Lattice and Faire on Scaling People

I. Session Takeaways

Date: April 2024

Scaling the People Function at Lattice and Faire

Lattice

• They didn’t hire their first recruiters until 75 employees. Even at 100 people, they only had 3 recruiters
• They were able to do this because Jack set the expectation that every manager at Lattice was also a recruiter
• In his view, it created good incentives and an ownership mentality - managers didn’t wait around to bring talent in
• The downside of this approach is you don’t have dedicated sourcing resources and it can become a bottleneck
• Lattice also hired a People Ops Manager to handle day-to-day work. At ~100 people, they hired a People director
• In hindsight, he would have waited till a few hundred people to hire a People director. At the early stages, you just need a generalist that can build the foundations. At scale, you need a strategic thought partner and a Director or Head of People becomes more appropriate

Jack on waiting to hire a Director/Head of People

“At 100 people, you still really want a Doer. The People Ops Role is still very tactical at that stage. It's not until a couple 100 employees where a real executive who is a strategic leader is a huge benefit. But putting that person in place when the company is small can actually be a cost depending on what's going on. They might want to do things that are actually just a tax on the business. If they come in and they want to do levels, ladders and all this stuff very early, I'm not sure that that's a good use of people's time and brain space [at 100 employees].”

Faire

• Faire hired Neervi as Head of People at ~200 people. Prior to that, there was one generalist running HR
• They had a small recruiting team with 3 recruiters and a couple coordinators to help with growing the team
• The first recruiter was not hired until 50-70 people. The recruiter was focused on scaling the EPD team
• Like Lattice, Faire also had the expectation that everyone at Faire had a responsibility to hire/source talent
• Early on, the benefit of not hiring recruiters is it helps the founding team nail their employer value prop. As you source candidates, you can see how the pitch is landing and the type of candidates you're attracting. This lets you iterate the messaging to fine tune hiring to reach the candidates you are satisfied with.

Neervi on the benefit of holding off on building out recruiting

“Your job is to hire great people. And it's not just about the hiring process and being able to pitch your company consistently but it's also about identifying what are the values that we want? What are the behaviors that we want to show up? By doing the hiring yourself, you're able to see what that market fit looks like and what type of personas are we getting? What type of skill sets are we getting? You get that firsthand experience and I think you're able to find the type of person you want working at your company to a higher degree than if you bring in a recruiter much earlier on.”

Measuring Recruiter Performance

• Number of roles that can be closed depends on the level and the function. In general:
  • If the intended role is in sales (i.e., an account exec) or CX, recruiters should be able to move fast
  • If its a more senior role or a technical role, it will take longer to source and close candidates
  • Remote vs. in-person, where you are hiring, role, diversity elements all will impact your funnel
• Below is how Neervi would come up with the right set of metrics for recruiters

Tactic: How Faire comes up with the right KPIs for recruiters?

1. Market dynamics: Consider what is happening in the market. Is there a large pool of talent available? For example, recruiting and sales have seen layoffs recently, so there is a great talent pool available and ready for hire. Other roles are harder to hire for, and will take time.

2. Understand your priorities: Consider whether you want to optimize for speed or volume. Make these priorities clear to your recruiting team.

3. Ask your recruiters: Based on role and the spec, recruiters will know the right funnel metrics to target. Ask your recruiters to give you insight into the funnel to understand the number of the candidates they’ll need to source for hires. You can also get feedback from external parties, but your internal team will have the most context.

4. Iterate: Iterate based on performance.

Maintaining Quality as Recruiting Scales

• Measure recruiters not just on whether they are hitting a target hire number, but also whether those hires succeed
• Even though this is a lagging indicator, it helps keep quality at the forefront of recruiters minds when sourcing
• You can also learn by looking at your most successful hires. Try to understand where they came from and their background and feed this information back to recruiters. Early on, this can be a rough evaluation of data. As you get larger, you can run broader quality of hire studies.

