Tackling employee engagement in a start-up: The case of DIGI Taken from Wilkinson, Dundon & Redman (2021)

A common characteristic for start-ups is that they are built around an exciting idea that seems too good to ignore, yet these newly established companies typically do not have the resources, reputation or results they need to attract and maintain the very best talent. Paradoxically, it is exactly these highly talented and engaged employees that they need to turn this idea into a successful company. Another important characteristic of start-ups is that, for them, time seems to be moving much faster than for all those around them. The pace is often incredible and while start-ups often struggle to stay afloat, the last thing they need is to have ‘half a person’ within the staff – that is, an employee who does not intrinsically. feel the need to go the extra mile and exert discretionary effort. In other words, they simply must have highly engaged employees, especially once the company starts to ramp up quickly and grow.

This particular start-up, DIGI (a pseudonym) is built around providing an online platform that connects companies and digital agencies, effectively providing an ideal marketplace for digital agencies to showcase their services, while providing companies with a myriad of options when searching for a digital agency that would be their perfect fit. DIGI is still a young company but has already gained huge recognition in the market, as well as having received several distinguished awards. DIGI has two founding members and even within its short existence, has already grown to fifteen full-time employees. Today, they have the investment they need to create a bright future, but a year ago the situation was entirely different.

As is the case with many start-ups, over a year ago, DIGI was primarily relying on the founders’ own funds as the main source of financing. Resources were tight, office space was limited and located in the basement of a warehouse. Additionally, the future of the company and its employees was highly uncertain. All staff were aware that the company could easily close within a week and they would be without work. After all, more than 90% of start-ups fail in their first year. At the same time, they were hopeful that they would ‘strike gold’.

Even with the lack of stability and reputation, the founders were able to attract highly motivated employees that were attracted by an intriguing idea, a great atmosphere, and the charismatic leaders. Every day the employees were diligently coming to the office, sharing their passion to help the business idea grow. There was a sense of camaraderie in the office and strong bonds were formed between the employees, supported by the founders’ attempts to make DIGI a cool and fun place to work. Because of the global focus of the business, they strived to recruit very diverse employees who came from all parts of the world yet living in the same city.

One of the challenges DIGI faced was ensuring the founders told a good (business) story which excited their prospective employees and created loyalty. However, they also needed to be away from the office much of the time in order to build the business. Moreover, most

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of their employees were young, usually recent graduates as these people are most likely to be excited by a challenge and also have the least to lose should the company fail. At the same time, young people can need good managers and a strong structure in place which typically start-ups do not have. The lack of management and structure at the firm resulted in employees losing their drive over time, worn down by the challenging work with few visible results on a daily basis. With no supervision, work time became ‘playtime’ as the camaraderie increased, all at the expense of the founders’ personal savings which were being poured into the company.

The founders were concerned as they could not be in two places at once – both at the office, making sure the work is done, and in the field, building the business. They soon made two strategic decisions. First, they started to increase the average age of their employees, focusing on more mature and independent individuals. Second, they realised that theyneeded to hire someone to manage DIGI’s daily operations, as well as an HR person that would handle their employees. These two new recruits were carefully hand-picked and tasked with taking care of the business while the founders were away. At the same time, the founders made a conscious decision to be more physically present in the office when they could. This allowed them to form strong relationships with their employees and ensure their enthusiasm and dedication to the business idea stayed visible and transferred to others.

Questions:

1. What would be your suggestion to DIGI’s founders about how to build a strong core of engaged employees with limitations such as lack of funds?
2. How could you ensure that employment engagement in DIGI and other start-ups would remain high, even through turbulent and uncertain times of intense growth?