08 Mar 3 ways entrepreneurs can overcome the human-capital crisis
Silicon Valley is synonymous with innovation, but exciting entrepreneurship is occurring all around the world.
In places like Kenya, Indonesia, and India, emerging market entrepreneurs are pioneering new ideas and building companies that are moving the needle.
Drones are delivering medication to villages without roads; solar startups are bringing electricity to rural communities for the first time; and mobile technology is empowering small business owners to increase their profits.
And while Silicon Valley may seem a world apart from these emerging markets, both geographically and economically, there are a lot of synergies in the way these social entrepreneurs are building and scaling their companies.
I recently spoke to Doug Galen, CEO of RippleWorks, about the biggest challenges entrepreneurs are facing around the world. While funding is always at the top of the list, there is one challenge that gets increasingly difficult over time: the ability to attract and retain talent with the right experience and expertise to bring these enterprises to scale.
“Over 75 percent of funded, early-stage entrepreneurs say that not being able to access the talent they need will have a crucial impact on their growth,” said Galen. “As a result, budding entrepreneurs need mentors, expert advisers, and other sources of outside help to address their immediate challenges.”
RippleWorks, with analytical support from McKinsey and funding from Omidyar Network, recently surveyed more than 600 social entrepreneurs around the world and captured the perspectives of CEOs, funders, and intermediaries to release a report, The Human Capital Crisis: How Social Enterprises Can Find the Talent to Scale, that offers a glimpse into the talent challenge and ways to overcome it.
Here are three ways entrepreneurs can find the talent they need to scale their businesses.
1. Make hiring and recruiting a strategic priority
Just as entrepreneurs envision growing their businesses, they need to anticipate future hiring needs. They can’t afford to wait until they have market demand — they need to forecast and understand the process of sourcing, recruiting, and hiring qualified candidates.
And since budget constraints are often a fundamental limitation, it’s important to win talent by thinking beyond compensation. Entrepreneurs need to plan well in advance, devote strategic effort to recruiting, and sell jobs to candidates through a strong employee value proposition.
2. Don’t just train employees, grow leaders
Senior and middle managers are the most critical hires but also require the most difficult and time-intensive process to secure. Galen notes that most of these positions can take from three to six months, or even up to a year, to fill, which is time most start-ups don’t have. Entrepreneurs therefore need to equip themselves to meet their future leadership needs by making training and development a core competency of their business.
In the report, 38 percent of companies surveyed revealed that their preferred approach to addressing skill gaps is by training their current staff — stating that funders need to actively support leadership development programs, especially for middle management, to create the long-term executive teams required to scale their startups
3. Leverage mentors and advisors for your changing needs as you scale
In addition, using the expertise of seasoned business and technology experts can play an important role in bridging short-term human capital gaps.
Business leaders who have scaled world-class companies like Google, Salesforce, and Airbnb are starting to pair up with like-minded social entrepreneurs tackling the world’s toughest problems. These expert volunteers partner with ventures, virtually working with them around their day jobs before visiting on-site for a week. They provide exactly what social entrepreneurs need: help solving critical challenges while transferring knowledge to further build the company’s human capital.
One example of a Silicon Valley executive who is helping to make a difference is Kayti Sullivan, a vice president of sales at Yelp. Sullivan has been with Yelp since 2007 and knows first-hand what it’s like to scale a company from the ground up.
Through RippleWorks, Sullivan partnered with NeoGrowth, a fast-growing company that uses technology to unlock access to short-term loans for small businesses in India, a country that has never had access to formal lending with more affordable rates. Together, their team increased revenue growth through a cost-effective, technology-driven sales strategy that has enabled NeoGrowth to partner with 2,300 small business merchants to grow their businesses.
“We need more leading entrepreneurs to recognize that they can help make a difference around the world with the skills that they have accumulated over their careers,” said Galen. “By working with inspiring social entrepreneurs to address interesting and pressing challenges, they can play a pivotal role in the growth of some of the world’s most impactful startups.”
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