According to Tech City, the UK Tech sector contributes an estimated £100bn to the economy. Innovation and increased venture capital funding have fostered high-growth across sectors from FinTech to FashionTech and MedTech. The rate of growth is creating a demand for talent that far outstrips supply. Technology is transforming the entire economy. Small businesses are using tech to disrupt business models, encouraging consumers to behave, shop, and communicate in new ways. Cloud-based services are challenging traditional businesses’ approach to IT. More established companies are having to respond by transforming their core business models and customer relationships. Erevena are headhunters working with high-growth and established companies. They build and advise leadership teams for businesses creating leading-edge technology. Its consultants discuss how technology-driven transformation has led to businesses needing a new combination of skills...
How do you build successful leadership teams for different stages of growth?
Dan: We work with both early stage and more mature public corporations. For early stage businesses, we start by focusing on the desired outcomes that entrepreneurs and their investors are looking for. A review of founders’ existing capabilities enables us to work out where their strengths are. Most importantly it helps us identify the skills and behaviours they are going to need as they scale the business. Every venture-backed business is different. You have to understand their unique challenges, as well as general demands that starting a new business bring, especially the relationship between the founders, their stakeholders, and what the expectations are. We are there to act as an advisor to our early stage clients, and they perversely need us the most at the time they can least afford our expertise.
Maria: Usually venture-backed businesses are tackling new problems. They are asking consumers to behave in different ways, and do different things – challenging the norm. It is comforting to hire “experienced people” who have been through certain experiences before. But as the sector grows, a natural talent shortage appears. To ensure a continual new flow of talent into the venture sector, we have to identify people with the passion for and capability to solve new challenges, even if their previous experience comes from tangential sectors or bigger businesses. Potential is as important as experience when tackling new challenges and business models. Smart people who can figure things out are an essential part of the recruiting mix.
Dan: Building a team around a Founder CEO is statistically more effective than replacing them as the company evolves. Bringing in someone to count the money and an operational person to run the company allows the CEO to remain their super self, without them having to do the things that they can’t. As companies scale the challenges change, and we start looking at people who can support the transition through adolescence into adulthood. For larger pre-IPO companies, cultural change and adding process to support scaling become essential. But that can’t be done at the expense of the entrepreneurial spirit that has fuelled the business this far. This mix is hard to achieve. Ensuring businesses continue to grow and commercialise at pace and don’t lose momentum is essential. It’s easy to become commoditised, and speed of execution often separates the winners from the losers.
Maria: Change is equally relevant to bigger corporates. We’re seeing business models that have been relevant for decades being turned on their head by disruptive challenger brands. Established companies have to think about digital transformation and their relationship with the entrepreneurial community. So many new challenges are springing up, requiring new skills and more importantly people with the ability to understand and tap into the venture sector, and lead transformation in companies of significant scale. Often that transformation is led by executives for whom digital is a mystifying, or at least non-native, subject matter. Our job is to help them understand what they need, what it looks like and also how to cope with the slightly uncomfortable feeling that radical transformation can bring. It’s a brave CEO who understands the need to disrupt their own business before they are disrupted by others
What are new evolving roles across Tech?
Sam: Jobs for life don’t exist anymore, especially if we think about the next generation of millennials coming in to leadership roles, so talent attraction is more important than ever and what people are attracted to is the way businesses operate. This is why traditional companies are changing and evolving, so that they can lure the very best talent. But culture needs to be communicated clearly through digital distribution – it is no longer about carvings in oak-panelled Boardrooms. Individuals can make very easy choices about what type of business they work in and therefore it is critical that leadership sets the right culture to attract talent.
Some universities have been very good at reflecting their customer base and being proactive in ensuring fair representation in their Governance structures. For example, one university includes the President of the Students Union in their governing body. This, not only bridges the multi-generational experience gap of the Board, it also serves to represent the students, the ultimate customers of the institution.
