Talent Management Talk #5 – The talent management that powered Outware’s rapid rise

In this edition of Talent Management Talk I chat with Eytan Lenko. Eytan is a Founder and Director at Outware Mobile, an 110-person mobile development company that builds apps for many of Australia’s biggest brands (ANZ, Google, Visa, AFL and Coles to name a few).

In this interview we discuss:

  • Eytan’s transition from software developer to director (0:22)
  • How Outware selects and develops technical staff as leaders (4:35)
  • Building high performance teams at Outware (5:59)
  • How Outware has developed its own version of agile performance management (8:25)
  • Outware’s vision, and what’s next for the company (11:14)

Subsequent to this interview being filmed, Outware was acquired by Melbourne IT in a transaction valuing the company at up to $67 million. That’s pretty impressive for a five-year-old company of just over 100 people!

You can watch the full 12-minute discussion or read the transcript below.

Jon Windust: 

Hello everybody, I’m here today with Eytan Lenko who is a director at a fast growing Australian start-up company called Outware Mobile. Outware are leaders in mobile software development. Welcome Eytan.

Eytan Lenko: 

Thank you.

The journey from developer to director of Outware

Jon Windust: 

Could you tell us a little bit about your journey? I understand you started as a software developer and now you’re leading a fast growing company of 110 people. What has that journey been like?

Eytan Lenko: 

Sure. I studied engineering at university and went on to become a software engineer. I guess from pretty early on in my career, it wasn’t so much about sitting at the computer and coding, it was also about that human element. So I moved into consulting. I did a lot of freelance and contract work where I was working closely with the people that I was building the software for: like trading systems, working with traders, that sort of thing.

Around 2009 we started Outware. I got together with a couple of old friends and we saw a big opportunity in terms of mobile. The iPhone was out. The app store had just opened up and we saw that there was a big opportunity. At that point everyone was talking about kind of gimmicky apps and fast apps.

But we could see that the apps were going to be a pretty serious thing in the corporate world. We thought if we could work to build a great team, a local team based in Australia that could build great apps and satisfy that need, then that would be a good niche to get into.

I remember sitting around early with the two guys. In the early days, we were doing the coding ourselves and we were doing everything ourselves. We kind of had this vision that we’d get to become a boutique company of maybe 10 people. We weren’t quite expecting at that point that we’d grow within five years to be over 100 people, in five years.

So in terms of my journey within the company, I started off programming when I needed to but also going out and pitching to customers. I really was just wearing lots of different hats.

What encouraged Outware to build a HR department?

Eytan Lenko: 

I think for the first two and a half to three years of the company, we had almost no staff turnover. Everyone was really involved and passionate working closely with the founders. We had a few people leave just because they were going to live overseas but basically there was effectively no turnover.

Then we kind of got to the point where we had a spate of people that had been with the company for a while, two or three or four of them leaving in a similar time. That was really a big moment for the directors. Obviously they’re people that we used to spend a lot of time with, and we don’t spend as much time with them anymore because the company’s grown and we’re so busy. We don’t go out for lunch with the team every day, so our finger is not on the pulse in terms of the culture and what people are doing and how people are feeling.

Also there was a whole lot of other stuff that we were interested in. As we were growing and we were winning bigger pieces of work, we needed to make sure that we had a more aligned skillset to what we were trying to achieve. Basically we were becoming more structured as a company and we needed to have a bit more structure in the way that we did our HR.

That was really kind of the trigger, was around making sure that we were doing something about retention and guaranteeing the continuation of our culture but also structuring HR a little bit better so that not every salary review is kind of ad-hoc, the negotiation with the director is done one-on-one, that we have pay scales and that sort of thing.

How did Outware create a unique culture?

Eytan Lenko: 

I remember when we were about 10-15 people, we all sat down and did one of those sessions where we work out what the values of Outware were…. what it means to be someone working at Outware. That was the point where we were really starting to accelerate growth. We could see we were going to have a lot of new people joining the team, and I guess we had this core early team that really wanted to put their stamp on what the culture of the company was going to be.

How do you identify potential leaders in a group of software developers?

Jon Windust: 

How do you go about identifying leaders within that group… we’re talking about people who like sitting there thinking about their code all day. How do you identify people within that group that actually want to be leaders and who are suitable to be leaders?

Eytan Lenko: 

It wasn’t a massive challenge for us I think by the nature of our work. Because it’s project based and there’s a lot of client interaction, it was pretty easy to see the developers that were really great technically but also the ones that were better at interacting with the clients and able to communicate what they were doing.

There are developers that they’ll encounter a problem and they’ll sit and write an email or a message or not do anything, and there are developers that will pick up the phone and have a conversation and try to work something out and be proactive on the communication front. I think those were the guys that kind of naturally became leaders in the development team.

I think that it was a bit of self-selection there as well. You put a bunch of developers together and somebody will generally come up as the lead and start organising people and taking the lead on stand-ups and things like that.

