In 2003, Benjamin Black, an engineering manager at Amazon, proposed that Amazon should branch out into selling online storage and computing power. The leadership team evaluated the idea and decided to incubate the effort in the form of Amazon Web Services (AWS). In 2021, AWS delivered $62 billion in annual revenue and contributed to 74%+ of the Company’s overall operating profits.
In recent years, the talent marketplace has undergone a seismic shift. The traditional approach to recruiting talent was straightforward and transactional — you do X and you are entitled to Y compensation. Amidst a rapidly evolving business climate, companies today have a more nebulous set of expectations from operators and leaders alike - these range from creative problem-solving and ingenuity to challenging assumptions and re-building the core strategy.
Adapting to this new environment, firms need to embrace a new playbook to recruit, manage and cultivate talent and form different types of talent partnerships. It is these sort of partnerships that will bring out the sort of critical thinking and proactive initiative that led to Benjamin pushing the case for AWS in 2003.
Defining the “Talent Orientation”:
By building the right type of talent partnerships, the best companies are able to create a high talent orientation, which then enables them to attract, retain and cultivate the best talent. It is often in these high talent orientation companies that talented teammates are able to realize their potential. Setting the right talent orientation requires excellence across multiple domains:
- Talent Density — The most talented individuals will gravitate toward organizations with the highest talent density. Intelligent and highly motivated operators typically place a higher value on the quality of people around them than they do on compensation and/or role details. This is also why the best educational institutions are able to attract the best talent.
- Culture — Does the culture breed innovation, risk-taking and learning, or does the leadership reprimand individuals for making mistakes? Does the culture inspire a sense of curiosity and initiative, or are individuals motivated mostly by reporting upward? Is the culture set up in a way that promotes teamwork and collaboration, or are teams competing internally? Are managers and leaders easily accessible and approachable, or are there significant barriers? Are operators and managers active contributors and evangelizers of a strong culture that is predicated on trust, empathy and ownership? In a recent post, Ghayas Baig has identified specific aspects of what he loved about culture. In a related post, Kashif Dastgir highlighted similar points about culture.
- Intellectual Rigor — Is the overall environment set up to encourage intellectual curiosity and debate, constantly pushing the thinking in healthy and creative ways? Many organizations are set up to be execution engines without necessarily prompting teammates to think creatively and to challenge the status quo.
The talent orientation is often what turns a given organization into a talent hotbed. The reverse is also true. Some organizations end up building a talent orientation that disables them from attracting high talent. The foundations for high talent orientation are often set at the earliest stages of starting a company.
(I) Building Talent Density:
For late-stage investments, it is somewhat surprising that most investors do not try to gauge talent density across organizations. As companies scale, the quality and velocity of progress depends largely on the calibre of the overall team (and not just the founders). I wonder if there can be effective ways to establish a “proxy” for the talent density that resides in a given organization.
As a founder, I found immense value in:
- Maintaining an intentional focus on learning to recruit better — Overtime, managers need to learn to evaluate and size people in a relatively short period of time. As is the case with most skill sets, learning how to recruit is an ongoing journey that requires a different approach at every stage of the business.
- Enabling talent to self-multiply — In prior roles, panel interview sessions were one of my favorite learning forums. It was often through listening to the observations of others on the panel that I learned how to identify talent early. With the right recruitment process, our existing talent density was strengthened with incumbent teammates insisting on the highest standards on recruitment.
I view talent density as a scale measure and not a checkbox. The most defining moments of building talent density are often in the early years of a company’s emergence, at a time when recruitment needs are limited and bandwidth is relatively high.
(II) Developing Culture:
Setting the right culture ultimately comes down to rewarding the right behaviors. The best leadership teams are intentional in first defining the right behaviors and then building systematic mechanisms for reward and reinforcement.
A great starting point is articulating and scaling the company’s value system — while most companies have a well-defined value system, very few are actually able to scale that across the organization. Most companies excel at defining the right value system, but struggle with building the right systematic mechanisms for reward and reinforcement.
One effective approach to building the right systematic mechanisms is to identify “culture carriers” and then evaluate them for people management roles. The management team plays a crucial role in scaling culture. The selection, training and evaluation processes for people managers often drives the ability of companies to scale culture.
In a related post, Jack Altman has written extensively on the benefits of building promotion cultures.
(III) Cultivating Critical Thinking and Intellectual Rigor:
Similar to other aspects of company-building, critical thinking and intellectual rigor must start with the leadership team. Most businesses operate on a set of assumptions, which need to be fine-tuned and reinvented with time. The best teams are able to build an internal culture of challenging assumptions and seeking/rewarding breakthrough thinking.
As organizations scale, the leadership team needs to take on a visible and intentional approach toward inculcating curiosity across teams. The Weekly/Monthly All Hands is a terrific forum for the leadership team to share their curiosity around parts of the business that are the least understood. If the leadership is outspoken about their limitations in awareness, then that tends to trickle down throughout the organization. The leadership team, therefore, needs to “model” the right sense of curiosity and intellectual rigor within the organization. In a related post, I've shared a number of useful mechanisms to inculcate curiosity across a scaling organization.
I’ve also found that the level of structure and specialization within an organization often drives critical thinking, pushing teammates to go deeper into select areas (versus having their bandwidth being spread a mile wide and an inch deep).
Thanks to Aatif Awan and Kashif Dastgir for reviewing and commenting on drafts of this post.
Posted: September, 2022