Talent Planning: The secret sauce for startup success
When you talk about startups, the first images that come to mind are the founder as a lone hero, technology, impact and a few others. What often gets missed in popular discourse is the building of an enterprise, an organization. As an extension, people strategy and talent planning are left out of the priority list as well. On the other hand, speak to any successful founder and they would speak at length about the importance of people strategy. Many accomplished Indian founders such as Ankur Warikoo (Nearbuy) and Kunal Shah (CRED) emphatically press upon the need for founders to pay attention to building teams.
Talent Planning is the foundation of a good People Strategy; and yet, it is something that is not acknowledged very often. While a good people strategy is a critical contributor towards an organization’s success, a well-designed talent planning process brings in clarity of thoughts while supporting critical management decisions. Talent planning is not just about answering how many people you need to hire. It involves evaluating and having the right understanding of the current and future talent needs of the organization in terms of number, role, skills, knowledge and format of engagement with the onboarded talent.
The number of startups that are redefining and reshaping the way organizations operate, are clear indicators of the way the Indian startup landscape has evolved over the last decade. We find most early stage startups, particularly, have a single-minded focus on financial sustenance and growth. We agree that this must be so. If the startup cannot survive, all other questions are moot. But, the thing that most of the founders fail to notice is how fundamental is talent to a startup and, consequently, a large part of a startup’s goals can be achieved with a thorough talent planning process.
The pandemic underscores Talent Planning
COVID-19 drastically changed the world around us. Many small and large startups struggled with a variety of challenges, including staring in the face of business closure. While many startups managed to sustain and sail through the crisis, many did not. Despite having the best intentions to support the team through times like these, layoffs, salary cuts, reduced budgets, were commonly heard about all through the year.
The pandemic has made the talent strategy more critical than ever before and has made many startups and founders consider a complete overhaul of their people strategy. It is quite expected and natural for the pandemic to create a paranoia for many founders in the way they look ahead with respect to their talent strategies. While it is good to have a conservative outlook in these tough times, we believe that it is important to pepper the paranoia with short and medium term business goals.
Relooking at the organization design and the talent required to support its goals and vision is the need of the hour, especially now as startups are beginning to emerge from the pandemic. A thorough and well-executed talent planning would significantly contribute to medium and long term growth of a startup. We lay down a few basic principles and thinking schemas for startups to consider in their talent planning endeavours.
The future and the present are equally important
‘Begin with the end in mind’ is a phrase many of us have been taught or heard or perhaps even followed in our professional and personal lives. Anyone who has been through a management school would have developed abilities to craft present action in accordance with the predefined goals. The larger discourse of business planning and strategy is anchored in this approach - define goals and then design methods to achieve them. This ‘causal’ approach is best suited when the future is predictable to a large extent. For a startup, the future is anything but predictable. Several leading scholars urge entrepreneurs to be ‘effectual’ in their thinking. Instead of worrying about predicting and thus controlling the future, founders are better suited to creating their future starting with taking a close account of their current situation and available resources.
When planning their talent requirements, startups must consider their current resources, which could be funds available, current team size and capabilities, networks etc. Expectedly, taking a close stock of the funds available would help founders better ascertain the cost implications of hiring new talent. More importantly, taking stock of current talent and funds available, may also induce innovative thinking where current talent and funds could be re-aligned or repurposed. Taking stock may help founders identify redundancies and inefficiencies, if any, thereby unlocking more (financial and/or talent) resources.
When planning the talent needs for a startup, it is imperative to thinking comprehensively about the future and goals. While each founder would have ‘a’ critical goal that she may be pursuing (eg: fund raising, revenue, scale up), as a leader of an enterprise, founders need to consider ‘all’ the goals that the startup would pursue during the designated time period. When founders identify all the goals, including fund-raising, business/revenue goals, product development, process including customer service and organizational development goals, they would be better able to ascertain their talent requirements. The physical act of penning down may also help founders get a realistic picture of their goals. Last time we checked, being realistic is a good thing for founders.
