Talent Market Fit: What is it?
Updated: Jun 16
Companies love to obsess over Product Market Fit (PMF). I want them to obsess over Talent Market Fit (TMF), too.
So what is TMF? Put most simply: if PMF fuels the why for growth, then TMF fuels the how. TMF is a codification of roles, responsibilities, & playbooks for how positions & functions within an organization are designed to drive value at an organization.
In short, when companies find Talent Market Fit, they can accurately forecast value outputs based on talent inputs because predictability of value (how risk is minimized & opportunity is maximized) can be attributed to a clear articulation of roles, responsibilities, & playbooks.
I anticipate an output of Y when I hire candidate X.
Therefore, when TMF is not established, then the potential variance of value is quite high, as there is no clear articulation of roles, responsibilities, & playbooks to both minimize risk & maximize opportunity. As such, new hires onboarded into roles in which there is no clear TMF are "building the plane while they fly it," rapidly iterating on tradeoffs and balancing roles from both strategy & execution lenses.
When organizations do not have Talent Market Fit, then they can't accurately predict value outputs based on talent inputs. Rather, they decision along:
If we hire the right rockstar for this, then the value they provide could be astronomically good for the business.
Or
The wrong hire for this could be incredibly detrimental to the business.
Think about the journey of establishing TMF as a road trip. When TMF is established, not only does one have a clear idea of the starting point and destination, but one also has a turn-by-turn guide for how to get from Point A to Point B. Sure, there may be some hiccups along the way (increased traffic, unforeseen road construction, accidents, etc), but some quick rerouting by the GPS gets one back on track and to the destination without too much time-loss.
When TMF is not established, then it's like taking a road trip in which only the starting point & destination are clear... and in some cases, it may be unclear on what the exact destination will be. Complicating the situation is the fact that the route for how to get from Point A to Point B is also ambiguous, as there are multiple options for how to do such. Finally, the cherry on top is that it's uncertain as to what the best mode of transport should be for the journey.
For those like me who grew up playing Oregon Trail, not having TMF is the equivalent to trying to decide what to do when crossing a river but not knowing enough about the different options: ford, caulk & float, pay a ferry, or wait for the water levels to drop.
Choosing the right option proved to be greatly beneficial. Choosing the wrong option could derail a whole pilgrimage.
Choosing the Right Engine for the Journey
Depending on the journey and what a company is looking to do will influence whether one will need to rely on a GPS and a specific type of engine for the journey.
To better illustrate this idea, think of Product Market Fit as the GPS and Talent Market Fit as the engine.
When a company has PMF, then it has a clear idea of its ICP, the ICP's pain points, how its solution solves the ICP's pain points, and how to articulate its value for why its solution is the ICP's best option for solving those pain points at the price-point that the ICP is willing to pay. And when one has PMF, it's relatively easy to work backwards from goals to resourcing arrays to understand what talent phenotypes one needs in order to fuel company growth.
Sometimes this results in a company needing a Toyota Camry, as it is looking for something low cost but reliable for getting to its destination. Other times this results in a company needing a high-end sports car, as it is looking to get to that destination a little bit faster while also recognizing that it will have to pay a premium for doing such. Regardless of what the company needs, though, it is able to predict the value output based on the talent input (e.g. trading the higher speed of a sports car for the lower cost of a Camry).
Transformative companies typically do not have TMF.
Transformative companies include those who are:
Transformative of themselves (orgs undergoing transformative change)
Transformative of others (PE firms)
Transformative of functions and/or industries (startups)
Transformative companies also operate under constrained timelines because we live in a world of finitude.
Orgs undergoing transformative change have finite time windows for when they want their transformations to be completed
PE firms have finite holding periods
Startups have finite resourcing (e.g. limited cash runway) to prove out milestones
As such, transformative companies need high-performance engines to drive significant value under these constrained timelines.
Think: rockets, not cars.
Not only do they have to get it right, but they have to do it quickly. In some ways, hiring for Talent Market Fit is kind of like rocket science.
In theory, the ideal rocket equation is fairly simple.
Ideal Rocket Equation
To calculate the maximum change in velocity of a rocket (the total speed it can gain, which is also known as ΔV or "Delta-V"), you take:
Equivalent exhaust velocity (the speed at which gas is expelled from the engine), or v e , and
Multiply it by the natural log of your initial mass of the total rocket (mass of empty rocket + mass of rocket fuel), or m 0 , divided by the final total mass of the rocket (the mass of the rocket after all propellant is burned), or m f .
