For startups, 20% of people leave after a short time compared to the 12% for banks. When he chanced upon this statement posted by Benjamin Quinlan on Linkedin, Ned was intrigued, and after corresponding on Linkedin, he invited Benjamin as a guest for this episode.
Benjamin shares that after discussions with prominent startups, he understood that retaining talent was a challenge for them. While the structured nature of banks can drive people out of the industry, the lack of structure at startups may cause employees to leave. Without a system in place, people are granted more autonomy, resulting in double, triple, or quadruple hatting to maintain operations. Doing extra work often results in a pay raise in a corporate environment, but the same is not necessarily true for startups. Besides this, career progression is another factor that can cause people to leave a startup. When people come into a new position, especially at the early or mid-level, growth is a high priority. In a large bank, the career progression is detailed clearly, giving employees targets to set their objectives against. In comparison, it is much harder for people to understand how they might progress in startups.
Another point that Benjamin notes is that the cultural element is exceptionally crucial for startups to succeed. When hiring, Ned goes through every candidate to ensure that there is a cultural match. While it is essential to look for the best and brightest, it is also important to uncover if the candidate can thrive in a startup environment. Even though startups grant a lot of exposure and opportunities, it is not for everyone. This is why the founder of the startup has to take significant interest in his/her people. It is crucial to ensure that those you hire share the same values and management approach as yourself to prevent dissatisfaction among employees. When speaking about company culture, Benjamin is a proponent of diversity. He believes that diversity transcends gender or ethnicity and that it’s important to hire people with unique experiences and personalities. Rather than hiring people who think similarly to you, it is much more important to strike a balance.
Finally, Benjamin believes that startups begin struggling more when they reach a corporate level in terms of size. As the firm grows more prominent, having a form of structure becomes increasingly critical. Without a system, employees will be unaware of their responsibility and which projects they have ownership of. When a startup grows, it is essential to institute specific processes not to cause bureaucracy but to ensure that communication is clear. Without these processes, instead of the beautiful chaos which startups are famous for, it becomes just pure chaos.
