HomeCareersHappiness Should Be the Most Important KPI for Tech Employers

    Happiness Should Be the Most Important KPI for Tech Employers


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    BY Kate Smaje

    During economic downturns, businesses resort to muscle memory and do what they’ve done before. That often means budget cuts—and the deepest cuts commonly target technology investment and people.

    This time, however, things already feel very different. Businesses increasingly see their tech talent as a hard-won strategic investment, which they are reluctant to lose.

    New McKinsey & Company research discovered that 55 percent of 1,100 companies surveyed globally have found it challenging to hire key data and tech roles, such as data and software engineers, data architects, machine learning engineers, and data scientists. And a majority said it’s only getting harder, despite offering even more attractive compensation packages and flexible work models.

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    So, the real question for CEOs shouldn’t be how to cut tech costs, but how to retain and excite their best tech talent. Or, put simply: How do you make them happy?

    Speaking to McKinsey, the tech investor Marc Andreessen said businesses should “find the smartest technologist in the company and make them CEO.”

    That doesn’t mean CEOs that can’t code are out of a job—most business leaders have never been a data scientist or software engineer—but they need to learn to be real advocates and enablers of this finite group of the best technologists.

    Beyond the coffee and foosball tables of the early 2000s, happy tech talent will gravitate to cultures where CEOs give them an active role in the business, treating them as innovators, not order-takers.

    The days of IT departments focusing primarily on gathering requirements and managing vendors are over. Instead, they are shifting from an output-focused culture to one where outcomes are the language of success. In an outcome-focused culture, businesses empower their tech talent to solve real problems with measurable, high-impact outcomes, rather than dictate what they should build top-down.

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    Digital products drive a business forward and deliver sustainable and inclusive growth; projects have fixed budgets and timelines and are quickly disposed of when the going gets tough. You can’t build a successful product in a project management environment; tech talent burdened with that bureaucracy who feel they don’t have a seat at the business table will soon head toward the exit.

    If tech-talent happiness starts and ends with having a product culture, what if, in 2023, more CEOs were to think of themselves as chief product managers leading an outcome culture, in the same way that product managers think of themselves as “mini-CEOs”? This would create a working model that empowers small, cross-functional teams of brilliant (and happy!) engineers and designers with a clear mission to work on knotty problems with measurable outcomes that matter to—but are not suffocated by—the business or its processes. In other words: Let them focus on their craft.

    Retaining and making your tech talent successful has never mattered more. And a product culture is not just for tech companies; it’s also how more traditional companies start behaving like tech companies to compete. Almost all the big problems facing businesses today—whether it’s supply chain dislocation, stimulating customer demand, geopolitical tensions, or payment collection—will have technology-led answers. And when tech talent is configured correctly, the best solutions often come from the bottom up, not the top down. It will often be an engineer—with knowledge of the latest technologies and what’s actually feasible—who finds the way forward.

    That culture is critical if businesses want to not just retain talent, but move fast, create value, and be resilient in the face of the cacophony of headwinds.

    Tech talent expects clear targets and rapid feedback loops to know whether they are hitting the mark. In return, the best businesses in 2023 will make tech talent “happiness” a primary measure of success.
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    The Work-From-Anywhere War Is Beginning

    Kate Smaje is senior partner and global leader at McKinsey Digital.

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