Example: How Lattice maintained quality at scale

• When adding a recruiter, Jack was paranoid they would just close roles and not care about quality
• When evaluating recruiters, he emphasized the percentage of people who got promotions, got top review scores.
• He wanted the conversation to not just be about the number of closed roles, but also quality of hires

Example: How Dropbox used hiring studies to qualify the hiring funnel better

• When Neervi was at Dropbox, they did a quality of hire study. This was a direct feedback loop to recruiting
• They found that a high % of Google engineers were hitting lower performance scores versus the average
• This data was shared directly back with the recruiting team to inform candidate outreach and sourcing

Best Practices for Titles

Titles at Lattice

• Lattice introduced titles at ~100 employees. In hindsight, Jack wishes he held on past 100+ employees
• From 30-100 employees, team members would approach Jack and ask for titles because of the scope of their role
• Employees would often advocate that it would be worth it from an external signaling perspective to have titles
• Up until 100 employees, they used descriptive titles like “lead”, “head of”, “product” vs. “director, VP, senior VP”
• When they introduced titles, it came with an incremental cost to the business. There are two issues:
  • Once you hand out titles, employees will immediately ask for higher compensation
  • People will start comparing themselves to leaders with titles and you’ll start getting more questions
• Titles/levels are eventually required, but they come with cost. Hold off as long as possible before introducing titles.
  • You can get away with one C-level or a VP but do not broadly introduces titles for as long as possible
  • This is what happened with Lattice - they had one C-level person on the team prior to 100 people

Jack on titles

“There are two issues with it. One, there is a give a mouse a cookie issue. [When you give someone a title] they immediately start looking at levels and comp bands and they come and ask for a $200k raise. The other thing is, across the company, they look over at the person in Product with a directors title and they are crushing it in sales and they start comparing themselves [to the person in product].” 

Titles at Faire

• Faire did not introduce formal leveling and titles until ~400 people. Only the founding team and their CFO had titles. Everyone else had titles like “Engineer” or “Head of Ops.” They did this because when people are given titles, there is an associated operational tax.

• They would use titles like “Engineering Manager” for managers, but there was no formal leveling (e.g., senior manager, director, senior director, etc). 

• On the backend, they used compensation benchmarks to define compensation well before formal levels were introduced. These were not employee facing, so the broader company was not impacted or aware of these.

• Process and policies as it relates to hierarchical structure turns into a battle as a company scales. You will constantly face demand for structure from employees and you’ll have to push back to not add unnecessary bureaucratic processes that reduce velocity

Neervi on introducing new processes at scale

“We are in the adolescent stage of that exact thing. We have folks who have been here since 50 people and anything we roll out seems overly burdensome. They are used to walking by Max’s desk and saying I have a good idea and getting a thumbs up and going out and doing it. Now we are 900+ people and we have people who are coming from the Metas and Googles of the world who are just trying to find their way. You need to be careful about not having too much of this because it does lead to enablement issues and jumping through more hoops to get their jobs done.” 

Tactic: How Lattice and Faire held off on titles until the right time?

Lattice

• Align incentives without driving title growth. Jack would compensate generously (cash and equity)
• Let employees market themselves after they leave. Jack would tell employees they can put whatever they want on Linkedin when they leave. This protected against the “fear” that they wouldn’t get recognition after they left
• Jack was very transparent with the company. At All Hands, he would say we are not doing X for these reasons or we are introducing Y process for these reasons. This was helpful in creating company wide alignment

Jack on being transparent with the company

“There comes a moment when [no titles] is completely backwards wrong. And all of a sudden the cost of operating like this, in my view, comes with a tremendous lack of clarity. So there is a day when you flip the switch. I always was a believer in not hiding the thinking but in narrating this stuff. We even talked about this at all hands to be like, hey, once we do this, these are the things that are going to happen. And probably many of you have worked at companies where these things happen. We're just trying to avoid it [for now].”

Faire

• Align incentives without emphasizing title. Faire would emphasize that everyone at Faire has the same Northstar and that employees will continue 1) grow their career and 2) grow their compensation over time. It just won’t necessarily be attached to title growth.

