February 28th, 2008Are You Replaceable? Only if you don’t matter
Alex Iskold asks Are YOU Replaceable? He says what I’ve been thinking for a couple of years now. The idea that everyone is replaceable just isn’t the case anymore. Sure some people are but for small growing companies, I’d argue the Top 15-25% simply aren’t replaceable without a serious hit to the organization.
Things get really scary when it comes to visionaries and leaders. Alex says it well:
Losing leaders and visionaries is very, very costly. The knowledge, the vision, and the game plan that was in his head is unique and can not be replicated.
What’s interesting is that few if any startups consider this during their hiring strategy. Sure everyone wants to recruit the best talent, usually you’re going to toss in some options to keep the person engaged but then what? Our industry is very cyclic. Right now we’re (ok I’m) seeing some interesting stratification of talent happening. The Top 10% (aka the freakishly good) are now able to command above market rates - significantly above market rates. As the market heats up people really do seem to be willing to cherry pick and to pay for that privilege.
Recently I’ve had a couple of opportunities float by. In both cases the compensation for the year outstripped what I was currently making and the potential upside that I as a non-founder of a startup could expect over the life of a startup. Holy crap.
I can tell you that the super-sized packages make for interesting over coffee discussions but it makes trouble for the startups themselves. It also makes trouble for the person themselves because once $200k becomes the new $100k and then $250k, etc… it’s really hard to roll back to last year’s lifestyle.
I’m taking this as a wake-up call personally. Now more then ever companies really need to consider their retention policies. Clearly retention doesn’t just include raw compensation but the market does dictates rates. So take a look at your team, segment your talent and figure out a plan to keep your Top X% happy and engaged before it’s too late.
February 28th, 2008 at 9:27 am
Locally this could get interesting as well given even the University is looking at how it can recognize, foster, retain, and generally engage its talented staff. I am sure other larger organizations in town are rethinking their staffing strategies as well. Especially with the demographics in many of the regions long term employers — retirements are going to start hurting them if they can’t replace people.
RIM has been sucking up talented people for a long while but that seems to have stopped (not a good sign for RIM). For this region the challenge will be to keep talent around and engaged…
February 28th, 2008 at 10:41 am
Everyone is replaceable. Companies change and visionaries sometimes get out of step with them anyway. The companies may do better or worse as a result, but you can replace anyone. Steve Jobs was even replaced at Apple a long time ago.
But rarely are the correct people replaced. I’ve been replaced plenty of times, but none of those companies have done better after I’ve left, suggesting that I might not have been the problem.
Though Waterloo is a pretty insular and self-centered community, so perhaps that isn’t true here. But then again, there isn’t a place in town that would hire me so I can’t say for sure.
February 28th, 2008 at 12:50 pm
I am sure UW would hire you Larry… again
February 28th, 2008 at 6:00 pm
I agree with Larry … everyone’s replaceable. Everyone will be replaced. You’ve been replaced twice in the last two years, but I don’t think you’d want to say that you didn’t matter.
Any of us could drop dead tonight and the world will keep turning and the organizations we work with will keep on going. Sometimes the replacements are poorly-chosen, but we can all be replaced.
February 28th, 2008 at 8:25 pm
It was my year of the quitter, what can I say.
I’m definitely not saying I’m completely irreplaceable or anyone else for that matter. But I do believe key players leave a gap (some more then others) and I know from experience that few companies plan or protect from it.
I do think it’s interesting that the market has heightened to the point that salaries are going through the roof. Clearly companies won’t all be funded to play in this environment so it should make for some fun.
In any case I’m secretly more then happy to not have other companies heed my advice. Just makes my life easier
February 29th, 2008 at 5:37 pm
Perhaps I’m just too far out of the game here but I’m just not seeing a heightened market. I’m not even hearing about that many opportunities.
Then again, my skill set is unusual for this area, so maybe I’m just not hearing about this.
February 29th, 2008 at 8:59 pm
Hmmmn I had 3 in the past week so maybe just my lucky week. Some in demand skills I’m seeing:
* UX developer (not designers)
* Experienced Product Managers and Product Marketing Managers
* Architects with XTP experience
March 3rd, 2008 at 8:03 am
I think its true that everyone IS ultimately replaceable - just like the world keeps spinning when you die. But who cares about that case!
For startup in a hurry (an who ain’t) with a very oral culture (who doesn’t) taking a key strategist/visionary/leader makes a huge impact. It can be months until things are back on track. In my experience that means not hiring back directly into the role that left. The people in a team of < 10 everyone means adds unique skills to the mix. It usually means getting someone “else” with different skills that takes the team in a new direction.
Delay, distraction and change of direction all rob momentum. When you only have 12 months to live a 6 months of subpar productivity is a death knell.
March 3rd, 2008 at 9:34 am
Well said Jim.
I also agree on not hiring back directly into the role that left. In one of the two situations that @GaryWill refers to me being “replaced”, my departure spawned the creation of 3 or 4 new positions.
Also no company grows linearly. Typically it takes peaks and valleys to get where you need to go. As frustrating as that can be sometimes. If it comes to a death knell situation I suggest you read my Everything I needed to know about startups I learned from the Clash post.