• Ross Pettit on The Agile Manager – How tech firms went for prioritizing cash flow instead of talent (and artists)

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    For years, tech firms were fighting a war for talent. Now they are waging war on talent.

    This shift has led to a weakening of the social contract between employees and employers, with culture and employee values being sidelined in favor of financial discipline and free cash flow.

    The operating environment has changed from a high tolerance for failure (where cheap capital and willing spenders accepted slipped dates and feature lag) to a very low – if not zero – tolerance for failure (fiscal discipline is in vogue again).

    While preventing and containing mistakes staves off shocks to the income statement, it doesn’t fundamentally reduce costs. Years of payroll bloat – aggressive hiring, aggressive comp packages to attract and retain people – make labor the biggest cost in tech.

    Of course, companies can reduce their labor force through natural attrition. Other labor policy changes – return to office mandates, contraction of fringe benefits, reduction of job promotions, suspension of bonuses and comp freezes – encourage more people to exit voluntarily. It’s cheaper to let somebody self-select out than it is to lay them off.

    Employees recruited in more recent years from outside the ranks of tech were given the expectation that we’ll teach you what you need to know, we want you to join because we value what you bring to the table. That is no longer applicable. Runway for individual growth is very short in zero-tolerance-for-failure operating conditions. Job preservation, at least in the short term for this cohort, comes from completing corporate training and acquiring professional certifications. Training through community or experience is not in the cards.

    The ability to perform competently in multiple roles, the extra-curriculars, the self-directed enrichment, the ex-company leadership – all these things make no matter. The calculus is what you got paid versus how you performed on objective criteria relative to your cohort. Nothing more.

    Here is where the change in the social contract is perhaps the most blatant. In the “destination employer” years, the employee invested in the community and its values, and the employer rewarded the loyalty of its employees through things like runway for growth (stretch roles and sponsored work innovation) and tolerance for error (valuing demonstrable learning over perfection in execution). No longer.

    http://www.rosspettit.com/2024/08/for-years-tech-was-fighting-war-for.html

  • Want to build a start up company that lasts? Think three-layer cake

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    https://www.fastcompany.com/91131427/want-to-build-a-company-that-lasts-think-three-layer-cake

     

    Building a successful business requires a focus on three key elements: product excellence, go-to-market strategy, and operational excellence. Neglecting any of these areas can lead to failure, as evidenced by the high percentage of startups that don’t make it past the five-year mark. Founders and CEOs must ensure a solid product foundation while also integrating effective sales, marketing, and management strategies to achieve sustainable growth and scale.

     

     

    • Foundation: Product Excellence, Core Values and Mission
      • Core Values: These are the guiding principles that dictate behavior and action within the company. They form the ethical foundation and are crucial for maintaining consistency in decision-making.
      • Mission: This defines the company’s purpose and goals. A clear and compelling mission helps align the team and provides a sense of direction.
      • Efficiency and Scalability: This layer focuses on creating efficient processes that can scale as the company grows. Streamlined operations reduce costs and increase productivity.

     

    • Structure: Operational Excellence and Innovation
      • Operational Excellence: Efficient processes, quality control, and continuous improvement fall into this layer. Ensuring that the company operates smoothly and effectively is crucial for sustainability.
      • Innovation: Staying competitive requires innovation. This involves developing new products, services, or processes that add value and keep the company relevant in the market.
      • Quality Control and Continuous Improvement: Ensuring that operational processes are of high quality and constantly improving helps maintain product excellence and customer satisfaction.
      • Technology and Infrastructure: Investing in the right technology and infrastructure to support business operations is vital. This includes everything from manufacturing equipment to software systems that enhance operational efficiency.

     

    • Strategy: Go-to-Market Strategy, Vision and Long-Term Planning
      • Vision: A forward-looking vision inspires and motivates the team. It outlines where the company aims to be in the future and helps in setting long-term goals.
      • Strategic Planning: This involves setting long-term goals and determining the actions and resources needed to achieve them. It includes market analysis, competitive strategy, and growth planning.
      • Market Understanding: A deep understanding of the target market, including customer segments, competitors, and market trends, is essential. This knowledge helps in positioning the product effectively.
      • Marketing and Sales Execution: This involves creating a robust marketing plan that includes branding, messaging, and advertising strategies to attract and retain customers. Additionally, building a strong sales strategy ensures that the product reaches the right customers through the right channels.
      • Customer Acquisition and Retention: Effective strategies for acquiring new customers and retaining existing ones are critical. This includes loyalty programs, customer service excellence, and engagement initiatives.