Holding on to key staff is critical to business success
When companies go through major events, unexpected things can happen. Since X, formerly Twitter, was bought by Elon Musk, it has been plagued by a series of colossal glitches, such as the deletion of pre-2014 data and users being unable to log in or DM each other. X is a clear example that when staff attrition rises for any reason, be it through acquisition or simply better opportunities elsewhere, precious IP goes with them.
Any CEO spends a lot of time worrying about how to protect IP. For instance, when I was leading Kiwi Wealth through a sale process last year, we had spreadsheets naming people and their associated IP which we reported up to the board at every meeting. The success of the ultimate transaction can be attributed in part to our strong defence against flight risk and the subsequent loss of IP.
Kiwi firms can’t be complacent because many of our medium and large companies are held together with personal IP and goodwill; often inadequate legacy systems are compensated for by caring staff who make sure things happen when they should, despite systems not working optimally. If those people leave, unless CEOs and directors have planned for it well, it opens up knowledge gaps and vulnerabilities in the company. And papering over the cracks is not sustainable.
What should these leaders do to ensure everyone’s sleep quality? Value your people, protect them, and have them in the right roles – and when you know big changes are afoot, make it a daily project to manage and mitigate the IP flight risk so there isn’t a loss of business value or essential functions.
Then there is the business risk that emerges when senior leadership teams start moving in different and non-aligned directions. Left unchecked, teams like this in a medium to large company can start actively working against each other. An extreme yet tangible example is Formula 1 in 2020, when Ferrari had the best cars but two drivers with such mutual antipathy that one deliberately crashed into the other for a double DNF (Did Not Finish). It cost them a shot at finishing the race first and second.
The role of the CEO is to bring together the best people – talented, focused, motivated, and competitive – and create a culture where competitive spirit is directed towards common goals. Being clear about the purpose and vision, and making sure everyone understands them, is critical. The enemy of collective success is in-fighting or internal politics, where people are grappling for status, budget, or self-advancement at the expense of productivity and the overarching business goals.
As CEO, I was explicitly clear with everyone about what we were doing together. That didn’t mean there were no disagreements about where we should be spending money or what was the next service or product to deliver, but we did all genuinely want to build the business together. If 200 people work together to do something, it is exciting and powerful – very different to five groups of 40 all battling each other. If you’re so busy battling your colleagues, how can you battle your market competitors?
Our unity stood us in excellent stead through the sale of the business – which was much better in the end for everyone’s wellbeing and their professional prospects in the next era. On the plus side, I saw – and learned – more in two years as CEO than others might in five.
As a CEO, once you have the right people around you and the mission is clear, grant them autonomy and watch the magic happen. Some have likened senior roles to drinking from the fire hydrant non-stop, others to running a marathon at a sprint pace – and the only way to sustain that level of output is to delegate and to have an excellent support system. But it won’t work unless you empower people to do their best work. Yes, there will be disagreements about execution and priorities – but if the ultimate outcome they want is shared, these debates can be managed.
Given autonomy, accountability, and resources, you can stand out of the way of your senior leaders and watch the business gain a momentum of its own – taking some of the marathon-grade pressure off you and setting you up for more slumber time.
Rhiannon McKinnon is the founder of Cassiobury, a CEO consulting business for the changing workforce and leadership landscape. Rhiannon was the CEO of Kiwi Wealth, which sold Hatch for $40 million to FNZ in 2021, and itself was ultimately acquired by Fisher Funds for $310 million in 2022.