Neervi on aligning the employee narrative

“We continue to lean into this narrative, which is, we're all here like we all have the same Northstar. We're here to do the work and by the way, we're still paying you, we're still rewarding you, we're still giving you net new challenging problems to solve. Those things are still happening, right. If that's what you want your title for, we're giving you those things anyways. Eventually, we'll introduce [titles] when we need to.”

Best Practices for Performance Management

• At <100 people people, feedback should be shared in real-time given the rate of change in the business
• Waiting for a performance review process (or even having one at all) creates unnecessary bureaucracy
• That said, performance management can be a great way to force the team to step back and reflect on feedback
• Jack suggests introducing a lightweight performance management process at ~50 people. When you make these changes, be transparent with people about why the company is doing this, how long reviews should take, what the quality should look like, and how it aligns with your values. You don’t want to create unnecessary bureaucracy. 
• At scale, performance management becomes necessary to ensure feedback is shared by managers
• There are formats to keep feedback light even at scale. At Deloitte (>100K FTEs), feedback is shared via email

Example: Performance Reviews at Lattice

• Performance management looked very different at 50 people versus 600 people (current scale)

50 People

• Lattice set expectations with the team that feedback should be shared in real-time versus waiting for a review
• They used performance reviews as an opportunity for people to take a step back and be thoughtful with feedback 
• At this stage, there is so much going on that they wanted to create mechanisms to help people slow down/reflect
• Management transactions (e.g., promotions, team changes, etc) happened in real-time vs. during the process

600 People

• Ideally, feedback is shared frequently but it is unrealistic to assume everyone is good at sharing feedback
• Performance reviews become where management transactions happen (e.g., promotions, feedback sharing)
• At this scale, the system helps ensure it is happening at scale across all your teams/people

Jack on performance reviews at Lattice

“At 600 people it’s going to be a moment when real transactions are going to happen around the performance review and the performance management process. To me and 50 to 100 employees, the spirit of it is different. The review process is just us asking everybody to catch their breath, pull themselves away from all of the work that they're doing, and take a second to be really thoughtful and intentional in their feedback and and like having those conversations that you might not do when the flurry of a, you know, chaotic day or week or month. What we would tell people was that like, as a manager in general, at this stage with 50 people, you owe it to people to have extreme clarity in real-time for them on what needs to be better. And so if there's a hard conversation to have about someone's performance or if you do want to promote somebody or if you want somebody's comp to change. Those conversations should be super real time and not waiting for a performance review. When you're 500 people it's unrealistic to systemically get all of those conversations to happen real time. [At 500 people], the performance management process becomes the place [where management transactions happen].”

Creating a Culture of Ownership and Intensity

• The culture of a place comes from the founders and not from the people team
• You need to set the tone of sharing feedback regularly with your team, so they see it as an expectation

Real-time feedback at Faire

• Max (founder/CEO of Faire) is a tough leader, but people learned a ton from him. He sets the tone
• Max can take hard feedback himself, but is demanding with his team and is not afraid to share live feedback
• He can be in a meeting and drill into one data point and the person who owns that data really feels it
• The culture is high performance and intense - meaning even the best people feel like they can improve
• They’ve had to counter this by more actively celebrating top performers at the company

Real-time feedback at Lattice

• Jack would constantly ask managers why they hadn’t fired/promoted people yet or would dig into team gaps
• You need to be equally obsessive on best and worst performers. There are employees that grow fast and you need to let them grow. The company needs to match their best people’s growth curve. The company needs to promote people aggressively. It is on you to drive these decisions and make sure it's happening.
• While Jack felt this was “annoying” to his team, it set the tone of ownership and intensity at the manager layer

Jack on checking in with managers to set the tone of intensity at the company

“I was constantly talking to managers about people who they mentioned before but were still at the company or who the best person on their team was and why haven’t you promoted them. There were four of us at these exec meetings, me, my co-founder, my CTO, COO and CRO and I would constantly be like who are our 5 worst people. They would say we did this last week, but I would say they are still at the company” 

Scaling Ownership and Intensity

• The bigger a company gets, the less employees care. It’s natural that the 50th employee cares less than the 30th
• Therefore, the natural ownership and intensity that early employees have will not scale alongside the business
• Execs become your way to scale intensity because execs care and can crate microcultures in the organization
• As an example, having a head of engineering that pushes on the quality of engineers is a great leverage point

Jack on the 30th versus 500th employee

“My experience has been that the 5th employed cared more than the 30th employed, who cared more than the 500th employee. It’s not irrational. They know their team and their little orbit and not the whole company. As the 9th employee they can see their work bend the curve of the company and the 50th can’t see that.” 

