Do it like Unis
How organizations who are perceived as non profit like the universities manage to survive? How universities manage people differently than other organizations and why this can be very appealing or not at all to different kinds of personalities? Are only some of the questions which inspired the following blog post but probably it is to blame the Human Resources Management course, I took at the Business School of the University of Edinburgh while I was doing my MSc Artificial Intelligence.
When the average person thinks of a university, he thinks also of the word good. Education is perceived from all societies, all over the world as something good, and it would be extremely difficult for someone to make an argument against that. When a new university is launched, it is perceived immediately as a good thing from any community.
This, business-wise, is a huge advantage! Imagine if you launched a tech startup company and everybody was saying wow this new app is a good thing! Maybe would not get you new customers by magic but it would certainly be a strong booster.
The lesson here is, before launching any company, consider the whole community and how your brand is being perceived by the majority of people. Are you just making money for some people or are you the one who brings value to their lives. The latter is more difficult but it goes a long way. You might even get funding from the government itself, who knows!
What about recruiting? Universities are known to gather the smartest people in the world, and this gets more valid the higher the ranking of the university is. But note that “smarter” refers to the particular science that they specialize in, and it does not refer to overall intelligence and skills in a wide range. The advantage of highly specialized people with unique skills is that they can do things than none of the employees of an average company can do. But do you really want or could have these kind of people in your company? We need to see what attracts people with certain special skills of following the career to become professors in the first place.
Inside academic community you will hear more often than not the phrase “..in the real world..” because indeed universities have created a cocoon to protect their own, which in fact is necessary for doing research. If you have any kind of insecurity about your economic future is extremely hard to concentrate on your experiments or be inspired and have new ideas. And these professors most of the time they do not want to belong in the private sector where the fierce competition demands to steer your thoughts from what you intuitively thinks that matters into how to make more money for the company.
So let’s say that you want to have some research apart from development in your company. From the pool of available people you either have those who want to do their own research or those who allow themselves to be managed. If you want to do your own research, have the authority to lead your research to the path that you feel makes more sense to you then universities are the perfect place for you. These people cannot easily be managed so maybe even all the money of the world would not bring them inside your company and even if they did, you still might have them deal with their own stuff. On the other hand people who are more manageable they would still want and need economic security to be innovative. In practice we have seen only Google-size companies to be able and make such an offer. This more directed research brings usually better and faster results faster but the salaries are usually of six figures and it costs a lot for a medium size company to employ this kind of manpower.
Therefore universities provide much lower salaries and still acquire really smart people at the expense that no strict management can be applied to them. But universities do not care to build a product since they are on a different space, on another dimension than private sector. They do not compete with it but they still thrive.
There are some very useful lessons for businesses from how universities work.
First of all you need to build a team of people who share the same vision. Recall that smart people cannot easily be managed so your job is to actually locate and acquire people who do share this vision.
Secondly, and ideally, the vision has to come from the team itself. If you think as the head of the company that you will set the vision and everyone else will magically follow you are heading for a failure or for a not so great success. Recall that the smart people we are talking about are working by intrinsic motives, you cannot enforce your vision to them.
Lastly try to be competent but do not try to compete only for the sake of winning. Instead try to create complementary products and always differentiate yourself. It is understandable, how awesome it is, to show off how you obtained a large market share from some big players in the industry but how far is this motive going to get you, really? Recall that by setting a great vision you managed to gather the best people in the world so now it is time to build unique products and/or services and work alongside others and not against them.
However, recall that you need always the cash flowing in, because of the economic security that your great team requires. How much financial security is the key, cannot be stressed enough. Your company might be a couple of years old but universities could be 100 or 500 years old. If you wanted to be inside an organization that knows how to survive in the long run, which one would you choose? This, as a company, is your competition on recruiting! You need to show that your company is more secure and overall better than a university in order to be preferred by people with unique skills.
The next category that universities do well is manage high quality but low salary employees and these are the phd students and research assistants. They literally get a fifth of the salary they would get from working to a company in the private sector. On the positive side they can work on their own rhythm, not slower, but there is flexibility on which hour of the day or which day of the week to slow down and when to speed up.
