Why we built a people operating system
Software companies are made of people. And we figured out that what works when we were CEO’s of a 50 person software company, did not work once we scaled the business into the hundreds of people. That’s when we really invested in formalizing the way people set goals, were evaluated, and grew in their careers. That meant a single goal-cascade across the company, standard titles, a defined career path for every role, and a single system of record for performance. Done well, this work gave us faster decisions, better retention, and a leadership team spending its time on people rather than paperwork.
The principle behind the work was that ad-hoc people management breaks at scale. When every manager ran their own review template in a Word document, when titles drifted from team to team, and when individual goals were not connected to anything larger, the company spent more time debating compensation, leveling, and promotions than running the business.
We adopted the Rockefeller Habits as the framework for how goals flowed through the company. The three pillars are priorities, data, and rhythm: a small set of annual and quarterly priorities at the company level, the metrics by which we tracked progress, and a meeting cadence that kept the leadership team aligned. Underneath that, we built a standard set of titles and a defined career path for every role, so that any employee could see what was required to reach the next level. The system that held it together was PerformYard.
In practice, the cycle ran the same way every quarter. Company priorities cascaded through team priorities to individual goals, which were entered into PerformYard at the start of the cycle. Reviews ran on a standard cadence, with 1:1 check-ins between formal cycles. Bonus calculations were tied to goal achievement against those entries, and career progression was tied to the same competency framework, so advancement was consistent across the company. Managers stopped maintaining their own Word documents and spreadsheets, and the review experience stopped varying from team to team.
Leaders spent less time on administration and more time developing people. Promotion and compensation decisions were faster and easier to defend. New hires saw the path in front of them from day one. The leadership team had visibility into how the organization was tracking against its goals, and our decisions were grounded in data we could point to.