Ask any CEO to name their number one priority and many will say “talent”. It stands to reason: hire the right people and the value proposition you’ve envisioned will come into being. But ask those same CEOs how they plan to acquire and retain those people and the answer will be less clear.
As a VC do we have an answer to this – the ‘how’ and ‘why’ of hiring as a structured discipline? Fortunately we’ve put a lot of time, thought and resource into making sure that we do, and here it is.
Hiring should be thought of as a discipline. It’s something that just happens. It’s commonly unrecognised that the act of finding, installing and making that hire work is a discipline, in the same way that marketing or finance is a discipline.
Vision, Strategy, People
VCs contribution to hiring normally centres around networks and executive coaching, but today these ‘value adds’ are table stakes. Our own in-house Talent Team is guided by a much bigger principle: one that aims to align a company’s people function with its vision and strategy. In other words, how the next person you hire will further your company’s reason for being in the world. For this reason, each of our portfolio companies will experience us differently, to the same degree that their visions (what they are trying to do in the world) and strategies (how they are going to get there) are uniquely different.
For example, if a company’s challenge is to scale marketing, we would first ask where the gap in the team is, but we also want to understand the team’s objectives in the context of the company’s vision and strategy. One way to do this is to ask precisely what that hire needs to accomplish in the next six or twelve months. Forcing that kind of practical detail reveals how that individual’s experience and core competencies will fit both the immediate and greater need. This way, every hire is always framed to further the company’s vision and strategy.
There’s also the mysterious art of finding or attracting the right people at the right time. The competition is fierce and the best people are probably happily settled in the best companies. They’ll be fulfilled, well compensated and won’t be spending their lunch breaks scanning LinkedIn or the job boards. So they need to be identified, contacted and then – crucially – persuaded to move. Compensation may play a part in this, but as importantly, the vision of the company will need to be communicated to them in such a way that they can get excited about it in principle, but also clearly see their part in its fruition.
This suggests that someone, often the CEO in the early days, needs to be out there, investing significant amounts of time making the above scenario happen, by evangelising the vision to the best people in the business, at many levels, across many functions – regularly, repeatedly, not just when a space needs filling.
Alongside this of course are the more intricate processes needed to make hiring more than just a recruitment function: compensation, on-boarding, design and planning, DEI, employee well-being, leadership and communication are all processes we help many of our portfolio companies with. But even here it’s important not to lose sight of the ultimate goal: executing on the strategy to realise the company’s vision.
Today, people strategy is becoming part of the business strategy. Customers want to know what’s going on the inside of the business they’re buying from. They’re not only interested in the product, but in the entity that it comes from. This places even more importance on the talent function as a refined and sophisticated discipline, seamlessly part of the business strategy.
Aligning vision, strategy and people is not easy, but the advantage of being a VC is that we have a diverse array of data points to draw upon from our portfolio of more than ninety companies to help founders understand how to recruit and retain people within their particular equation. So the really good news is that our fellow VCs can do this too!