Purpose – the secret to building high performance teams

Jon Windust: 

Let’s move onto the subject of building high performing groups within the organisation. You are a high performing company and you’ve grown incredibly fast. Tell us about how you actually have gone about building those high performing groups.

Eytan Lenko: 

Yes, I think there are a few things. Obviously the key thing is really aligning everybody so they all understand where you’re going. I think any company, particularly a company that’s growing fast, obviously is going to have humps.

There are points of high pressure and points where it’s a bit more relaxed but to get people over the humps and to keep morale up and have everyone do it with good spirits, it’s really important they understand why, why they’re being asked to push hard and what the purpose is. Is it really just about this one project and this one client or is it about a bigger vision?

Jon Windust: 

Is there a bigger vision?

Eytan Lenko: 

When we were a smaller company, it was pretty easy. Because the directors were visible, you could talk to them, you could have lunch with them [and talk about the vision].

Then I think last year, we started getting a lot of feedback from the team that they were losing sight of what that vision was and why they were being asked to go in a particular way. Or people might disagree with why we were doing one project and not another project. They didn’t see how it all fitted together.

So we did a piece of work where we got everyone’s input around building a new vision for the company. I guess the directors had to kind of think do we do a big seminar and say, “This is Outware’s vision that we’ve come up with and these are the words and that’s what it is?”

We’ve got a very smart team of people and we just knew that we had to get buy-in from everyone. Everyone had to input into the vision.

Then the flipside of that was, when we started that process and we started with a survey, asking people questions about the way they think about the company and where they think it could go, there was feedback along the lines of “Don’t you guys know where we’re going? Why are you asking us?”

So it was finding that mix between this is the area we want to play in the market that we’re playing in but within that we’ll give you guys the freedom to think about where we want to go and why we want to do it. Obviously that was kind of a to and fro conversation.

How does agile software development works and how is it guiding best practice performance management?

Eytan Lenko: 

Software historically has been quite a messy business because you say, “I’m going to do this piece of work in six months,” and then six months later you discover you’re only half way through it, all of your assumptions are wrong and everyone’s upset and it’s a big mess.

I guess Agile and Scrum came out of a desire to make that whole process a lot more transparent and a lot more trackable, and also giving a lot more flexibility to kind of change path along the way. I think the idea is basically that you break the requirements of the project down into as small a chunk as possible – that’s called a story, and then you gather together a bunch of stories into a two week period of work that’s called a sprint or an iteration, and then your see how far they get through that. Then after a few sprints, you get a good idea of how many stories you can complete.

Each story has a level of complexity, is given a number of points, and you add those number of points up and you get a velocity for your team. What that means is that every two weeks you’ve got a check point, you do a showcase where you can show, “This is our progress,” because each story should be, from a user’s perspective, a functionally complete piece of work. You should be able to show that you’ve gone from there to there and get the feedback. At that stage if the product owners or the stakeholders aren’t happy they’ve got the opportunity to change direction a little bit going forward.

What that means for developers and feedback is that every day they’re kind of standing together, they’re talking about the work they’re going to do that day every two weeks, they’re having a review of their progress. You’re getting a constant feedback loop of how you’re going. You can see if one person’s kind of struggling with their stories and nobody else is, there’s a bit of feedback there about that person and how they’re facing the project. If you’ve got someone that’s kind of vocal and talking at stand-ups and getting really passionate about it, you’re getting a bit of feedback there about what they enjoy.

Jon Windust: 

It really narrows that whole loop. If I think of performance … if you think of how you can develop performance, there are really two key ingredients, I think. One is the expectations of setting out the expectations in the first place, and then that feedback mechanism or feedback loop, and that sort of continuous cycle.

Scrum sort of seems to be an almost perfect example of that because you’ve got the expectations come in the form of a story, in the form of a user’s story, that’s given to the developers so they know exactly what the expectations are, it’s a really well written expectation, and then everyday they get that feedback loop and every fortnight at the end of the sprint, they have the retrospectives to talk about process improvements and maybe even personal improvements.

What’s next for Outware?

Jon Windust:

It sounds like you’ve covered a lot of bases, in particular HR bases, in those first five years. What’s the next challenge for you?

Eytan Lenko: 

A few challenges now. We’re expanding our services to include strategy. That’s going to bring its own HR challenges as we kind of build up a new highly skilled team.

We’re also expanding geographically. We just recently opened an office in Sydney. We have a GM in Sydney that’s starting up. I think in terms of HR, one of our key challenges is going to make sure that our culture is represented in the new office that builds up in Sydney, and that the values and the way that they do things has a similar feel to the way it’s done in Melbourne. Obviously they’re kind of free to do stuff differently where it fits but we really want it to be a really good culture for the organisation.

Jon Windust: 

Look, it’s been a great discussion. I look forward to hearing in a year’s time how the business is growing.

Eytan Lenko: 

Great, cheers. Thanks for having me.

Jon Windust: 

Thanks Eytan.

This transcript has been edited slightly for readability.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.