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  • Writer's picturePhimation Strategy Group

Talent Management in Second Stage Companies

Updated June 2, 2021

The shift that HR needs to make

Growing from being in start-up mode to becoming a second stage business, is a substantial change. As a start-up, HR is really about minimizing administrative distractions that get in the way of doing work. As a second stage business, HR plays a central role because talent is the key to success in this stage.

When I think about HR in second stage companies, I’m reminded of Jerry Maguire telling his client, “Help me help you…Help me help you.” Picture the staff of your business saying that to you, asking you for the kinds of strategic HR programs that make working at your company engaging, productive, and rewarding - for them, and for the business.

But many second stage companies don’t have those kinds of programs, because they are struggling to make HR more strategic.

Let’s look in more detail at the shift that happens as a company develops.


Start-up: time horizon – this year

Second stage: time horizon – 2-3 years

A big part of the complexity in Second Stage companies comes from the need for the business to have a longer time horizon. In HR, that longer horizon means that personal development plans need to be developed – and then coordinated across the company…and with the company’s strategy and development itself. That’s much more complicated than the “get the job done” focus of start-ups.

Job descriptions

Start-up: define responsibilities

Second stage: define competencies

We like to say that running a start up is like playing beach volleyball – success comes from reacting quickly and going wherever the play is. By the “end” of the start-up period, there is some consistency developing, and so the business starts to define responsibilities. As a business enters the second stage of business growth, each role gets more defined, and as a result each position has its own set of needs. At that point, the business needs to define the competencies needed for each position to be effective.


Start-up: feedback focused on assessment

Second stage: feedback focused on development

Just about every start up company I know struggles with simply doing performance reviews – the evolution they are working on is providing assessment feedback. The assessment framework is usually established by the time the company is a “young second stage,” and after that, the evolution that the business needs to make is the context of that assessment – the employee’s development plan. Second stage companies need to shift their approach to HR to get the most out of their people – and give the most to their people.

For more information on talent management and development, check out our Talent Pillar page.

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