Last week I hosted a lunch at the Gherkin for fast growth businesses. We had some great guests from well-known high street names and an interesting and stimulating discussion about the challenges and differences facing these businesses. I thought you’d enjoy some of the highlights…
Although, no two businesses are the same, there are some definite patterns that emerge in fast growth environments which can play out in frustrating ways and potentially start to slow business growth down. If you work in a fast growth business, you may recognise some of these common scenarios: an extraordinarily busy and chaotic environment, managers getting on with the job and doing their own thing, a new senior team with conflicting views on how the business will grow to the more established employees, long term employees leaving the business, and a cycle of repetitive hiring.
What makes fast growth businesses different?
Imagine working in an environment where people management is a value creator not an overhead. Where every pound spent on hiring, developing and enhancing your employee offer is an investment and directly trackable on the market value of the business. The reason for this is that you are likely to be focused on a sale, exit or float at some point.
Here are some of my tips on how to bring some order to the chaos and create an impactful reward strategy that supports short term deliverables, long term business growth and delivers for the investors.
1. Scalable growth
Being able to demonstrate scalable, repeatable growth is the single thing that will add the most value to your business.
- Retain the culture that has helped make the business exciting and unique and be able to provide an effective, replicable talent acquisition strategy.
- Use organisational design to predict and map performance requirements as opposed to ‘hiring and hoping’.
- Gain clarity on what level people are in the organisation and whether you need more of the same, or someone more or less senior.
- Ensure your Heads of Department have the capability and competency to translate the new strategy into action for their teams.
2. Right talent at the right price
When investors look at how successful a business is, one of the main drivers is having the right people in the right place. Recruiting and hanging onto top talent, and allowing them to thrive and make a difference is key here. And crucially, how much you should be paying them and in what mix between fixed and variable, short and long term.
- Provide your managers/recruiters with the right data and support to make the right hiring decisions at the right price – you need good benchmarking data that is well interpreted. Often managers just pay the price for the person they interviewed and liked, or they go out to market on the salary the last incumbent left on.
- Define the culture and ensure that hiring managers are hiring talent with the same values and objectives.
- Establish performance management structures that are fair and as objective as possible and invest in training managers if they’re not comfortable handling effective performance discussions.
3. Strong business metrics
Working in a fast growth business is likely to mean that you have to be more commercial, strategic and business-like than you have been before. Employees need to understand what drives the value of the business; profit or revenue, organic growth or acquisition. A business that knows where it’s going and understands the key value drivers is worth more than one where employees don’t know what drives them.
- Work with the CEO, CFO and possibly the Board and shareholders to create clear messaging for employees.
- Back it up by paying bonus if you hit those numbers.
- Think about messaging for a long-term scheme, annual scheme or both.
4. No nasty surprises
One last point; where are the nasty surprises in your organisation? From a reward point of view, equal pay is the biggie. Gender pay disclosure is going to shine a very powerful spotlight into your current pay arrangements – can you justify them? If you have a big gap – which many organisations do – you will need to develop a narrative to explain it. The first thing to look at is whether your pay practices are genuinely fair. Use analytics to examine:
- Where the ad-hoc, out of cycle pay increases go – to men, women, or is it even?
- How many people were in the 10% club last year, receiving a pay rise of 10% or more, and again what is the gender split?
- How do your bonus payments look – do men or women get higher performance grades, or do male dominated departments tend to give higher overall ratings than female dominated ones?
It can be challenging to keep your gaze on the demanding work of constructing infrastructure which allows the business to grow when all around you, is chaos. But it offers opportunities which may be missing in a more stable environment. I caught up with a client recently who had moved from an established organisation to a fast growth financial services business. I asked him what was the biggest difference he had experienced in his new role. He said: “It’s the opportunity to make the difference to the bottom line, the commercial success of the business…I have the opportunity to create the kind of people environment, culture and ambition that I’ve only been able to dream about elsewhere.” If you work in a fast growth business, this is your opportunity too.
For more information, please click here to visit our events page where you can download the full slides from this event and find lots more useful information about rewarding in fast growth environments. If you would like to talk to me about the issues covered here, or more about pay and reward in general, please get in touch: 020 3457 0894
