A shorter employer-employee compact can be instrumental in retaining talent and leveraging each others entrepreneurial streak, Ben Casnocha tells Rohit Nautiyal
India's entrepreneurial story is not new but these days we see many professionals giving up full-time jobs to start consultancies, IT services companies and e-commerce websites, among others. What has changed about entrepreneurship globally that we can learn from?
Today it is way cheaper to start a business anywhere in the world. Look at e-commerce. Previously just the cost of building a server and hard drive was expensive. With the internet access, now anybody can get a professional website in minutes. While starting my first company in the nineties, I had to make a trip to the San Francisco Public Library just to understand how to write a good press release. The internet has ushered in the golden age of entrepreneurship. However, a few things remain the same. For different reasons, a lot of these young entrepreneurs will have to shut shop and return to the workforce. Some of them will be acquired by bigger corporations. Then start-ups have a fair share of HR challenges as well. Employees working at start-ups demand higher autonomy, control and freedom. Anyone willing to take on the risk of associating themselves with a start-up will justify these demands.
Going by what you are saying, unsuccessful entrepreneurs are a readily available pool of talent then...
Companies don't understand the risk of inadequate talent management. I have addressed the topic of 'psychology of risk' in my last book The Start-Up of You. Not having a policy or philosophy of cultivating entrepreneurial talent in one's organisation is incredibly risky. It is even riskier not to be receptive towards similar conversations because this can prevent you from attracting and retaining some of the brightest minds in your country. While I am not aware of the unique pitfalls faced by the Indian MNCs, companies from various industries across the world are increasingly looking for the best in class. This is one core management idea with a universal appeal.
You can't have an agile company if you give employees lifetime contracts as the best people don't want one employer for life anyway. But you can build a better compact than "every man for himself". In fact, some companies are doing so.
So can we consider tour of duty as Linkedin's human resource IP?
Tour of duty was religiously followed by Linkedin's co-founder and executive director Reid Hoffman while hiring people during his tenure as the chief executive of the company. Since then Linkedin has been experimenting with various versions of this employer-employee compact. While an arrangement of this nature can be made accessible to all employees, it makes more sense to prioritise tour of duty for leadership profiles. That said, every organisation has a sizeable corporate middle-class with different skill sets and agendas. In the future, companies will have to adopt their entrepreneurial policies for these employees.
In a scenario where job hopping is more the norm than the exception, what are the advantages of engaging with the corporate alumni?
The likes of Yahoo! and Chevron have been doing this for long. But there's a bigger purpose in this other than just rehiring. Companies should see ex-employees as knowledge repositories and tap into their network intelligence from time to time. While not a large number of people who have worked with you are likely to return, there is no harm in maintaining cordial relationships. Boston Consulting Group and McKinsey keep in touch with ex-employees by organising alumni dinner parties. Taking the engagement level a notch up, Microsoft provides early access to its soon-to-be-launched software for former employees. Besides, the company offers discounts on its products and sends out annual newsletters to keep its alumni abreast with what's new.
Sadly, even today many companies suffer from not-invented-here (NIH) syndrome which is defined as an aversion to ideas generated outside an organisation. To encourage new ideas from outside, marketing software services company HubSpot allows its employees to take smart people in their network out to lunch. The only condition is that employees will have to share what they learned from these people with co-workers at the company. This also helps in creating a positive pressure among employees to keep building their network.
How can companies get started with their corporate alumni engagement strategy? Don't you think such practices can boomerang as it will become easier for employees to look for, if we may say so, greener pastures?
If an employee made up her mind to leave, she will do so. And it won't be wise on the part of a company to turn vindictive. Start by maintaining a corporate alumni directory and send yearly updates on what's happening in the company. All reputed universities have been doing this frequently.
Corporate alumni engagement strategy will become a major concern for corporations and start-ups in the next five years or so.
How can social media help in building awareness?
Social media can cause a lot of embarrassment. But putting stringent policies into action is not the right way of dealing with this. More policies will lead to a high trust deficit between employee and employer. If you have made up your mind about letting go of your employees so they can build a strong network, don't shortchange them. Earlier, US-based Staples Inc did not allow its employees to talk about the company on social media platforms. Subsequently the company lifted this ban and now uses the feedback shared by the customers to improve its operations.
Life and ideas of Ben Casnocha
- Earlier this year, Casnocha introduced the concept of 'tour of duty' in a co-authored article along with Linkedin's co-founder Reid Hoffman and Chris Yeh, a San Francisco-based start-up investor in Harvard Business Review. Tour of duty is a new and shorter employer-employee compact that works towards employee retention and creates value for the employer
- Hoffman and Casnocha have also co-authored the book The Start-up of You, which talks about how to accelerate your career in today's competitive world
- Between 2008 and 2011, Casnocha was a partner at Wasabi Ventures
- He founded complainansresolve.com in 2001, a free service for California residents to complain against civic issues