Jack on using execs to scale intensity

“Great execs are the only way out. Once we got into the rhythm of hiring new execs there was always a search going. It was like painting the golden gate bridge, by the time you get to the end, it begins to chip and you need to paint again.”

Best Practices for Managers

• Most managers (both first time and experienced) need training. It falls across 3 dimensions:
  • 1. Recruiting and hiring: Finding and hiring great people
  • 2. Performance management: Delivering continuous positive and negative feedback
  • 3. Manager tactics: How to show up, 1-1s, getting to know your people, etc.  

Manager Training at Faire

• Faire invested a lot of time in communicating that feedback should be delivered every week
• This was challenging for people at the company because it requires you to have hard conversations regularly
• Main area where they had to develop more rigor was training managers to deliver feedback to the bottom 5%

Manager Training at Lattice

• They had a lot of internal promotions that became managers. 
• There is a tradeoff for internal promotions as it takes reps for managers to become “good” managers
• On recruiting, they found it to be a teachable thing and that the best ICs were capable of finding great people
• In other words, amazing engineers are capable of finding other great engineers. This also worked in sales
• If you have 1-2 experienced leaders, task them with acting as mentors to other managers at the company

Jack on first-time managers

“Many managers were first time managers. There were at least 2 real execs who were experienced managers of managers when we had 75 people who acted as internal mentors for managers as well.” 

Best Practices for Feedback Delivery

• Feedback is a deep discipline, which you can always get better at 
• The 80/20 of feedback is simply giving it at all. It’s uncomfortable, so a lot of people choke on it/don’t bring it up
• Three things to keep in mind: 1) do it live, 2) do it with care, and 3) don’t ramble
• If it becomes a continuous thing, put it in written form. Don’t do anything written unless it is habitual
• Jack practiced by delivering feedback with people who are obviously good and in low stake settings 
• This helped him develop the muscle to deliver feedback in tougher situations that were more delicate

Retaining Top Performances

• Bear hug your best performers. You want them to feel fulfilled and to feel like they are growing at the company
• Let your top performers know they are top performers. In high-performance teams, this can sometimes be missed
  • Lattice is very public about celebrating wins and highlighting top performers in settings like all hands
  • Early on, Faire created a “#shoutouts” Slack channel where top performers were recognized
• You won’t know everyone at scale. Make sure your executives nudge you to recognize the top 1% at the company

Neervi on bear hugging top performers

“That comes in the form of giving them hard problems so they can grow. Assuming at this stage you are hiring people who have an expertise in one area but also generalists. In addition to compensation, giving people more things to do to grow them. Also, reminding your leadership team to make people feel appreciated. Let them [top performers] know they are top performers. We have such a high bar for talent that even top performers feel like they can do more and can do better.” 

Aligning Incentives

Example: How Lattice aligned incentives with values

• Assuming that every employee has equity, one thing they talked about is doing the best for the business is doing best for everyone because everyone is a shareholder. They codified this in a value “Ship, Shipmates, Self” that emphasized putting the company and team first. 

• You don’t want to tie performance explicitly to compensation bonuses. If you do this, people will expect bonuses or more equity every time something needs to happen. 

Jack on Ship, Shipmates, Self

“I think one of the things we did that turned out to be the most effective was one of our company values was Ship, Shipmates, Self. It is some nautical thing where the ship comes first, then your teammates, then yourself, which is obviously the opposite of how a human normally would think. And it was one of the things that was talked about in every performance review. [At all hands] We would talk about a case where somebody put the company ahead of themselves or their team and so you can make it this cultural norm. You are compensating people with a lot of praise and recognition. That’s very powerful.