Tech Startups “En Pointe”
By: Nicole Korb & Alexandra Maringola
The Ivey Business Review is a student publication conceived, designed and managed by Honors Business Administration students at the Ivey Business School.
Tech startups live and operate in an inherently volatile environment, where technological changes can create havoc on human capital management. This reality necessitates the need for an effective human resources (HR) strategy. Successfully managing employees is critical since startups must stretch limited resources.
Startups from Waterloo to Silicon Valley are, however, failing to use HR strategically to attract and retain the talent necessary to facilitate quick growth. Many tech startups tend to employ shortsighted HR policies rather than well thought out HR strategies. Simply relying on fully stocked refrigerators, beer o’clock social events, and the exceptionally vague yet attractive “cool atmosphere” does nothing to curb the ever-increasing cost of retaining scarce talent.
Technology and Tutus
Much like start-up tech firms, the National Ballet of Canada (NBOC) must be innovative in order to succeed in an ever-changing environment. NBOC must be creative in order to attract audiences and it must have dancers with the ability to adjust their capabilities to create innovative products. An unlikely source for HR know-how, NBOC has succeeded in rising in international ballet comparisons. Its award-winning HR strategies have earned it the title of being one of Canada’s Top 100 Employers.
The Importance of Flexibility
Role adaptability is ingrained into the dancers at NBOC by virtue of conscious managerial tactics, which rotate dancers and build skills beyond what is immediately required. This involves cross training athletes to develop different kinds of musculature and styles of movement.
Tech start-up founders can mirror NBOC’s adaptability among its own employees by adopting similar cross training activities. Despite limited human capital during the early stages of the company’s lifecycle, protected work hours should be established to help in the development of additional skills. Employees should be placed in rotational teams so activities simultaneously cross-pollinate business developers with technical developers. This diversity in workplace activity can reduce role fatigue and incent extended employment tenure, muting the impact of “start-up mentality” – a rising trend whereby employees spend less than a year at a series of start-up firms. The cost of managing cross training exercises from the beginning will be negligible since fewer resources will be needed to acquire new talent down the road during critical business phases.
Look for Subtle Cues
While the corporate world is fond of memos and emails, NBOC has foregone formal communication when managing dancers in order to promote perceptive ability: the capacity to pick up on the nuances of what choreographers are asking. Such a skill is valued because dancers who are able to interpret verbal and non-verbal cues require less attention, freeing up the choreographers’ directing capacity.
While start-up managers and choreographers do not necessarily share the same communication styles, the effectiveness of their daily interactions with employees rely on mutual understanding of pre-established norms. Employees who are able to understand their managers’ informal sentiments are more able to confidently take on independently-guided responsibilities. Additionally, a manager’s ability to convey expectations can enhance their own confidence in employees, allowing them to take on projects with limited managerial attention. This would increase organizational capacity and enable manager-founders to focus on critical strategic tasks.
Fostering employee independence requires that startup managers explicitly facilitate formal reflection in early career stages, and encourage autonomous work on non-critical tasks to establish an understanding of managerial expectations. Tech startup managers should consult with their employees following task completion: they should identify which cues their reports instinctively acted on, and how close their interpretation of the task was to expectations. Critically, employees must be given direction about why and how their interpretation of the assigned task differs from their managers’. If utilized from the on-boarding stage, a continuous and deliberate feedback loop like the one described will empower employees and, in the process, align the objectives of manager-founders and subordinates.
Firms must learn to listen to more than one voice as well. Just as NBOC invites guest choreographers for a fresh perspective and new interpretations, startups must actively seek expertise from mentors and “Entrepreneurs in Residence” at incubators and other organizations. The ability to listen to and understand several voices helps offices transition to a growing number of employees, as well as assists firm expansion to new markets.
Passion Overtakes Risk
Key to both technology startups’ and ballet companies’ success is utilizing its employees’ natural risk aptitude for firm growth and innovation. NBOC’s HR strategies have proven extraordinarily effective in accomplishing this. Dancers face many risks including limited opportunity for promotion and career-halting injuries. Passion is the driving force behind a dancer’s risk aptitude; therefore, it is imperative that ballet companies keep its employees engaged. NBOC does this by offering dancers the opportunity for challenge and growth by casting them in a variety of performances. Passion is also the motivator for start-up employees who risk professional set-back and forgo large salaries and prestige from a more established company. Stagnation is unfamiliar to the talent that both startups and ballets recruit and thus consistent challenge increases engagement levels, improving employee retention and work quality. Moreover, this HR strategy supports NBOC’s overall firm strategy as the more avant-garde, and innovative works allow the Ballet to attract different audiences – thereby expanding its market.
Stretching Talent
Another prong to this strategy is casting dancers in roles beyond their current capabilities. The idea is that learning and performance happen concurrently, not consecutively. The NBOC’s amalgamation of the learning process with rehearsals combines development and productivity, saving time compared to companies that allocate separate periods to each.
By exposing employees to groundbreaking projects, and roles beyond their comfort zones within these projects, startups can similarly utilize their workforce’s risk and challenge driven nature. Managers should also reward this trial and error behavior.
Retaining Top Talent is Not a Grand Act
Tutus and technology bear little resemblance, but HR techniques employed by the Ballet provide startup founders unique insight to build competitive advantages in an industry that has seemingly overlooked HR. A flexible workforce with strong listening skills can increase already-limited organizational capacity. Moreover, cross training helps employees navigate the inevitable ups and downs of startup life, while matching the demanding pace of innovation that is necessary to compete. Ballet Master Peter Ottman notes that “innovation is the lifeblood of everything: arts, technology, and architecture – and it’s the constant flux that keeps people going.” His company, NBOC, demonstrates startups can use HR to not only inspire such innovation, but also embrace it.
