We have mentioned in previous blogs that Oracle and Inc. Media joined forces last year to learn what the leaders of America’s fastest-growing companies credit their success. How did their companies land on the coveted Inc. 5000 list and how did they stay? What we found out was interesting―so interesting, that we decided to revisit this group of small-to-medium business (SMB) executives to see if anything has changed. And in a lot of ways, it did.
In 2018, SMB executives stated that the #1 reason for their success was an ability to sell to new customers and maintain those customer relationships as well. Awesome. But customers are not the subject of this article. We wrote all about them in a previous article. We were interested in the other reasons because success and failure is never about one thing.
Talent. In fact, 42 percent of Inc. 5000 executives stated that their ability to hire and retain the right talent was the key to their success. Considering that 47 percent named customer acquisition and retention, it seems that finding people and (both inside and outside the four walls of your high-growth company) and treating them right will lead to double- and triple-digit growth.
But why is talent so critical? The answer lays in the finances behind the talent. The people who are working for your growing company are your most valuable (and expensive) asset. Employee turnover can slap a fast-growing company right off the growth curve. Bad executive leadership, low employee engagement, failure to provide a work environment that attracts candidates, and even immaturity or lack of integrity are issues that can (and have) derailed some of the fastest-growing companies in the last decade.
So what does the Inc. 5000 feel that they are doing right? Culture. Sixty-nine percent of Inc. 5000 respondents stated that they had successfully built a culture that attracted the people that they wanted to employ. Compare this to the next most common answer, where eight percent credited their ability to construct an ideal candidate profile modeled from their best performing employees―a proven success factor, to be sure, but not one that the Inc. 5000 as a whole was focused on quite yet.
Some things stay the same, and some things change in importance. For those Inc. 5000 companies between $100 million and $500 million, 69 percent attributed their success to the right culture. But the number who attributed continued growth to their ability to create a model of their ideal candidate and then recruit them almost doubled to 13 percent. So, as we have discussed in previous blogs, establishing and advertising a great culture is crucial to the recruiting process, but once a company learns the type of employee who excels, they use that as a blueprint (if you will) to find others with the same skills, expertise, and competencies.
Companies on the Inc. 5000 are planning to invest in growth, with the largest amount going to gaining, keeping, and growing customer relationships (chosen by 85 percent of respondents). But coming in at a very close second (at 80 percent) was hiring and retaining the right talent. And how do they plan to do that? The overwhelming majority (47 percent) plan to build a leadership team that is equipped to handle the demands of a fast-growing business. And as the job market continues to open up, employees are presented with opportunities at other companies, 16 percent will focus on succession planning and career advancement.
Talent management priorities change as companies grow. For those Inc. 5000 companies between $100 million and $500 million, succession planning and employee career advancement leaps ahead as the number one priority. This is where 36 percent of the larger companies on the Inc. 5000 companies plan to focus their spend. However, less (28 percent) will focus on building the right leadership team, indicating just how important establishing the right management team is early on in a company’s life.
However, when asked “what are the biggest obstacles to your company’s continued growth?” those same leaders overwhelmingly pointed to problems around talent acquisition. Forty-three percent of Inc. 5000 leaders named it as one of their top three concerns for 2018, and almost two-thirds (65 percent) of larger Inc. 5000 companies listed talent acquisition as one of their top three obstacles for 2018.
Talent is the life-blood of any company. Transformational technologies can speed processes and shorten timelines and analyze humongous amounts of data to see big trends, but the talented people that you employee are going to be the ones who design those processes, and use those trends to identify new markets, new products, and new audiences.