By Chris Batsford
In today's knowledge economy, a company's most valuable asset isn't its technology or market position, it's its people. Yet many organisations fail to recognise that people strategies must evolve in lockstep with business growth. The approach that propels a startup to initial success can actively impede growth as the company scales, while the processes that stabilise a mature enterprise would stifle innovation in an early-stage venture.
When properly aligned with growth stage, people optimisation becomes a powerful driver of competitive advantage, often the difference between market leadership and irrelevance.
What Is People Optimisation and Why It Matters Strategically
People optimisation refers to the deliberate alignment of human capital strategies with business objectives to maximise organisational performance. It transcends traditional HR by focusing on how people drive business value rather than viewing employees as resources to be managed.
There are major business challenges that can arise from not being proactive in your people optimisation strategy, and you wouldn’t be alone if your business had suffered from quiet quitting, lack of psychological safety, communication black holes, culture erosion, hiring challenges, cross company alignment of objectives, a lack of accountability and visibility of performance. The list goes on.
Research confirms its strategic relevance: according to Gallup's 2023 State of the Global Workplace report, business units with high employee engagement achieve 23% higher profitability and 18% higher productivity compared to those with low engagement (Gallup, 2023). Similarly, McKinsey research found that companies in the top quartile for talent management practices outperform industry peers with 22% higher returns to shareholders (McKinsey & Company, 2022).
These performance differentials stem from several advantages:
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Intellectual capital acceleration: Optimised organisations develop knowledge assets more rapidly
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Execution velocity: Well-aligned teams implement changes more efficiently
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Adaptive capacity: Companies with optimised people strategies navigate market disruption more effectively
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Cultural differentiation: Distinctive organisational cultures become increasingly difficult for competitors to replicate
Stage 1: People Optimisation in Startups (1-50 Employees)
Startups face existential pressure to achieve product-market fit before capital depletes. People optimisation centres on assembling a founding team capable of navigating profound uncertainty while establishing preliminary operational structures.
At this stage organisations have a massive opportunity to build the strong foundations of your people optimisation strategy. As capital is limited, you will find not many organisations invest enough in people and struggle to scale beyond the visibility and control of the founder or CEO.
Early employees disproportionately impact startup trajectory. Research by CB Insights found that 23% of startup failures were attributed to having the wrong team composition (CB Insights, 2022). You are unlikely to be able to compete on salaries and benefits compared to the large corporates, although we have seen a significant shift in startups becoming more comp competitive in order to attract the best talent from the market. Organisations need to be strategic with their hiring and build a balanced blend of experience and exuberance.
Culture acts as the operating system determining how decisions get made when founders aren't present. If the mention of culture at this stage has got you thinking about socials, beanbags and foosball tables, then lets reframe, we are talking about how we communicate, make decisions, run meetings, raise problems, manage change, handle failure, share knowledge, solve conflict, reinforce positive behaviours and outlaw negative behaviour. Suddenly sound more important now?
At this stage agility is your super power, so whilst some clear frameworks and guidelines are required, the approach to your people strategy should be ‘light touch, high impact’.
Stage 2: People Optimisation During Scale-up (50-250 Employees)
Scale-ups face the challenge of maintaining startup energy while developing infrastructure capable of supporting rapid growth. The key tension becomes standardisation versus innovation.
The critical challenge isn't frontline recruitment but middle leadership development. A study by the Scale-Up Institute found that 84% of high-growth companies identified leadership development as a critical factor in successful scaling (Scale-Up Institute Annual Review, 2023).
According to research from the Harvard Business Review, companies that successfully scale create organisational structures that balance specialisation with cross-functional collaboration, resulting in 25% faster time-to-market for new initiatives (Harvard Business Review, 2022). Deliveroo created advantage during scale-up by implementing a modified matrix structure where functional expertise intersected with market-focused teams.
At this stage it is imperative to bring in processes and systems that allow you to scale, but without having so much bureaucracy that it stifles innovation. You need to have a pragmatic, ‘employee empowerment’ focus to your people strategy, one that enables them to be setup for success and serves their needs. Allow people to self serve and amend the toolkits as they need to, whether that is for L&D or performance management.
As the business scales, the incentives of the individuals within the business will be different, so your people strategy will need to recognise this company isn’t their baby, and think about your incentivisation strategy.
Stage 3: People Optimisation in Mature Organisations (250+ Employees)
Mature organisations must balance operational efficiency with continuous reinvention. People optimisation focuses on developing ambidextrous capability, maintaining excellence in core business while fostering innovation.
We are now at a stage of growth and development where it becomes more difficult to have a very personal approach to your people strategy, but you can start to leverage data to provide insights and guide policy and processes.
Some of the common pitfalls to be aware of at this stage include, allowing processes to become ends rather than means, capability stagnation among long-tenured employees and cultural complacency that blinds organisations to disruptive threats
At this stage you will have a dedicated people team and it is important to have a strong blend of strategic leaders who are commercially aligned to the interests of the business, along with your ‘ears on the ground’ who are your canaries in the coalmine and also those individuals who are great executers, who can follow concepts through to completion, bring people along on the journey, build trust within the organisation and ensure your people optimisation strategy remains an ‘enabling’ function rather than having your team glazing over through another engagement survey.
Can I just copy and paste the Netflix people optimisation playbook?
Oh, if only it were that simple! Netflix's famous "freedom and responsibility" culture might be the darling of business school case studies, but dropping it into your organisation would be like trying to transplant a tropical plant into Arctic soil.
What makes Netflix's approach powerful isn't their specific practices but rather how perfectly aligned those practices are with their business strategy, talent marketplace, and growth stage. By all means, learn from Netflix, but remember: the best people playbook is the one tailored specifically to your organisation's DNA.
Conclusion: People Optimisation as Strategic Imperative
People optimisation isn't a discrete function but a strategic capability that must evolve with organisational growth. The approaches that drive advantage in startups become limiting factors during scale-up, while the systems that enable mature organisations would crush entrepreneurial ventures.
As markets continue to accelerate and business models face continuous disruption, this strategic approach to people optimisation isn't merely advantageous, it's existential. The companies that will thrive won't be those with the strongest technology or most efficient operations, but those that most effectively optimise their most fundamental resource: human potential.
About the author:
Chris Batsford, Partner
Chris specialises in supporting scaling businesses, bringing expertise across executive search, investment, and leadership. With 15 years in Executive Search, experience as VP of People at an early-stage SaaS company, and a talent role at a VC fund, he understands the challenges of investor-backed growth in the UK, US, and EMEA.
Having advised and been part of senior leadership teams across Tech & Digital sectors, Chris helps businesses navigate scaling complexities—from talent acquisition to building structures that drive long-term success. Passionate about people operations and high-performance cultures, he works with companies to implement strategies that empower teams and sustain growth.
