Staff matters

What is your staff turnover?

The industry average is 25-30 per cent so if your staff are leaving quicker than that, you should investigate. The best companies keep staff turnover down to half that.

Are all your staff performing?

With the skills shortage in IT and the speed at which many dotcoms are growing – and hiring – it’s easy to forget that some of your staff may not be performing. A Silicon Valley company such as Cisco Systems has a policy of monitoring the worst performers, typically the bottom 5 per cent of the workforce, with a view to intervening to help them improve or letting them go.

Are you recruiting wisely?

Most dotcoms recruit through their own web site, through employee referrals and advertisements in newspapers and sites such as Monster. But in Silicon Valley there’s a growing trend to appoint company mentors to help candidates through the recruitment process. Remember also that most line managers will recruit people like them regardless of whether their skills are suitable for the job in hand.

Do your managers have the right skills?

The Internet, and indeed the entire IT industry, is often seen as the revenge of the nerd. The grain of the truth in that cliché is that in 1998 one US survey found that executives in technical positions at high-tech firms were 50 per cent more likely to be struggling in their jobs because of poor people skills. Some Silicon Valley companies even send IT managers to acting classes.

Respect the speed limit

At many dotcoms, speed is a virtual religion. Managers read business bestsellers with titles such as Blur, which preach that being first is everything, pore over magazines with titles such as Fast Company, and say things like, “Our staff like to work hard”. But the drive to do everything fast can lead to burn-out or, as projects get delayed, continuous over- working.

There is almost a cult around famous Net entrepreneurs who have slept in their office. For example, co-founder of Yahoo David Filo famously spent one night a week sleeping in his cubicle even when he was worth $800m. But such behaviour helps define the company culture in ways that may not be healthy. Other Internet innovations, such as hot desking, may contribute to stress at work.

Has your management got its eye on the ball?

Research suggests that managers of successful fast growing start-ups can get ideas above their station. You often need a sizeable ego to start a new company but that ego needs to be managed if the company is not to lose its way.

Military historians call this “victory disease”. The classic example is the squabbling among German generals in the autumn of 1941 after they, wrongly, assumed they had beaten the Soviet Union. Instead of focusing on their earlier target of capturing Moscow, resources were fragmented and the momentum lost.

In the US corporate arena, circuit board maker Jabil was so successful in the early 1990s that it diversified into computer manufacture with almost fatal results. Since then, it has set up a formal process to evaluate every new project against a realistic assessment of the company’s strengths and weaknesses.

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