What Talent Wants
In his seminal 1964 book Managing for Results, business management guru Peter Drucker remarked that the success of a business is increasingly dependent on a company’s ability to effectively utilize talented people. Over the years, he spoke of a structural change from manager-controlled businesses to more decentralized structures and a paradigm shift from treating people as a cost center to viewing them as a resource.
On Knowledge Workers:
Even if employed full-time by the organization, fewer and fewer people are “subordinates”–even in fairly low-level jobs. Increasingly, they are “knowledge workers”. And knowledge workers are not subordinates; they are “associates”.
– Drucker, Management Challenges of the 21st Century
On Managing People:
“You have to learn to manage in situations where you don’t have command authority, where you are neither controlled nor controlling. That is the fundamental change. Management textbooks still talk mainly about managing subordinates. But you no longer evaluate an executive in terms of how many people report to him or her. That standard doesn’t mean as much as the complexity of the job, the information it uses and generates, and the different kinds of relationships needed to do the work.”
This contrarian insight, cultivated in the age of the rise of grey flannel suit Corporate America, proved prescient, as today’s employees want (or simply have the leverage to demand) more than just a paycheck from their employers. To attempt to wrap up his decades of writing and thinking into one paragraph, his philosophy on hiring, organizing, and managing people is thus:
As the success of business ventures become more and more dependent on attracting and retaining talented people, competition for high quality “knowledge workers” increases. Companies who focus on measuring what actually matters and empowering team members through ownership, transparency, growth, and collaboration have a competitive advantage.
There are two types of ownership for a startup employee, the type that shows up on a cap table and the type that stems from having an opportunity to lead new projects, products, and processes within a company.
To compete in a competitive hiring market, fair compensation and an openness to talking about what that compensation looks like under different scenarios is table stakes. Everyone you offer equity compensation to should know how, for example, dilution or a down round will impact how much their options may be worth. Even if you are hiring people with some cap table savvy, sending them something like this or this can be helpful…again, this is table stakes.
Where smart companies gain a competitive advantage is by working to maximize the second type of ownership for every team member. This is done by embracing autonomy. The actions taken early in a company’s life have an outsize impact on what it will become in the future and the people you hire early will be the ones taking those actions. If you aren’t focusing on growing the value of what could be called operational ownership, you limit the long-term value of everyone’s equity ownership.
“Knowledge workers have to manage themselves. They have to have autonomy.”
How employees think about ownership:
- Is it clear how much of the company I own and what will happen to my ownership under different scenarios?
- Am I in a position where I am challenged to take ownership of new processes and initiatives, even if I am simply an individual contributor with no direct management responsibilities
- Do I have a stake in the company that goes beyond what shows up on the cap table?
In a recent guest post on the Visible blog, Wagepoint’s Leena Rao asked whether “radical transparency” is the way forward for startup marketing. While many companies have taken to the idea of internal transparency with regards to their operations and metrics, it remains a difficult balance to maintain. Sharing everything is great in theory but won’t it be distracting for people? And what happens if we have a bad stretch as a company?
In reality, there is not a once size fits all answer to how startups should tackle transparency. In spite of efforts to standardize how metrics in the private markets are tracked, dictating exactly what metrics and information each company should share (and with who) is a completely different beast.
The key takeaway for executives looking to make transparency a part of their business is to remain consistent with what is shared and how it is shared. This helps build trust through predictability.
How employees think about transparency:
- Are the executives of the company being open and honest about the prospects of the business as well as our current performance?
- Does the company have systems in place to communicate that performance and give every team and person insight into how their contribution is affecting the growth of the business?
Let’s face it, no matter how amazing the culture at your company is, people often take jobs because of what it will mean for them personally. That means everyone that joins your company is doing so because they feel it is the best thing for them to be doing right now so that they can continue on the career path they have visualized for themselves. The difficulty is keeping people engaged enough to continue feeling this way.
Working to understand what someone is looking for out of the position and over the long term before they come on board is one way to make sure you are setting a relationship up well for the long term. Training and development is another, often neglected, investment that companies can make…and it doesn’t have to involve expensive, comprehensive programs and teachers (read: consultants). If you are bringing intellectually curious people into your company (you shouldn’t be hiring people who aren’t), they will want to take control of their own professional growth and development, you just need to help provide the tools. This can be as simple as a $20/month Kindle allowance or Treehouse membership or a couple of days to attend a conference on their preferred programming language or design discipline.
How employees think about growth:
- Is the company growing the way that it should be and am I contributing to that growth?
- Is being at this company in this position helping me grow my career?
The desire among companies to remain lean along with the uncertainty of what may transpire each week within an emerging business has given rise to the full-stack operator. People with a diverse skill-set (and, again, intellectual curiosity) will quickly form opinions on how the company outside of their specific role is being run and will want to make a contribution.
Your first inclination may be to look at this as a meddlesome distraction full of meetings that start 10 minutes late and end with no actionable next steps. In fact, it can be just the opposite if executed properly. No matter how great tools like Slack or Trello are at keeping everyone in touch and on the same page, they haven’t (yet) replaced the impact a well thought out discussion can can have on the direction of your business. We saw this first hand when we had the opportunity to get everyone in the same room for an extended period of time during our offsite in Copenhagen last month.
These discussions make it easier to get to the bottom of what work is most important for everyone at your company to be focusing on each day. That is why, even when it becomes more and more difficult to bring everyone together physically, things like show-and-tells, scheduled team catchups, and 1:1’s can be so impactful for a business that moves quickly.
How employees think about collaboration:
- Do the different teams or functional groups in the company work well together?
- Am I getting the opportunity to work on different projects and learn from people with different skillsets than my own?