Insights from the 2024 Talent Workshop

Matt Compton

August 2024

OVF Venture Partner, Susy Dunn led our annual Talent Workshop for CEOs and Heads of People. The leaders of our 39 active portfolio companies were invited to participate. We focused our discussion on three areas: 1. leading high-performance teams, 2. designing scalable compensation programs, and 3. recruiting top talent. Here are a few insights from the discussion.

1.      Leading High-Performance Teams

Vision and Alignment: High-performing teams are driven by a clear vision, values, and purpose. It’s essential for companies to set clear, specific, and measurable goals that align with their overarching vision. Regular communication of these goals at all organizational levels ensures everyone remains focused and motivated.

Feedback and Communication: Regular check-ins and feedback are crucial. Instead of relying solely on annual performance reviews, implement frequent feedback mechanisms to keep teams on track.

Tools such as Slack and Asana for OKRs, and HRIS systems like Hi Bob or Culture Amp, can facilitate implementation of your processes. Employee NPS: While not advisable as a sole performance tracker for CEOs, it can serve as a useful barometer for changes in employee sentiment, particularly during leadership transitions.

2. Designing a Scalable Compensation Program

Strategic Alignment: Compensation programs should align with long-term company goals. Developing a comprehensive compensation philosophy that reflects the company's values, resources, and growth stage is crucial.

Align compensation structures with the company's overall goals and ensure they are communicated clearly to all employees. Simple and understandable is better at almost every stage of company but especially in the early stages.  

Example Compensation Philosophies

• We provide meaningful compensation packages that fuel growth, are market competitive, and retain our top performers. Cash and equity compensation levels are targeted at the 50th percentile for employees who set the standard of performance for a given role.

• We’re mindful of using cash wisely balanced with equitable, transparent rewards that pay for performance.

• We structure appropriate risk/reward ratios for each employee segment - e.g., Sales will typically have a higher percent of OTE [on-target earnings] at risk than Engineering. Leaders will have more at risk than ICs.

• We prioritize funding learning and development programs as part of the compensation strategy to emphasize employee growth.

Market benchmarking:  Data tools like Pave are available for free if you contribute your salary data. Note that these tools provide a range and not a specific number. Use them as inputs and be consistent in your implementation.

Consider allocating larger option grants to employees joining earlier in the company’s journey and decrease grant amounts as the company nears exit. Consider equity refresh programs for top performers.

Think carefully about your level of transparency around compensation. Some companies choose to share salary bands with employees for their particular band. Those companies also advise to properly prepare for that level of transparency and to consider the pros and cons of the decision to share this level of detail as it relates to company culture and compensation philosophy.

Performance Metrics: Different roles require tailored metrics, such as efficiency metrics for engineering, time-to-fill for recruiting, quarterly bookings for sales. Bonuses can be tied to both company performance and individual contributions. Note that bonuses tied to individual performance are more precise in their application of bonus pool, but more administratively difficult to implement and keep bias-free. Consider bonuses tied to performance as a way to fill in compensation to reach 50th percentile benchmarks for cash comp. This protects flexibility in the compensation budget and allows the company to pay for performance.

3.      Recruiting Top Talent

Continuous Recruitment: Foster an Always-Be-Recruiting mindset. Proactively cultivate a talent pool through databases and social presence to track top candidates even when open roles are not currently available. Balance external searches with growing talent within the company. Effective workforce planning and utilizing HRBPs [human resources business partners] can help in managing internal transfers and filling key roles.

When recruiting talent from larger organizations, talented, ambitious candidates are often motivated by factors other than pay.  Larger scoped, more dynamic roles in early-stage companies can be much more appealing for the right type of prospect recruited out of larger, slower moving organizations. Consider advisory or consulting roles to try-before-you-buy and as a way to get a candidate comfortable making the jump to a “riskier” company.

Leadership teams will need to evolve quickly in a high growth company – e.g., Sales leadership often needs to expand from simply Sales to overall Revenue. Post sales leadership may need to evolve from tactical support and implementation to customer journey and expansion strategy. Regularly benchmark internal and external talent to ensure the organization has the best team for a given stage. Engage with top talent outside your company even before positions open to stay ahead in the talent game. This will help top leaders build a network of talent for when it’s time to recruit as well as help them understand how their current team stacks up relative to best-in-class talent in the market.

Consider Hiring Anywhere: Approaches vary based on company culture, type of work, and administrative capabilities. Consider regional differences and the importance of connections to headquarters when hiring remotely.

The Oregon Venture Fund’s Talent Workshop provided a treasure trove of insights for companies looking to enhance their talent and compensation strategies. From setting clear goals and effective feedback practices to designing transparent compensation structures and innovative recruiting methods, these best practices can significantly impact a startup’s success and growth rate.

We were impressed with the knowledge and insights from the People team leaders who joined the workshop and look forward to continuing to help build the People leader community in our region.