Sunday, November 4, 2012

Grow Your Company Rather than Build It

In science, the verb culture is used informally to refer to "selectively growing" and the noun culture is the result of that cultivation"

Simply put, the culture of companies is comprised of individuals that share some common traits, goals and backgrounds. They have been attracted to their companies because of these commonalities and will be inclined to move to the next company that offers them a similarly compatible environment.

I have been a recruiter at startup companies for many years. I've seen or heard most of it, but I like to learn and I like to think about how to improve the process. One day, I was doing some competitive analysis on my industry and I plugged 'recruit' into a search engine. For the most part I got the typical job boards and career sites, but one of the entries was related to microbiology. From that point I found that this domain uses the term recruit pertaining to cells trying to attract specific cells to perform a specific function. This was notable because at the time, I was also thinking how the process of companies and groups spawning other companies, growing, coming together, splitting, and recombining can be described using genetic language.

As all that was mixing around in the back of my mind, I read an article that talked about changing how we should view the world. In the industrial age our taxonomy was based upon a mechanistic model. Now, in the information age, we should follow a biological model. At that point, I knew why this was making sense and I began to formulate a biological analogy to describe how companies form and grow.

First, let me say that I have a very low tolerance for B^ll $h*t so even attempting to write this has me questioning my own convictions. However, this is not a scientific endeavor and as long as it makes a good read and provokes some thought, I will be happy.

Biological Recruiting Model

The heuristic for our analysis will be to describe a company's growth as a biological phenomenon. Then, by using terms from the fields of microbiology and genetics, explain the process and variables effecting how companies acquire that ever so elusive resource badly named "human capital". Once we have described how these terms relate to building companies, we can apply that understanding to improve the success rate of attracting, hiring and retaining employees.

Companies exhibit growth like organisms do. Organizations incorporate individuals into powerful forces with a common goal just as small polyps measured in centimeters, form some of the largest structures known on earth, the coral reefs. Every day, VC's "breed" companies by adding a key individual to a team or combining two startup groups pursuing similar markets to become one entity.
Please note that this model will apply equally well to startup or established companies.

Company Genealogy

I found it very interesting the there is a term from genetics," the founder effect"[1], which describes a small group breaking off from the larger population to form a smaller group. One of the exercises I have always thought would be useful is to create a map or family tree of startup companies. Although this is a huge undertaking, I would love to help any academic institutions up to the challenge. Once created, it would be evident that certain companies are at the root and that the branches and leaves contain some elements of the root companies.

If you view the core team as a company's DNA you can then observe specific traits and characteristics exhibited by the organization. One company's engineering team profile might look something like this; micro biology degrees from Harvard, worked at the Whitehead Institute then Genzyme, enjoy bicycle racing. Another's might be; into sci-fi erotica, involved in the free software movement, look like Richard Stallman, like the band Boiled in Lead, practice martial arts and have a disdain for corporate environments. The point being, individual companies have distinct characteristics determined by the core team that describes their make up. Furthermore, you can observe that over time, successive generations of companies inherit traits from the recombination of founders and employee groups. As a result, probabilities for successful hires as well as the potential success of the company can be determined based upon the makeup of the organization. I use this process daily to help me determine candidates for the searches I conduct. 

Three Components of Successful Recruiting

The process of recruiting can be explained using terms from genetics as well. First of all, just as DNA has an intermediary (RNA) to the outside world, a company has a recruiter. The function of RNA is to protect the DNA from the outside, transfer messages and deliver those messages to the appropriate targets. In microbiology, cells recruit other cells using promoters, attractors and receptors [2]. Combining all these terms and concepts, we can fairly accurately describe the variables required for a successful recruitment effort.

Receptive Talent Pool

By determining the "genotype" of your company based upon common experience and cultural affinity you can define your archetype candidate and put together a message that will be attractive to them. Research utilizing the knowledge that companies form and grow in an evolutionary manner, will help you to determine the target companies that will produce the highest probability for a successful hire. Combine this with knowledge of stock option prices, lock up periods, merger and acquisition phases and the like, one can generally predict who may be susceptible to recruitment and from where the next start up might emerge.

Attractive Company Brand

At the most basic level, recruiting is a marketing function. The first branding exercise for a startup is putting together the message that will be used to create a buzz in the marketplace and entice potential employees to investigate the opportunity. 

The attractors in this case will consist of the investor information, background on the founders and a description of the mission or target market. Over time the company culture will have emerged and will begin to pull those with similar values toward it. Once the message has been crafted, campaigns can be mounted to target the audience most receptive to the pull of the team and culture. 

Promoters For Your Company

Company employees, marketers, customers and agents spread the word out about your company and job opportunities. The obvious first promotion step is to have your employees contact their personal networks and then to mine them for referrals. In my experience, the best companies hire the bulk of their team through internal referrals. Ideally, once a company has an employee from a competitor or recruiting target, a steady stream of candidates will be available from that company. Some interesting points I should make are that a company that is comprised of a core team from only one company, will have a harder time recruiting than one where the founders come from two or three different companies. Having a larger pool to fish from will prevent them from hitting the wall as their personal networks exhaust themselves. Also, companies that hire everyone that has the same background tend towards a sort of "inbred" situation that amplifies the negative traits of the group and becomes less attractive to the candidate pool.

Beyond employee referrals, well targeted employment branding campaigns, company profile pages, compelling job descriptions, customer evangelists, community initiatives and yes, recruiters raise awareness and create interest in your company.

 People Not Capital

There are no pieces to assemble or build our company with, only talented people. By looking at recruiting through a biological lens, we can mimic the processes used in nature and described by science to help guide our effort to find and stimulate the allure of our companies to prospective employees. Understanding that a company is a “living” organism made up of people, not capital assets is the first step to succeed in the struggle to grow companies. 

This is a rewrite of a post from several year ago. › Home › Evolution 101
An example of a bottleneck: Northern elephant ... A founder effect occurs when a new colony is started by a few members of the original population. This small ...
Sep 16, 2011 – One project addresses the issue of cells as 'dynamic attractors... The minimal requirement for this switch are two viral promoters, the virus ... away tyrosine kinases Syk and Lyn from B-cell receptor (BCR) in B cells, and Zap70 ...


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