Case Study: Start-up To Growth Company Challenges Optimizing Roles, Competencies and Assessments
Company A is a start-up technology company. It was started 3 years ago by its Co- Founders to enhance the personal security of Internet transactions. The product allows a user to securely store their personal and credit card information in exchange for a code that can be used across all sites on the Internet. As a result, the customer secures all personal information with one company, instead of multiple companies, reducing the risk of security fraud.
The company has grown quickly over the last 3 years. Company A has grown from a team of two (the two Co-Founders) to 20 people within six months, 40 people after a year and 100 people by the end of the second year...and the Company is still growing!
It is an exciting time for all. The technology is attractive with retailers and, as a result, the Company has been highly sought after by investors and some major technology companies in takeover bids.
However, with this growth, new requirements begin to arise. The close knit, highly hands-on management style has begun to change to a decentralized, bureaucratic environment that takes some maneuvering to get things done. In addition, the quality of work is beginning to deteriorate and the costs are increasing considerably. The issues are not the skill of the talent, or their engagement, or their confidence...or are they?
Inception through Six Months
As a true start-up, Company A was focused on innovation. The Co-Founders supported proactive, critical thinking and collaboration as critical key competencies to their success. Everyone at the company held themselves accountable for their actions. They really wanted to be there...there was an overwhelming excitement about the possibilities!
The team was very close (personally) and they had highly talented people focused on the company goal – technology development. The Co-Founders brought the best and the brightest talent in the door in the areas of expertise needed to enhance the product to the point where Company A was worthy of private equity investment. Everyone, now at twenty strong, knew their job and knew it well!
With the focus on product development, the other areas important to a fully functioning organization (accounting, infrastructure, risk management, marketing/sales, etc.) were put on the back burner for now...and rightfully so, because without the product, there would be no business.
Six Months through End of Year One
Company A was still growing with 40 people employed...the focus was still on product development, but the Co-Founders, themselves, were beginning some marketing and sales efforts. Great progress had been made and the Co-Founders were starting to see some interest from private equity. However, further enhancements were still required to bring the technology to the point that it was truly a viable product for the market.
So the additional employees that were added were still focused on the technology. The talent continued to be the best out there...they were the experts in their field.
What a Year This Has Been! After three months into the year, the company has 100 people and the company has secured private equity capital. The Co-Founders now have to deliver to the many more demands of the private equity investors...answering to someone else is not something that they are use to, but they understand that it is part of the deal.
Significant pressure is on! The investors want financial information so they can begin to think about exit strategies and multiples of money. Retailers want to understand the processes established to manage the payment between Company A and themselves. Customers are clamoring for an understanding of the control environment for their personal information. Marketing and sales is under pressure to continue the growth seen thus far. And the list goes on!
However, with how the organization has been staffed, the Co-Founders are struggling to meet the needs of the new constituents – private equity investors, retailers and customers. The Co-Founders have moved Chris, a high-performing, truly brilliant, technology developer, to manage the work around the internal operations of the organization. The operations work is now getting done, but the quality and efficiency of this work is highly questionable.
Case Analysis: The Prism Partners International Approach
The problem above is not uncommon to companies as they move through the various phases of their lifecycle. Whether it is a start-up to growth company, or a long-lived, multi- national organization with tens of thousands of employees, organizations can easily lose sight of which roles are truly strategic to their strategy and which competencies are absolutely required to perform each role successfully. Once this strategy-role-competency alignment is understood, the performance assessment process becomes much more valuable, ensuring that the right people are in the right roles.
After spending the time to listen and understand the strategy and culture of an organization, Prism Partners International embarks on a deep dive into the organization to begin the process of aligning strategy, culture and human capital performance.
As an organization grows and naturally shifts its strategy to meet its goals, the need for specific roles within the organization continues to evolve and change. For Company A, the roles required in the start-up phase were around technology development. The people that were being hired to fill these roles were focused on this strategic goal. The Co-Founders identified these roles and hired the best.
However, as the organization evolved, the roles that were needed to take the company to the next level expanded. New roles and competencies were required to meet the demands of external parties interacting with Company A. Beyond the technical experts, specific roles around marketing/sales, accounting, operational processes and risk management, needed to be created within the organization to keep pace with the strategy.
Prism Partners International defines two types of leaders – a Strategic Leader and a Knowledge Leader. Chris is a Knowledge Leader – a technical expert. The organization needs Chris in his original technical role. The organization also needs a Strategic Leader – a visionary – to create, manage and lead the new operations team focusing on marketing/sales, accounting, operational processes and risk management. Both roles are critical to the success of Company A. Prism Partners International would help the organization identify this need sooner, rather than later, to ensure that Company A can execute on its latest strategic initiatives.
Once the required roles are identified to take the strategy forward, it is then imperative that the organization identifies the competencies required to execute these roles successfully. Both the analysis of the roles and the identification of the competencies is Prism Partners International’s Role and Competency Alignment process. Without considering who is performing the role at this point of the analysis, Prism Partners International will work with managers within the organization to identify which Organizational/Behavioral Competencies and Strategic/Knowledge Competencies are required to perform the ideal roles defined in the roles section above.
This analysis will allow management to determine, using our assessment model, if the individual currently performing the role has the competencies required to execute on the strategy, and is performing within the role effectively and efficiently.
Unfortunately, the current team of technology experts, particularly Chris, does not have the competencies required to execute effectively and efficiently within these new operational roles. Even though Chris is exceptional as it relates to his technical expertise in software development, he does not have the competencies required to perform the operations role required by Company A.
Using Prism Partners International’s role and competency-based assessment model, FACCETTE, the management of Company A can accurately forecast and align both individual and team performance to the new strategic initiatives of the organization. Periodic assessments and the use of our individual development plans, Spectrum Development Roadmaps, will allow the management of Company A to recognize the performance risks associated with a strategy shift and take actions to mitigate those risks prior to them disrupting the growth of the organization. The three measurable outcomes of the assessment are:
- Manager and employee accountability
- Productive, aligned efforts in concert with Company A’s broader strategic objectives
- Increased organizational results
Continually shifting strategies without proper and continual assessment of the human capital requirements to deliver those strategies sets the organization up for failure. Rigorous and periodic resource assessments are imperative to an organization’s long-term success. In the short-term, organizations become reactive resorting to a “plug and play” resourcing model, instead of putting the right people in the right roles aligned to execute on the strategy. Thus, organizations mistakenly believe they have the ability to achieve their goals, when, in reality, they actually have created teams – and an organization – that does not have the aptitude, engagement and confidence to accomplish its goals. The human capital component has a direct impact on strategic results. When the organization is out of alignment strategically and culturally, employee disengagement and compromised organizational initiatives are the result. If your people really are your most important asset, what are you doing to develop and align them to your organizational success?
Prism Partners International’s Organizational Impact Spectrum evaluates organizations to ensure human capital keeps pace with, and is aligned to, strategic initiatives.