The Importance of Human Capital for Fast GrowthHENRY SICHEL, BOCCONI ALUMNUS AND FOUNDER OF THE DIGITAL AGENCY CAFFEINA, EXPLAINS HOW MANAGING HUMAN RESOURCES WAS CRUCIAL FOR THEIR TRANSITION FROM STARTUP TO ACCOMPLISHED COMPANY
The dizzying growth of newly formed companies is one of the hallmarks of the digital economy. It just takes a valid business idea and a startup can scale up in a very short time, often forcing fledgling entrepreneurs to take an accelerated course in business management in order to manage rapid growth. Preserving organizational harmony as size grows, by hiring the right quantity and quality of human resources, is therefore an essential strategic factor to help a startup become a true company. Henry Sichel, an entrepreneur in his early 30s, founded the creative agency Caffeina with two fellow Bocconi grads in 2011, a fast-growth enterprise often cited as a model for Italian startups. For three years now, the company’s been a stable presence in the FT 1000 rankings and is now a limited-liability corporation having three Italian offices (Parma, Milan and Rome) and 120 employees, 15 of whom were hired in the first quarter of 2019.
➜ Thinking of your past as startup, what were your levers to attract quality resources when you didn’t yet have a history, a portfolio, a brand..?
In reality, the recruiting process has not changed much; from the start, we talked values , rather than company roles or compensation package. Then like now, we tried to unite people who shared an orientation to self-realization, an appetite for change, and the ability to face challenges. With them we made a pact, which also bound us to remain faithful to such values and achieve them in business and society. The human capital of Caffeina is managed and grows mainly by following two principles: make sure that people feel part of something larger, and that career progression is straightforward, with continuous feedback from both sides.
➜ That of digital agencies is a sector where turnover is high and the added creative value brought by individuals is significant. How can the exit of apparently irreplaceable human resources be managed?
In fact, in our industry the market is competitive, dynamic, effervescent. We have always tried to emphasize our diversity, which stems from the desire to combine the flexibility, knowledge of the communication environment, and propensity for change typical of the agency, with the organization and orientation to the customer typical of the corporation. When an important person decides to leave the company, it is crucial to make sure that s/he does not do it out of disaffection, but as a moment of his/her career development so that s/he can do an effective handover of tasks to the successor, who can be recruited either internally or externally.
➜ Even the arrival of an external person, perhaps for a top position, can be cause for disruption. How to do you act so that the new entry does not affect the expectations and motivations of existing personnel?
Those who are selected to take top positions are chosen not only for their technical skills, but also for their managerial skills, namely the ability to manage teams and individuals. If they prove able to do so, internal resources will only be happier because they will work better, with clearer goals and benefit everyone. The role of the company at this juncture is to give all the right incentives, by selecting management and at the same time clarifying with working teams that the entry of an external manager is not a brake on their growth but, on the contrary, a catalyst will make their talent bloom.
➜ Agencies often rely heavily on temporary work, consultancies, flexible job contracts. But you have decided to hire people long term to fuel your growth. How important is for an emerging company to provide stable jobs?
Here we return to the company’s DNA since our foundation. Job precarity is incompatible with our idea of what a business, a life and a career should be, something we want to communicate internally first of all. It is impossible to build anything unless there is a stable social fabric. The cost of labor weighs heavily on all companies, and for small ones even more so. However we rather see employees as an asset, since it’s the people we employ that hold all of the company’s potential. It is the management's job to ensure that such potential is translated into actual projects on the ground that change the status quo, that affect the reality of customers, whether they are market leaders or market dreamers.
➜ Young agency in a dynamic industry. Does this mean there’s only place for young people? When would you rather choose the experience that comes with a more mature person?
The average age in Caffeina is 30, thus low, but not very low, which is the typical mean age of startups. Personally and as a company, we fit the profile of millennials. In my view, in order to achieve a growth path, professionals who bring experience and background must necessarily be sought. And this is truer in our industry than in others, because the current success of the omnichannel agency model lies in the ability to propose integrated projects, some of which are not even born digital, so that several different competences must be brought on board. It is a generational melting pot that enriches our organization, and it’s also an important step to combine the attractiveness of an agency with that of a company.
by Emanuele Elli
Translated by Alex Foti