Field Notes: Process & Protocols
I cringe when I hear the words "process" or "protocols" because they evoke images of big corporate-like rigidity, bureaucracy, and slow decision making. However, I'm focused on driving results and outcomes by identifying and tracking key inputs or actions. I've come to appreciate that process and protocols are about how you do work in a way that produces consistent results.
There comes a time in a venture firm’s growth where I’ve found that it's important to take a step back and document key processes or protocols that have emerged inside the firm. I'd recommend focusing this exercise in the following manner:
- What you're doing
- How you're doing it
- Why you're doing it
The standardization that comes with such an effort also allows one to set up systems to consistently measure and analyze output and also test new ideas in a systematic way. I'd also add it helps the firm become more resilient and supports business continuity - things are not sitting inside a single GP's head.
With regards to timing, I've come to find that the timing of such an exercise tends to align nicely with a firm going from Fund 1 to Fund 2. This is generally also ahead of any meaningful expansion of the team (especially investment staff).
I cannot state the importance of doing this ahead of hiring junior investment staff. If you expect a smooth and timely ramp-up period, this is what sets the baseline for any training program. From the conversations I've had with current and former associates, not having key processes and protocols documented created a huge gap in understanding the key parts of the role, frustration around "what success looked like", and made for a longer ramp-up period.
Clearly defining the processes and protocols of a firm's key activity might seem boring but is important to the growth of a firm.