Our most recent Light After Dark event featured a panel of experienced HR and People leaders discussing Talent Efficiency. Their conversation touched on what talent efficiency means, why it often requires measuring productivity differently, why it’s important with a potential recession looming, and how distributed organizations are often forced to become more efficient than their in-person compatriots.
The fantastic panel included:
- Allison Pickens – Founder and General Partner at the New Normal Fund
- Shishir Mehrotra – Co-Founder and CEO at Coda
- Christine Tao – Co-Founder and CEO at the Sounding Board
- Tiffany Lee – Head of Talent Engagement at Zoom
You can watch the full panel video below. Here’s a summary of their discussion and some of the key themes that emerged.
Classic Performance Metrics are All Wrong
Several panelists explained that many of the metrics used to measure productivity either don’t do a good job measuring efficiency, or actively discourage it. All of the panelists pointed out that headcount is often used as a proxy for growth, but that doesn’t measure how well a company is solving fundamental questions or creating value. Similarly, measuring the product team on how many new features they ship ignores how valuable these features are. This actually discourages innovation.
Shishir shared an anecdote from his experience coaching his daughters’ robotics team. Each year, the team argues hard to make their team as small as possible. Every extra person creates multiples more effort for the team to align, collaborate, execute. This runs counter to the belief that putting someone in a seat will solve the problem or yield more results. It’s easier to do more with less.
Allison noted that individual or team measures of performance don’t reflect how well the company is doing overall. She mentions that talent efficiency is measured today by amount of output or with team/company hours spent. This can become a problem when talent is scarce and lead to burnout. Allison suggests that it’s better to be strategic and spend less hours to get that same revenue. For example, if your product has product-market fit (i.e. has a ready market or effectively solves a problem), it can lead to less hours of work to generate revenue.
Building Efficiency as a Distributed Company
Several questions centered around the issue of building efficiency in remote, hybrid or distributed companies. Tiffany said that it “comes down to your management style and talking to your team about how they want to be managed…this takes more time when completely virtual.” She shared that she has conversations with all her distributed team members about how best to manage them, but also she asks them to “show up” in a certain way when the team has a need.
According to Shishir, “The practices you develop to be a good company while distributed tend to help you when you’re together – that doesn’t necessarily mean you should never be together. The most important thing about being together is the human connections we form.” He explained that some of Coda’s processes for running virtual meetings, like having participants add questions to a running list and then vote them up or down rather than having open Q&A time, resulted in better meetings. Employees still use these processes when they’re meeting in person.
Talent Efficiency Company-Wide
Several panelists agreed that measuring the efficiency of the company overall was more useful than looking at the efficiency of teams or individuals. Christine added that “Efficiency comes from different things: staffing and resourcing effectively, setting the right priorities, all the way down to individual and team productivity.” Shishir even went as far as to say, “CEOs hate seeing people waste their time. When I hear of someone doing something they didn’t need to do, I’d rather they have gone to the beach!” Developing alignment among a company’s workforce is a good way to improve this, but many founders and CEOs struggle with this!
Downturns as Drivers of Innovation
When asked how they are thinking about the recession, panelists responded with a mix of optimism and pragmatism. Shishir and Christine, who had both been through past recessions with other companies, pointed out that recessions often forced companies to improve their fundamentals. Shishir said, “We control value, not valuation” and “Scarcity breeds clarity.” Christine added, “Market changes don’t mean you have to retract, it just means you have to focus more on alignment and prioritization.” Allison agreed, explaining that she’s seen really passionate founders overlook problems with their companies because they’re so excited about building them. Constrained capital often forces these founders to dig in and address these issues. Bottom line: The companies that take this opportunity to operationalize talent efficiency will be the winners coming out of this downturn.
What did you learn from this conversation? Please reach out and let us know, or suggest topics for future panels.