Rocket Mass Ratio
What's interesting about the ideal rocket equation is that the required mass ratio of a rocket grows exponentially with the desired change in velocity.
In other words, faster change = more fuel.
This is why there we have multistage rockets, in which each launch stage features its own engines & propellant. As the rocket flies from one stage to the next, it sheds the weight of empty fuel tanks and spent engines to reach extreme speeds & altitudes.
In reality, rocket science is super hard.
It's why we're not all astronauts. It's also why we have really smart people who perfect the launch plans that incorporate orbital mechanics, weather conditions, launch windows, range availability, technical readiness... and so much more.
And despite these launch plans being perfected on paper, things still go wrong (e.g. the toilet malfunction on the recently-completed Artemis 2 mission).
So what do rocket launches have to do with Talent Market Fit?
Roles That Establish TMF Aren't Designed to Be There Forever
If you're still with me, I'm grateful for that. And if your eyes are glazing over trying to track the math in that last section, then here is my guarantee to you: no more math moving forward.
I promise.
But lets draw some parallels.
Transformative Companies
Transformative companies do ambitious things
The greater a desired change in velocity (the bigger or faster the transformation), the more fuel one needs
As transformations mature, companies shed the weight of empty & spent talent that are no longer contributing value for those transformations
Despite all the planning in the world, things will go awry
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Space Companies
Space companies do ambitious launches
The greater a desired change in velocity, the more fuel a ship needs. Remember, rocket mass ratio is exponential
As rockets fly from one stage to the next, they shed the weight of empty fuel tanks & spent engines
Despite all the planning in the world, things will go awry
Roles that help establish Talent Market Fit are not designed to be a part of a company forever. Think of Chiefs of Staff and Operating Partners, for example.
Chiefs of Staff should be a 2-3 year commitment within a company (Andreessen Horowitz has some great perspectives on this here), helping get the company to the next stage of growth. Operating Partners share a similar time commitment within the PortCos whom they serve, also helping get those PortCos to critical value-inflection points over the course of a holding period.
Both roles are hard to define and can be dynamic from scenario to scenario, yet both can be critical value creators for fueling a company's Delta-V.
As a company goes through its journey of corporate build, both roles also help mature a company from its Build Stage to its Operate Stage.
Talent Market Fit at Various Stages of Corporate Build
Talent Market Fit is Inversely Correlated to the 3 Stages of Corporate Build
The earlier a company is in its (re)build journey, the less likely it is to have TMF. The later a company is in its (re)build journey, the more likely it is to have TMF.
Build
Potential variance in value is high & TMF is low. Teams may experience high levels of variance (both positive & negative) due to rapidly iterating on tradeoffs.
Optimize
Potential variance in value is medium & TMF is medium. Variance starts to normalize due to relentless optimization of what is working & de-prioritization of what is not working.
Operate
Potential variance in value is low & TMF is high. Variance is both minimal & predictable due to a clear articulation of roles, responsibilities, & playbooks.
As a company navigates its build journey to mature into "operating mode," it should -- like a rocket -- shed the now-empty & spent engines that helped get it to its new velocity.
To be clear: this doesn't necessarily mean that this talent should be removed from the company altogether. But the capacity in which that talent had once operated (e.g. Chief of Staff, Operating Partner) should no longer be needed. As such, if the talent were to stay with the company, then it would be in a new role. Examples include:
A Chief of Staff moving into a functionally-aligned role, such as a Head of Sales Ops or Director of FP&A
An Operating Partner moving into a CxO or functional-head role, such as CFO or VP of Operations
And in a similar vein, if the talent were to move on from that company, then it may be as a Chief of Staff at a new company or an Operating Partner at another one of the PE firm's PortCos.
Final Thoughts
If Product Market Fit fuels the why for an organization's growth, then Talent Market Fit fuels the how. It is when companies find TMF that they can accurately forecast value outputs based on talent inputs because predictability of value can be attributed to a clear articulation of roles, responsibilities, & playbooks.
In theory, the ideal Talent Market Fit equation is fairly simple.
Right Hires + Right Time = Growth Accelerators
In reality, finding Talent Market Fit can be super hard.
Despite it being hard, though, finding TMF doesn't have to be rocket science. Recognizing that value-creating talent may be phase-appropriate to a transformation journey can help determine when it is time for that talent to phase out of the company.
It is also important to recognize that despite relentless planning, things will go wrong. Having talent that can be adaptable (e.g. Christina Koch acting as both Mission Specialist & "space plumber" on the Artemis 2 mission) is important, and assessing for that adaptability is critical for finding TMF.
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