Your top-performing team members are far more productive than you think. Especially at startups.
The implication: build leaner teams, invest more in each team member, and invest more in hiring to find more people like them.
Purple squirrels and 10x engineers
Top performers on your team look nothing like the myths of god-like performers you might’ve heard about.
In tech, the mythical 10x engineer apparently codes all night alone in dark rooms to arrive at genius breakthroughs. They create 10x the output of average engineers. Critics rightly poke fun of this myth:
The critics are right: the best engineers do not code alone in a dark room.
In hiring, managers sometimes describe their ideal candidates through impossibly long lists of must-have experiences. For example: 'Must have PhD and be street smart', etc. Recruiters ridicule this way of describing top performers as 'Purple Squirrels’. The chance of finding a candidate that meets must-haves is as small as finding a purple squirrel.
Recruiters are right: The best hire is not one who meets the longest list of requirements.
In short, Purple Squirrels and 10x Engineers are distractions.
Your best team members are more productive than you think
Instead, top performers create 10x outcomes through mundane, high-leverage work:
Great hiring.
Giving upwards feedback that changes the company strategy.
Rallying their team members to be more ambitious.
Testing solutions early before investing a lot.
We’ve all worked with someone who’s marginally better at these things. These traits are not mystical.
In startups, we should expect small differences in skill to lead to enormous differences in outcomes between top and average performers for two reasons:
1) In creative work, there are big differences in output between the best and the average. I would never be able to produce a Mona Lisa. Building a company is creative work: imagining a new future, experimenting with new ways of doing things, crafting a workplace.
2) Early team members hire the next set of team members. Great people hire great people. Over time, the difference between really good and pretty good early hires compound.
In a creative environment where the early team hires the next people, it would be surprising if all team members create roughly the same outcomes.
In short, your top performers are far more productive than you think.
5 trade-offs you’d make differently if you took your top-performing team members seriously
I'll assume you're already doing your best to build a workplace that attracts great people, so I'll focus on trade-offs. I am very much still learning how to get this right at Aula.
1) Fewer folks ⬇️
Principle: If you could increase the density of top performers, you wouldn’t need as many people. Fewer people means less overhead of all kinds.
At Aula: we have lower headcount than when we had 1/10th the users. I am continually surprised at how good our best folks are.
What you can do today: Create a hire approval form. Challenge your team to solve problems without hiring. Ask what it would look like to hire fewer but more expensive people
2) Pay top of market ⬆️
Principle: You can’t afford to lose a top performer because of pay or benefits. A tiny increase in attracting or retaining top performer justifies paying e.g. 20 % more. Fund the increase via lower headcount. Or give stock options.
At Aula: we’re trending towards higher pay, but we are still adjusting. We’re currently at 66th percentile salary plus equity and generous benefits. I expect this to go up, not down. Read our compensation framework here.
What you can do today: Set yourself a reminder for the next time you get leeway to change budgets. Or restructure your budgets.
3) Double down ⬆️
Principle: You can spend more to increase the output of each team member by say 20 % if you fewer, high-performing team members. From executive coaching, software tools, outsourcing manual tasks to virtual personal assistants.
At Aula: the whole executive team has an executive coach and a personal assistant. Over time, we’re likely to make this available more broadly within the company.
What you can do today: Set aside budget. Contact Reboot.io, Torch.io or another coaching firm. Ask your team what would make the biggest difference to their producitivity.
4) Top up your top performers today ⬆️
Principle: Your top performers are always underpaid. You might pay them 20 % more than other folks at similar job levels. That doesn’t reflect their contributions, and you’ll regret it if they leave. You know who they are.
At Aula: We strive to proactively bump top performers but have ways to go to make all managers empowered to do this. Structurally, we have so far erred towards avoiding bias; we may discover ways to both reward top performers and avoid biases.
What you can do today: Work with your team to identify the top performers in your company/department/team. Give them a 20 % pay rise. You’ll still be underpaying them.
5) Make bigger hiring bets ⬆️
Principle: Big differences in performance should lead you to accept more risk. You should be willing to hire someone who has a 50 % chance of changing your company's trajectory and 50 % chance of not working out. On the condition that you are transparent about this upfront, and are able to part ways if it doesn't work out.
At Aula: we have yet to figure this one out. So far, we've been careful in hiring decisions.
What you can do today: Focus hiring decisions around conviction rather than absence of risks. Be candid with new-joiners about the risks.
What have I missed?
Email me at runetybirkvist@gmail.com