In their last book “Blitzscaling”, Reid Hoffman and Chris Yeh explain what is the secret of the outstanding success of some of the top tech startups that became global giants in few years.
According to the authors, the main reason of their success is having prioritised speed over efficiency to generate incredible growth at a furious pace and conquer the market.
Nothing wrong with that. It worked. However, the business life cycle for any company doesn’t stop at the growth phase. Too many times we have seen tech companies fail to grow as well as to cope with maturity and I wondered why this happened.
My experience with tech executives and managers has allowed me to capture some key reasons why technology-driven companies are struggling to go to the next level and what are the root causes that are preventing them and their leaders to thrive:
Bad Planning and Lack of Accountability Process
Building a strategic, clear planning and accountability process that gets everyone on the same page is one of the most overlooked reasons to fail. I have seen plans with overlapping and unclear accountabilities that create chaos and confusion.
Not only that. The strategic planning process is often a result of too many ideas and priorities. Very few are aligned with the business vision and key goals. Some leaders set too many priorities, and can’t say “no” to good ideas, despite limited resources.
Once the strategic plan is written down, it ends up sitting on a shelf though. Just few of the initiatives are executed effectively. Fair to say this happens to many other companies across industries.
A sound strategy has a balanced structure of answering the key strategic questions, setting priorities and implementing the few great ideas.
Communicating with No Impact
In the majority of tech companies, building a tech product or solution is not a problem. The tech side of the business is clearly well managed.
The problem lies when tech leaders communicate together and with the external world. Are they able to translate technical issues and opportunities into language that inspires and excites their teams and customers? As we all know, employees rely on them to move forward towards results.
Sometimes, leaders have built a good company, found their niche and solved a customer problem, built a great product and a good strategy, but then they fail to share the vision internally, clarify roles and responsibilities, engage their team, roll out their strategy internationally.
Unfortunately, many tech professionals don’t have the proper skills they need to communicate with impact.
Find the Best Talents
The tech industry is moving fast. Too fast. Companies can’t cope with such speed when it comes to have the right talents on board to embrace new trends.
To build a competitive edge in such fast-changing market, organizations need to hire not just the most brilliant engineers, but also those who fully understand the specific technology needed for the business. And to find them isn’t easy.
Schools and Universities are doing now their part to supply talents to the tech industry, but it appears to be good but not enough. When companies are in the growing and scaling mode, they hire a lot. And fast. Big engineering teams are required in few days and they are expected to execute immediately as suggested by Hoffman in his book.
The reality is when leaders jump to hiring, they are often unprepared, they don’t know how to hire talents or where to go to find them. This results in hiring the first options available for a sake of speeding up and getting rid of the (painful) process.
High Performance Culture
Creating a high performance culture is finally getting the proper attention in the tech industry. A good high performance culture leads to achieve superior results, a trusting environment, retaining high achievers, and engaging employees to avoid burnout, frustration, relentless pressure and poor performance that lead to high turnover.
Most companies don’t go deep enough to reach the root cause of not-good-enough culture. They keep focusing on surface solutions, whether that means a new organization chart, annual reviews on paper or communicating more forcefully about the importance of achieving the current goals. That’s not enough.
Leaders must clearly define the way they want their culture to be in the organization, and create discipline across the organization that assures the highest levels of performance. And the only way to do it is to fully understand what is causing internal issues, misalignments, bad morale or engagement, toxic environment.
The sooner they do it, the better is the outcome.
Retain and Engage Employees
According to Gallup research (2013), only 13% of employees worldwide are engaged. Six years after, although we don’t have new data, I don’t really expect a major change.
Poor engagement is a big problem, in particular in terms of lost productivity and the cost of replacing employees. As expected, this is deeply frustrating business leaders who are struggling to find a solution without spending so much time dealing with the fallout.
Many employees are frustrated because they feel they are not heard. Not enough. They don’t know how they are doing and how they can do better. It seems there is no time for leaders to spend valuable hours with their employees, listen to them with the goal to serve them better, assess their performance periodically (and not only annually).
Money is never a motivation tool as well as providing free drinks and table tennis at the office. Employees want to be part of the journey, feel they are heard and cared. Not living in a blame culture.
Scale Up Internationally
Finally, it is time to scale internationally. No business will thrive only domestically, and it would be a mistake not leveraging the global markets, now much easier to capture than the past. This is a big opportunity however there are still many companies, in particular the most conservative ones, they see the international business as an export strategy, not as international strategy. There is a big difference in the approach and the outcomes.
I have seen two main reasons why the international scaleup doesn’t work.
First, rolling out international strategies in multiple countries at the same time. This is normally caused by setting too many and unrealistic priorities as well as driven by opportunities that might not fit with the current goals or availability of resources.
Second, when tech companies grow, they do it fast. They hire a sales team worldwide, but they struggle in managing and guiding them, getting them aligned to the vision and strategy, managing cultural differences, mastering the art of sales instead of spending all their time in costly, ineffective and copy-and-paste marketing strategies.
Are you familiar with any of these challenges? I guess we all are, but it doesn’t need to be this way. Solving most of these pressing issues could be much easier than what you think. It embraces solutions that are cost effective and have huge impact.
But this is for another time.
I hope that you found this article insightful as well as helpful for your business. If so, please feel free to share it with your network and colleagues. Meanwhile, don’t hesitate to connect with me to discuss further about the article and how these issues could be solved. #technology #leadership #management
I look forward to reading your comments!