In the battle to attract the best talent (because it is a battle), the lessons of tech focused businesses go further than just investment in employer brand. It's about culture. In the age of the porous enterprise, organisational culture is not something that happens in isolation within a corporate firewall. It still amazes me, for example, how many organisations fail to see the benefit of a significant digital footprint, in having employees who are externally facing, out-there interacting, expressing opinion, connecting, talking about the good work they're doing. Many businesses seem to prefer to have their good people internally facing, spending their time managing upwards.
Yet if the visibility of your talent and your best work is low, how do you expect to attract people who only want to work where the best stuff is done and where the smart people that they can learn from work? The danger is not just that you will lose the game, but that you're not even on the pitch. And if you don't get the best talent, you won't win. Period.
The best account that I've read of where Yahoo went wrong comes from Paul Graham (and he really does have unique insight). He talks about how they lost their way early on. How the wrong things became prioritised. How they began seeing themselves as a media company rather than a technology company. How they lost their start-up culture. How this meant programming was not taken seriously enough, became treated as a commodity, downgraded in influence and importance. How they lost the obsessive desire to hire the best programmers that you need in order to win. And since talent wants to work with other talent: "once the quality of programmers at your company starts to drop, you enter a death spiral from which there is no recovery".
The antithesis of this in technology companies is a strong hacker-centric culture. This post, describing how Facebook developes and releases software, is notable in articulating an engineering driven culture where everyone feels responsibility for the product. At Facebook, resourcing for projects is purely voluntary. Rather than a top-down hierarchically-driven organisation of effort, a Project Manager lobbies a group of engineers and endeavours to get them excited about their idea. The engineers decide which ideas they want to work on, and say to their manager what those things are. The Engineering Manager largely leaves these choices alone, perhaps sometimes asking that certain tasks get done first.
This post on Quora from the CTO of Etsy on how they manage their development and operations talks about how engineers are treated as 'creative collaborators' alongside design and product, and instead of simply being handed stuff for implementation, how products are worked out and iterated on with engineers. Developers regularly interact direct with Etsy members via their community forums and a status blog, which "gives everyone a deeper sense of responsibility for the code we're writing". The founder and head of product, Rob Kalin, stays in close contact with product and engineering but the teams have a lot of autonomy in how they work, staying within a broad set of architectural principles and overall design approach. Specs are very light, the emphasis on building working features.
The observation that Paul Graham makes is that the area covered by this kind of rule is bigger than most people realise. In answer to the question about which companies are in the software business, he suggests that it's any company that needs to have good software. I'd add a more general point. Technology companies naturally work in more agile ways, often focused around motivated, self organised teams and on outputs not input. But in today's world, show me a company that does not want to be more agile. Show me one that does not want highly motivated employees. That does not want its staff to be more entrepreneurial.
In Drive, Dan Pink talks about how everything we know about what motivates us is wrong. How the carrot-and-stick, hope-of-gain-fear-of-loss approach is outdated and ineffective in today's environment. And how in the search to produce creative solutions to problems, it is factors such as autonomy, purpose and mastery – the inherently human need to direct our own lives and efforts, to learn, to create new things, to make a difference, to make things better than they were before – that is the key to having high performing, motivated, happy employees. In the modern networked economy, as JP Rangaswami has said, it makes no sense to employ bright, talented individuals that bring new thinking into organisations and have the ability to solve complex problems, and then for management to tell them what to do.
In his excellent post about scaling start-ups, Chad Dickerson (Etsy CTO), suggests that people want to work in start-ups because they like to move fast, they want to make impactful decisions, want to DO things and BUILD things (not sit in meetings, or write reports), and take risks (he uses a great Peter Drucker quote: "People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year."). I'd argue that most talented people I know want exactly the same. They want a more grown-up way of working.
So corporate culture is no longer hidden, it's transparent. If you have a culture that stifles this kind of grown-up, fit-for-purpose way of working, you will not attract the kind of people and thinking that companies now need not just to gain competitive advantage, but to survive. As Paul Graham says: "Hacker culture often seems kind of irresponsible…But there are worse things than seeming irresponsible. Losing, for example."