneck. For example – if sales growth is a key strategic initiative and you’ve identified ad buying talent as a major constraint, focus on hiring for this position first instead of other roles that won’t immediately remove major strategic bottlenecks.
Identify 30, 60 and 90-day priorities for each position that align with key milestones of your strategic goals and initiatives.
Identify KPIs for each position that measure progress towards achieving strategic objectives.
Focus on hiring people who are aligned with your company’s values and culture, which is a key component of your strategic plan.
Have a structured interview process that includes behavioral questions and assessments that test for the character and technical aptitude needed to drive your strategic plan forward.
Hire people who are genuinely passionate and excited about bringing your strategic plan to life. It’s always helpful to remember that the best work is done at the intersection of passion and proficiency. You can teach and develop proficiency, but you can’t teach passion, so make sure you filter for this in the interviewing process.
Conclusion
In conclusion, the next time you work on the staffing plan for your growing DTC brand, don't just view headcount as a cost driver. Instead, think about how each position on your org chart will drive your business forward toward achieving its strategic goals. By viewing staffing through this strategic lens, you'll set your growing brand up for scaling success and maximize your odds of achieving your vision.
One final thought before closing - It's also important to keep in mind that hiring for scale doesn't always mean adding more people to your team. It could also mean investing in technology, automation, or outsourcing to free up your existing team's time to focus on strategic initiatives.
One key role to consider outsourcing as your brand grows is the CFO position. Growing DTC brands usually need a CFO before they can afford to hire one full time. As a result, hiring a part-time, outsourced CFO is a great option for getting the CFO you need to scale without the full-time salary.
At Free to Grow CFO we provide founders of growing DTC brands the financial insights they need to make fast, effective business decisions with confidence. And – we’re experts at helping founders create staffing plans that drive forward strategic execution.
Whether you choose to enlist the help of a Fractional CFO or take a stab at it alone, building out a staffing plan around the achievement of your strategy is guaranteed to be a worthwhile step towards achieving your brand’s growth goals.
Until next time, scale on!
