“Could we make money, ever?”
In 2008, Sheryl Sandberg joined Facebook as chief operating officer, having first met CEO Mark Zuckerberg at a party.
Sandberg was very different to the team that had been behind Facebook since its foundation in university halls in 2004. She had previously worked in the US Treasury under Bill Clinton’s administration, before later heading up the marketing team at Google.
Sandberg’s immediate focus was making the company profitable. She told the New Yorker that at the time everyone in the company was focused on “building a really cool site” – while she wondered if the company would ever be able to make money.
Within months, she had managed to convince Mark Zuckerberg to focus on advertising as a revenue-generator, with the understanding that it would not impinge on user experience.
By 2010, Facebook was profitable – and in 2012 was valued at its IPO at $104 billion.
Longevity – or collapse?
As a founder or CEO of a scale-up, it’s very easy to stick to what you know: surround yourself with people like you and hire a team who speak the same language as the first few employees. But Mark Zuckerberg was able to force himself away from this, recognising that Sheryl Sandberg was exactly what was needed to develop the business.
Sandberg pushed the company to evolve, moving beyond its very technical focus to more operational matters, including sales and marketing, business development and communications.
Otherwise, Facebook could have been a flash in the pan, like many other social platforms at the time – remember Friends Reunited and Bebo.
By contrast, you can look to the now infamous UK start-up, Powa Technologies, for a cautionary tale of how the wrong people policy can set your company down the road to collapse.
Powa raised more than $2 million in funding for its shopping technology. However, a significant of that money was spent on the sales team – and a very short-sighted bonus scheme.
Salespeople were rewarded with £2,000 every time they persuaded a target customer to sign a “letter of intent” – rather than receiving bonuses when they actually finalised deals.
Instead, those letters were completely non-binding, the sales pipeline ran dry and, eventually, Powa Technologies went into administration.
Creating the right people strategy
The contrasting fortunes of Facebook and Powa Technologies underline why getting your people strategy right is key to securing your long-term success. But how do you work out who to hire?
1. Be clear about where you’re going
It sounds simple, but your people strategy must reflect your business strategy – after all, it’s the team that will make it happen. So first of all, tech business leaders must ensure they’re clear about where the organisation is going.
What differentiates your offering? Is it an evolutionary new approach – or a refinement of an existing idea? Is the goal to disrupt a whole industry or own a particular niche?
The objectives of the founder and any investors are also critical here. Are they aiming to grow the company fast and make money through an IPO, or are they happy to pursue slow and steady growth? How will that impact the business strategy? Make sure that your strategy is realistic and authentic to who you are as a company and the potential of your technology.
2. Define the competencies that you need
Once you understand your plan, you can work out the people you need to deliver it and when. Is developing your offering quickly the most important; in which case, do you need more technical talent? Do you need to raise awareness through a strong communications strategy? Or is setting up a strong local sales pipeline critical? Should these positions be company directors or more junior staff?
Importantly, when should you time each hire – and how much money will you need to assign for each post? Will you use a bonus scheme and, if so, how will you ensure that it encourages the behaviour that you need? If you’re lacking key competencies in the team, can you pursue upskilling with the staff that you have?
Remember the importance of the HR function too, to retain and develop the talent that you have. Sketch out a strategy for the next three years, and a detailed plan for the 12 months ahead, then refine it as you go.
3. Prioritise diversity
Diversity is critical to business success, as numerous studies show. And that’s not only attributes like race, gender and sexuality, although they are incredibly important.
Different backgrounds and experiences are vital, to maintaining the innovative and creative thinking that will enable a growing business to thrive, especially in the fast-moving technology sector.
It’s human nature to hire like for like – which can mean that you end up with a team of similar people. But think of Mark Zuckerberg and Sheryl Sandberg: the skills that you need the most might not be immediately obvious.
Creating a strong, diverse team, capable of new ways of thinking, will be critical on the road to success.
4. Hire for attitude and train for aptitude
On the whole, you can teach skills – but you can’t teach enthusiasm. Select people based on their outlook, and not just on their current capabilities.
While admittedly this approach isn’t always feasible when you need, say, an expert developer or CTO, generally this approach will help to build a culture of loyalty, a team that will go the extra mile for the business and staff that buy into the culture of the company.
All of these attributes are important as the business grows.
5. And finally . . . don’t be afraid to hire people cleverer than you
Great leadership means more than being the best at everything in your company.
Instead, you should put the success of the business before your ego, recognise and acknowledge the gaps in your skillset – and hire the people that will complement you.
Creating a well-rounded team, and getting the best out of them, is the mark of a truly exceptional leader and will set your business up for long term growth.