The university’s way of acquiring phd students is that it uses small barriers on taking them. As long as you are good enough for the university standards and a funding is available you could get a paid phd position somewhere. Note that we are not comparing the availability of the places because this would be a comparison without any useful conclusions. Instead let’s concentrate on the recruitment process.
Going from being a master student to a phd position is an easier process for a student than going to work in the private sector. Why? Because more or less the student knows what to expect. There is no cultural shock and minimal adaptation is required to the culture of a new organization. And this is valid by working to any university because to some extent there is shared culture among universities worldwide. So to a postgraduate student going to a phd position it feels like a natural next step.
Again there are important lessons for companies. Why the phd position should be the natural next step for a student? Could you make your own company be this natural next step? Make yourself known to the students. Give presentations to the university. Provide some funding or other resources to the university so that you are mentioned frequently in the university community. Create engaging competitions for the students of the university so that students will not compete for the higher grade but to compete to win the competition of your company.
More importantly, do some headhunting yourself instead of spending resources for endless tests and interviews that will lead to a single hire. The interview is only useful for the cultural fit at this point. The least thing that a student needs is yet another test. Students already have had enough tests in the university. It is your role as a company to find the university with the best students and be able to translate their grades into actual skills.
Keep it rolling, hire five, four or at least three of the best scientists that you need on a yearly basis with the extra filter to have a good cultural fit and share the vision with the rest. This way you will be the reputation that the next best thing for a student is not Google, is not a phd, but is your company.
In addition give support to newcomers as they enter the company, do not break the psychological contract to them. Ease them in, in the culture of the company instead of forcing it from day one.
Finally be able to present successful stories of people who started in the company after university and their career has skyrocketed, and/or they have a good salary to have a family, or any other things that people value. Share those stories and win good employees.
My last and most favorite thing of how universities manage people are undergraduate and postgraduate students.
The tricky part here, when comparing with the private sector is that both undergraduate and postgraduate students are not working and not sustained by the university but usually the family or some other scholarship takes care of the basic needs of the students.
If you think about it, university receives a large amount of people without have them pass through excruciating interviews and still manage to get the best out of them.
The university uses zero financial motives to achieve them and the private sector should learn from this example, because as it has been proven more often than not, motivation when based on financial terms is suddenly gone when the extra bonus salary is removed.
It is worth noting the various things that the university environment provides to keep students motivated.
First of all what happens inside the university is perceived as important either seen from an egoistic or an altruistic perspective. Either you work for the university because it will have an important impact on your personal future career or because it can have a great impact on humanity overall, respectively. The lesson here is that companies should explain to their employees why the projects of the company are important instead of just ordering them to implement them.
Another situation that the students found themselves into is to do a presentation on top of the actual work that they need to do. The students are able to present and be proud of their work. This is extremely beneficial since the rest of the employees get to learn more about a current project or a technology and moreover the transparency among departments of the company is increased. In practice it is a sign of bad management if you experience small to zero transparency as an employee because it means that none of the employees learn to be accountable for their work. All of this is based around a more general idea of building competition around actual achievements. Avoid the hippo (highest paid person’s opinion) effect as the plague! Employees will want to be part of the better team even if no financial rewards are provided because they inherently want to be good at what they are doing. It is your job as a company to foster this environment and not let anybody try to hide their poor achievements.
Being part of the university is belonging to a community of people and sharing with them the prestigious role of being people who will be able to bring the added value, create and offer in comparison to doing a traditional job that is contributing the minimum to the community. Even if this sense of superiority is superficial it still is enough to make the average iq person to push himself to the limits and find a way to accomplish difficult for him tasks and assignments, merely to belong and dream of a better future.
Indeed the prospects of a better future, the hope for a future aligned with high expectations, is extremely important to feed the motivation for going the extra mile and doing extra work. While on the contrary, you see companies of the private sector to break the psychological contract with employees who have graduate from university by offering them mundane and boring jobs or offering them jobs that will get them away from a rising career. The lesson here is that if you offer variety and high interest to the job and especially by offering hope for a better future will have as a return extra effort from the employees and getting the best out of them without any sacrifices on the budget of the company.
If you nurture all of the above the benefit will be two-fold. You will have found the golden edge that results in a better company built on stronger values which propagates to the market and attracts more and better customers.