Michael: Corporate culture in the modern US environment is a significant factor around what is motivating and moving people. For them, the biggest challenge is retention. Across all industries there is a huge concern of people receiving very large buyouts, going to organisations and then only staying for a few years. Therefore when companies are focusing on their corporate culture they need to ensure that it is accurately reflected both externally and internally, and is consistent across the whole organisation. This way when they bring people in from the external market these individuals land and are embedded in to the culture that they have chosen and in which they can thrive. Individuals are no longer moving for financial gain, they want a ‘home’ where they can develop and realise their potential. Corporate culture needs to be fluid, evolving in line with market developments so that it remains attractive to top talent.
Jon: The requirement for Chief Product Officers in the start-up community has been much discussed and is starting to feed its way into the corporate universe as well. Product roles in corporates were historically focused on proposition development—pricing, tariffs, product concepts, etc. In the Tech sector it’s a role that bridges both customer and technology and has been a critical hire for high growth businesses where product is not just conceptually what’s sold, but also includes the technology the customer interacts with. In an online pure-play you don’t just buy a product – your whole buying experience, how you move through the funnel, how you check out, all of that stuff is part of the product journey. The CPO owns it all and works closely with engineering on what to build and prioritize to get the best commercial results. This is becoming increasingly relevant in bigger businesses and companies building digital capabilities.
How has the search process adapted in the Tech sector?
Sam: The world is moving much more quickly and that is putting new demands on headhunters. Historically, researching candidates took around eight weeks and the client wasn’t involved at this stage. Today we often have to draft the shortlist before we even pitch for an assignment. Clients expect you to have an understanding of who the potential candidates are and have a conversation about what they need to do get them. This means you can no longer be a generalist tech head-hunter—market knowledge is key. The job requires the ability to recognise patterns and understand a client’s needs even if they don’t. It’s not about learning on the client’s time, but instead coming with a point of view – this is what makes a search consultant different from just a recruiter who sources talent.
Jon: Ten years ago there were fairly basic online data sources when it came to tracking candidates. Today we have an array of social networks to use. But the thing to remember with these is that the content on them is self-generated, people are advertising themselves. Therefore we encourage all of our researchers to tread with caution when using them. Where we do get an advantage is our ability to see an individual’s degree of connectedness – who they know, rather than what they do. We then can get other’s recommendations that much faster.
Michael: Technology is an enormous enabler to help us all get a much more qualified view of individuals, but actually it doesn’t replace - and can never replace our judgement. There are a couple of reasons for this. Firstly a lot of technology recruiting is actually ‘white space recruiting’—often clients will ask for someone to fill a role that has never been done before, but want them to be experienced, and so they don’t actually know what they are looking for—the nature of the job is not tangible to them. A list of names doesn’t help them solve the problem independently. Secondly, just knowing who does a job doesn’t help you qualify their capability and attract their attention. It’s not who does something, but who is good at it that actually matters. Sometimes just having lots of information doesn’t make that information useful—it’s what you do with it that provides the value add. In our view social networks have changed our access to information, but not really changed our role and the value of search for key hires. As helpful as technology is, it’s not a replacement for thorough candidate assessment, client and candidate management, and navigating the nuances of expectations and cultural fit.
In emerging markets, a search partner with a depth of experience across that ecosystem can offer more valuable insight and execute quicker. Clients want you to share in the risk of their success and to advise on how to structure leadership teams at each stage of growth. That elevates you from transactional supplier to business partner. It makes your industry knowledge, judgement, and interpersonal skills more important than ever.
Erevena build executive and non-executive leadership teams to conceive, then scale, novel digital products and services. These innovations disrupt established markets by building consumer and B2B brands at breakneck speed. We also serve public companies transforming their businesses in response to this disruption. Our international approach to building networks ensures that we attract the best global talent. We believe that to advise our clients effectively requires a deep understanding of the ecosystem in which they operate. This can only be achieved by bringing together a diverse, international team of experts in board leadership, product management, marketing, sales, strategy, technology and advisory services.