In many rapidly growing organizations the primary focus of Human Resources is to frantically recruit talent as fast as possible just to keep pace with the exponentially growing workload. However, in discussions with leadership members of many startup and high growth organizations we began to hear about additional people practice needs along with concerns about how to approach these needs within their resource strapped organizations, with non-traditional cultures and innovative business models. Now, with preliminary data collected from 27 CEOs and CHROs in such organizations, E. Rogers Associates can share some insights to help startup and high growth tech leaders expertly steer their people agendas.
People Practices Are Under Utilized Growth Drivers: 5 of the 8 people practices we investigated were rated as strategic drivers of business growth for at least one third of participating companies. However, even when companies rated a practice as a growth driver they were still only about 50% likely to be investing in it at least moderately. We also found that boards, investors, and leadership teams are mostly open to implementing new people practices, which suggests increasing efforts in specific practices can drive much needed additional growth.
A General Focus On Strengthening Culture Supports Startup Growth: Culture was the one exception to our first insight. We found this people practice was rated highest both in its ability to drive business growth and in current levels of investment. While not an earth shattering insight – unique culture and shared purpose is frequently discussed as a key attractor of talent and success factor for startups – our results corroborate the continuing strategic importance of this practice even as organizations expand beyond their initial close knit teams.
The Most Likely Untapped Opportunities Are Building Effective Teams & Improving Leadership Capabilities: While these two people practices were rated nearly as high as culture in terms of their ability to drive strategic growth they are also receiving less investment than other practices not as strongly tied to growth (such as designing Onboarding and Compensation & Benefits programs). Interestingly these two opportunities mirror those of larger more established organizations. Deloitte’s Human Capital Trends’ Research cited Organizational Design – The Rise of Teams and Leadership as the two most important trends of 2016. Therefore, these smaller more agile businesses stand to benefit from implementing some of the principles stemming from the OD and Consulting practices taking place in larger multinationals.
Perceived Effort, Lack of Funding and Frequent Organizational Change Are Preventing People Practice Implementation: These three factors were rated as barriers in at least half of all companies surveyed, and therefore provide clues for effective implementation strategies.
The Keys To Unlocking People Practice Potential in Startup and High Growth Organizations:
- Create a Strong Link Between the Initiative and Business Results: Large organizations with thousands of employees have economies of scale. They can afford to invest in their people on the loose assumption that general performance will improve and show up in some way in the bottom line. In smaller more resource strapped businesses new initiatives will need to show that they solve a problem that clearly is costing the organization, or that they are key enablers of future growth.
- Start Small, Collect Feedback and Evaluate: Startups and High Growth companies more so than any organizations, should be open to experimentation – use this to your advantage and test your plans before spending too much effort. For instance, you could invite a few people managers to watch a TED talk on a relevant leadership topic and discuss what they learned, or have a discussion about team effectiveness principles with one manager and gauge their interest. Get feedback on the impact you’ve had and suggestions on how the company can improve in these areas.
- Connect the Initiative to Company Culture: As culture appears universally understood as a driver of success in this sector, building culture into your business case (e.g. “a culture of leadership” or “a culture of development”) and discussing the extended behavioral impact may strengthen your case.
- Keep It High Level: Because of time constraints and organizational changes on the horizon you’re not likely to get a return on highly detailed design efforts. Stakeholders may raise complicated “one-off” issues or you may be tempted to perfect your plans but you’re probably best served by keeping the 80/20 rule in mind. Focus on high impact actions and agree on one person to oversee the project and be responsible for approving any exceptions.
- Look Outside Your Organization: Peers in other startups may have a solution that’s already proven effective in their organizations or they can serve as valuable partners in investigating common challenges together. Similarly, consultants and talent management professionals have a wealth of experience, research, tools and solutions at their disposal and are generally open to starting a discussion. If you’re interested in working with an external consultant further you may be able to share the expense with another startup. A wrong move early in the process can stop a people initiative in its tracks, therefore leveraging existing knowledge and expertise upfront can be extremely valuable.
If you’d like to network with other startup and high growth professionals interested in people practices or discuss potential solutions with the authors contact us at firstname.lastname@example.org.
If you’d like to know more about the study, all survey participants will receive a full summary of our results; simply Click Here to complete a 10 minute survey and to have the report emailed to you.