The startup gets off to a great start, with consumers becoming quickly enamored of its app. Soon, venture-capital money comes into play and there’s talk of an IPO someday. Only the company hasn’t developed the talent or culture it needs. Will it derail?
How companies, particularly in tech, evolve their talent strategies to keep up with fast growth has become an ever-hot and ever-important topic. As part of this year’s London Tech Week, which brings together more than 40,000 digital, financial, media, and strategy experts from around the world, Berengere Peter, Korn Ferry Hay Group’s Market Leader for Technology, spoke on a panel with executives from Uber, Trainline, Cocoon Networks, and elsewhere about the challenges of scaling up workforces. Below, some insights and highlights from the discussion.
The global economy is growing, but there is a malaise that exists among workers. People are worried about their future employment prospects. As technology disrupts more and more industries, should they be worried or excited?
The world is seeing growing inequality, discontent, and anxiety about the future. Businesses need to be engaging in, and owning, an active debate on humans’ role in the future of work. Employment is critical for a human-centric society and a central part of human development. In the London tech ecosystem, there are more skills needed than can be filled, and projections from London Tech Week indicate that the gap is widening.
Are organizations growing differently today than they did in the past? Is it a linear process common to digital and legacy organizations?
Business growth has never been linear. Rather like with human beings, it’s a series of transitions, often with regression just before a major growth spurt, akin to a child becoming a teenager. Leadership transitions are also well known. We know that what has made you successful at a certain phase of your career can hold you back in the next phase. This phenomenon is similar for organizational growth and common across digital and traditional organizations, however digital companies by their nature are able to grow extremely fast, accentuating growing pains. Growth in these businesses does not always mean large increases in the workforce; however, the growth is always enabled by that workforce.
Leaders have to mature individually and, at the same time, collectively lift the organization to a platform for growth. Listening to their people and monitoring their engagement through the right feedback mechanism then acting on it is critical. Leaders at the top need to collectively own the personnel and organization agenda; in particular, they must proactively grasp the development of their organization’s culture, keeping their operating model aligned with the relationships the business is looking to drive with customers, and anticipating the capabilities (skills and cultural traits) that they will need. All these questions involve difficult trade-offs. For example, if you are looking to build a highly customer-centric company, it is likely that there will be a tradeoff with short-term profitability. If these tradeoffs are not explicitly agreed to and owned, the organization will grow on an unstable base.
What changes are we seeing in how established companies and startups are competing for top talent? How are they differentiating themselves beyond stock options and Ping-Pong tables?
It’s critical for any business to have a brand in the talent market that is authentic and aligned to its strengths as a company.
Mature companies tend to be more advanced in this area. Amazon and Google look to attract talent through their reputation around innovation; Apple through its emphasis on building a career for employees; Microsoft talks about “empower your future”; Facebook is big on culture. Purpose can be a stronger attractor than stock options or other financial factors. But in any case, a well-defined and authentic employer brand is critical.
Why are some companies able to maintain their cultures during periods of rapid expansion while others are not?
Some companies are loyal to their values and their leaders collectively learn to make their culture evolve. They manage the inherent paradox of growth: how to put some structure in the business and stay entrepreneurial. They don’t confuse entrepreneurship with chaos.
This is the point when leaders need to give themselves the time to think about how to be proactive rather than reactive about the critical next phase of their organizations’ development.