Consider ALL your resources
When we think of resources, we tend to limit ourselves to financial or at most, physical resources (such as office premises). There is ample evidence to suggest that founders, at both early and advanced stages, draw significant value from their networks. At early stages, founders often raise angel funding from their personal networks, the first employees are often hired on references, the first customers (both, retail and enterprises) are often sought through networks.
When undertaking talent planning, founders must consider their first order networks (people and organizations that they are connected with). It is also immensely beneficial to estimate the second order networks (i.e. extended networks of the founders’ first order connections). This is so mainly because most new information or resources is often known to flow from new or extended connections. In the context of talent planning, identifying the first order and second order networks would help is seeking relevant talent.
Founders must break down each goal into the roles and skills required in people for the startup to meet the respective goal. Roles can be ascertained by following the thinking triad of ‘think-design-do’. Simply put, for each goal founders can attempt answering the question whether and to what extent the respective goal needs a person to ‘think’ i.e. strategise, ‘design’, i.e. plan what and how tasks need to be done to meet the goal, and ‘do’ or perform the tasks. For instance, when planning for sales or revenue goals, founders should consider hiring sales heads to craft a strategy (geographic expansion/cross selling/up-selling, enterprise or consumer sales etc.) to achieve the revenue numbers outlined as the goal, sales managers to design how the strategy would be achieved (identifying specific target customers, developing customer relationships, laying processes for customer onboarding and engagement etc.) and sales personnel to pursue customers and complete the sales process.
Considering the strained resources of startups, it is likely that the same person fulfills two or more roles. Most founders, especially in their early stages fulfill each of these roles simultaneously. It is not important to have distinct people for thinking, designing and doing. But it is imperative to recognise that these are distinct and layered components of the talent needed to meet a goal.
When it comes to skills, founders can consider the triad of ‘task-history-behavior’ to comprehensively enlist the skills required to meet the respective goal. The ‘task’ signifies the subject matter or physical skills required for a task (such as knowledge of a coding language). ‘History’ stands for the past experience that would be necessary for the respective role (should the product manager have a prior experience in building the same kind of product or a completely different one or none at all?). The ‘behavior’ component is critical - this concerns the culture that a founder is trying to build in the startup (for instance, is a founder aiming to emphasise aggressive sales or deep customer relationships or some heady mix of both in the team). As one would notice, we use the term ‘skills’ loosely to encapsulate all aspects of talent. It is important for founders to break down the goals into roles into skills to be able to ascertain the talent requirements.
Finally, more clarity on roles and skills required would also enable founders to comment on the numbers, i.e. people required to meet the goals. We find this can be done in several ways, the most popular among which is the calculation of person-hours required for the specified tasks.
Beyond full time employees
Talent does not mean full time employees only. Broadly, talent could take the form of full time employees, part time employees, project/time bound consultants, project/time bound interns. With the goals broken down into specific deliverables and the skills required for them, founders need to decide whether each deliverable is repeatable and whether there is decision making involved in the respective role. The thinking triad to use here could be ‘build-buy-borrow’. The ‘build’ component signifies whether a current employee(s) could be trained to take on a certain role-skill combination. ‘Buy’ implies hiring new talent. Here it is important to consider whether the talent is required as a full time employee or part time employee. Typically, when a startup needs expertise which may be related to a specific, time bound project, it is advisable to ‘borrow’ talent or hire consultants or advisors.
Arriving at your destination!
Now that founders have arrived at their talent requirements in line with the parameters mentioned above, it is absolutely critical that they evaluate their existing available resources against the talent needs identified. It is imperative for founders to acknowledge the talent bank already available within the organization with respect to readiness and potential to grow while evaluating the financial capabilities of the startup to expand further for resources that need to be onboarded externally.
A good leader always has a sense of the realities on ground and a vision to identify the possibilities of leveraging and utilising the existing resources further. The final outcome of a talent planning process is therefore not necessarily just a number of people that need to be hired externally, it is also the realignment of the current available resources. Startups are characterised by the supposedly conflicting realities of constrained resources and aspirations of steep growth. Talent planning done well, enables a founder to carve out a middle path that is marked with success and often, wisdom.