Talent related organizational challenges in a start-up6 min read . Updated: 04 Feb 2020, 04:18 PM IST
What are some of the common talent related or talent linked challenges that start-ups struggle with
For past several years, start-up organizations have occupied a unique space in our collective psyche. We hear all sorts of stories, at times full of heroism and valor where one or perhaps few individuals, full of passion, talent and commitment are able to create value for themselves and for many others in a time span of few years, and at times there are alarming stories of founder’s greed, lack of direction, social apathy etc. Between the poles of greatness and hollowness, the truth straddles somewhere in-between. Like any other organization, start-ups struggle with their own set of challenges and a large portion of these challenges falls under the talent bucket. So, what are some of the common talent related or talent linked challenges that start-ups struggle with? Here are a few based on my observation of the start-up ecosystem.
Attracting and retaining right talent: A lot of start-ups specially in their initial stages are powerful ideas narrated to some stakeholders like investors etc with a very ambitious and aspirational growth story. However, the translation of that story to the next set of employees that will join and stay with the start- up is many a times not thought through, as a result, it becomes really difficult to attract right set of talented work-force and all the more difficult to retain it later. The founder(s) need to understand one fact that an idea can be brought into fruition by a team of talented individuals with different motivations and capabilities and therefore the initial stage demands that the founder(s) need to learn and play the role of a great HR/Talent Acquisition Head. The abstract idea of the start-up and its power to generate value is best understood by the founder(s) and therefore they need to learn and demonstrate the art of communicating the “growth story" in various ways to appeal to different kinds of prospective employees. The caveat is, one should not promise the moon otherwise the attraction can very easily turn into disillusionment. One may not have very refined and polished hiring process, however one should have a clearly articulated and aligned sense of “what the organization is", “what it aims to be in a certain period of time" and “what do we expect from the employees who will be a part of the start-up team". In the beginning all the employees need to have a very strong entrepreneurial orientation towards work along with the technical/functional expertise. Hiring and retention based largely on attractive and creative salary packages is mostly a flawed long-term strategy. Leaders need to do a thorough work to figure out what clicks at certain levels and not blindly copy the existing models, e.g. at a certain level, do people really value stocks in your geography? One may still go with the idea of adding stocks in the package, however a thought through approach prepares the organization for the outcome at a later stage.
Alignment, the double- edged sword: The founding team and the initial cohort of employees need to be strongly aligned around the purpose and the direction of the organization, they need to be flexible in making and adapting to continuous changes as and when required. So, the talent needs to be comfortable with chaos, lack of structure and rapid pace. Ability to play broader roles and build strong chemistry at an individual level and resilient to take failures, missing the mark, in its stride. The teams who don’t have such characteristics may crumble within a very short time of formation. However, when a set of employees including the founders cross this stage and move to the next level of tempered chaos and next cycle of growth, the personal chemistry established earlier may become a roadblock as the close bond and direct access to founders can dilute worth of job roles and impede process orientation as well as may breed some clique related politics and power centers. Also, the earlier talent that stayed during the rough weather is rewarded with big titles and promotions which at times is not in sync with the capabilities required for the next phase and therefore creates huge people and performance issues. If not addressed at this stage, very soon it may spiral into old vs new employee polarity.
Appropriate structure aligned to the growth: As the organization grows, and in some cases grows at a humongous pace, hiring takes precedence over other areas. Suddenly organizations are in a situation where the structure appears like a lump of ginger growing disproportionately as a result there are some leaders who have 60 or even more people reporting directly to them. This is also the stage where people from different organizations and cultures will join in to be a part of the growth story. If not handled with urgency, this situation creates number of issues like some senior leaders whose role is to grow the business, get sucked up and exhausted in operational issues and the junior workforce which is expecting some order and structure that perhaps they are accustomed of, especially if they come from a relatively stable organizations (including start-ups at an evolved stage), find themselves lost.
Articulating the culture and ways of working: When the team is small, it is easier to understand and abide by the culture that the organization believes in. Mostly it is the reflection of founder(s) core values. However, as the organization grows and grows rapidly, it can become a melting pot of various ideologies and therefore becomes imperative to strike a balance between learning from others and maintaining as well as cascading “organization’s culture" or the ways of working that are unique to a particular system and are highly valued by all members of the organization. The idea of documenting, articulating and role modelling becomes critical otherwise very soon we realize that different parts of the organization have completely different “ways of working" guided by a set of managers who got hired from different places and there isn’t a common glue that binds the organization. This creates unnecessary confusion and lack of common identity as the organization scales up.
Creating required Policies and Processes: This appears like a paradox, growth requires freedom, creativity and courage, however as the organization becomes bigger, it also needs policies and processes to scale up. In a high growth environment, especially in the area of Talent, organization needs to think and create some policies and processes, the absence of which can impede growth. For e.g. an aspirational, talented and sought-after engineering workforce will look for some career architecture which helps them in making future career choices. Some may like to broaden their skills; some may like to test managerial roles and some may like to deepen the capability in an existing area/domain. Depending on the practicality of a given situation, organizations need to think in advance to create few of the policies and processes, else they struggle at a later stage and also draw flak on platforms like Glassdoor, which may impact the brand image.
Start-ups have the potential of creating immense value for different stakeholders, in the last several years there are many start-up success stories that have emerged in India, at the same time we also know the failure rates of start-ups is exorbitantly high, as per some studies, 90 percent of Indian startups fail within the first five years. The success of an organization depends on a lot of factors, Talent being one of them, in the case of a start-up one can confidently say that Talent is the most important factor that ensures success and sustainability.
Vivek Tiwari is a partner with Talentonic HR Solutions and has experience of nearly 20 years.