According to PwC’s 18th CEO survey, a shortage of talent is fuelling a wave of M&A activity, with one-in-four deals now driven by talent acquisition.
This is particularly evident in the digital space where the demand for talent has resulted in many high-profile acquisitions.
But, is it better to build a team or buy one?
Build a team or buy one?
There are two stories here. Firstly; there is the acquisition of talent; through the acquiring of a business with the right people and infrastructure already in place. Secondly, there is the need to acquire digital talent that may or may not already be in the tech sector and hence requires an open-minded approach to find it.
It’s hard to know where to look. The best talent has diverse experience and does not fit the usual brief. Our clients need to consider whether they can source and pipeline the right talent through networking and building relationships, or alternatively, to buy in talent wholesale through an acquisition.
Building a team
Focus on the customer journey: Very few companies have all their routes to the customer joined up. The successful Head of Digital brings together online and offline channels in a seamless proposition for the customer. The strongest digital candidates know how to look after the channels, not the actual technology.
According to PwC’s report, “creating the personalised and ongoing experiences that are increasingly in demand requires a full view of the customer and all their relationships with the company. It requires and unprecedented level of customisation, responsiveness and innovation.”
Organisations that have a strong technology proposition are not necessarily the places to find digital talent - which is not about the technology at all. Organisations that are strong on digital are focused on the bringing together of all routes to the customer.
Consider cross-sector: When we have an assignment to identify senior digital talent, it does require some work in terms of getting buy-in at the top level, where there are typically very few technical and digital experts.
We encourage our clients to think more broadly and make courageous hires if we think the business is ready for it. For example, outside of the technology and financial services sectors, some of the big accountancy firms have impressively integrated their digital strategies and some have been hiring via social and digital for years.
Conversely, we have to balance strategic focus with the more conservative leaders. In one of our multi-national clients, the US headquarters is open to courageous hires from a leading-edge organisation like Facebook, but the regional leaders in Europe and APAC are less comfortable with this and expect to see a shortlist from their closest competitors in technology.
Decide where digital will sit: During our work with one global bank that was seeking a Head of Digital, the brief evolved as the organisation opened up discussions about what they really needed from the role. As a new role for the majority of clients, senior leaders must give careful consideration to where it sits, and how much influence the role is allowed.
In senior executive teams it is common to find that few, or none, have awareness of the digital world and of related topics like cyber security for example. This level of understanding can make it difficult for us to help elevate top digital talent to the executive leadership level.
As Michael Dell, Chairman and Chief Executive of Dell Inc. said in the recent PwC report, “What you really have to do is to re-think the problem and say, ‘Now we have all these new tools and new techniques, how can we solve the problem in a fundamentally different way?’”
The Head of Digital is a strategic role. It can flounder if is pigeon-holed in marketing or even worse, IT. Make it a strategic hire.
Buying a team
Think out-of sector: At Armstrong Craven we do sometimes advise companies on acquisitions, and help them research organisations that provide a good target. We often find the best fit is out-of sector, and in the past our clients have shortcut their way to digital talent through buying a digital agency. This approach also enables clients whose brand is not known for digital to move quickly in terms of talent acquisition.
Learn from examples: Consider Morrisons, the UK supermarket chain that was without an online shopping proposition. Rather than build from the ground up, the acquisition of Kiddicare for £70M secured Morrisons the infrastructure to deliver an online offering, and more importantly, the people to make it happen.
Although not without its problems, Waitrose and Ocado is another example. Waitrose decided to buy into a partnership rather than build from scratch. This approach has another advantage in that it allows an organisation gain access to a talent pool it might not ordinarily attract. Many retail brands struggle to articulate themselves as a great place to work for tech talent.
PwC’s research found that along with increasing a company’s portfolio, acquiring a brand, and growing its footprint, acquiring the people associated with a company is increasingly a reason for acquisition.
We believe this trend is set to continue, and that the companies that acquire the best talent, either through building or buying a team, will be those that make the leap to fully embrace and exploit digital.
You can’t build this team half-heartedly. Significant investment in the digital strategy is required for it to deliver results.
What’s interesting about digital is that making Head of Digital a strategic role, and creating a fully aligned, joined-up digital strategy, does not necessarily correlate with an organisation's size, or the history of a company. There are opportunities aplenty for companies that jump in to differentiate themselves in their market to gain competitive advantage.Back to blog