Employee Motivation: A Critical Business Driver at the Expansion Stage?
When you were a start-up, everyone was essentially self-motivated. Now that your company has grown, will employee motivation persevere?
Employee motivation is not a new topic. Much has been written, and any business school student or HR manager will probably be familiar with theories on human motivation factors such as Maslow’s hierarchy of needs or Herzberg’s motivation-hygiene factors model. Newer theories point out how managers can, instead of motivating employees, demotivate them with bad management practices and arbitrary rewards systems. Successful employee motivation mostly comes as a result of a successful combination of judicious application of these theories and a consistent focus on employee satisfaction and retention.
Early stage software companies, which form OpenView’s core focus, deal with a unique set of challenges for this issue. On the one hand, early stage start-ups are stereotypically full of young, hard working, ambitious people who are extremely motivated. The fact that highly qualified employees willingly forgo job security (in the form of employment at more established firms) for the chance to participate in a new venture, definitely evidences the appeal of the early stage environment. Many early employees, however, are not purely motivated by financial rewards (although they are rich for early team members), but by the challenge of building something new, or disrupting a market. One can say new ventures have plenty going for them in terms of keeping their employees motivated and engaged.
However, sometimes these same conditions may work against a company as it enters a more mature stage. The product development team, the core focus of the organization where innovation and exciting challenges happen, now typically has to deal with less inspiring, though equally important issues: product bug fixes, customization, integration. Many early engineers have now been promoted to managers and start to realize that the management jobs typically leave little time for invention and hands on development. The same scenario probably replays in other departments, as the young entrepreneurial spirit appears to be dampened by the daily grind of a growing business.
Therefore, in this later stage, the company has to be more conscious of its business functions, profitability and top line growth, all of which forces it to be more outward facing and less inward facing as it seeks to address extrinsic demands such as those of customers, partners and investors. The lack of focus on internal development will undoubtedly lead to a sense of alienation by many employees, or even a loss of purpose by formerly enthusiastic employees who thrive on the unison of purposes that characterized the early organization.
Furthermore, the last few years have seen the tremendous success of young entrepreneurs who have made a name for themselves unabashedly, whose talents, smarts and drive more than made up for their lack of experience. These are shining examples of success that every ambitious person in the technology world wants to emulate.
And as a result, even extremely successful tech startups like Facebook or Twitter sometimes find it hard to retain extremely talented early employees, mostly because those highly qualified contributors find another place/job that motivates them more. It is not because they have been de-motivated, but rather that they are looking for the constant high and the chance to hit the home run, like the superstars described above. So what about lower profile companies or less glamorous new ventures? What can they do to retain their top talents by keeping them motivated if juggernauts like Facebook or Twitter fail to do so?
In my next post, we will revisit this issue, and describe a few useful steps to help maintain motivation in the transition to the expansion stage.