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The War For Talent

post # 363 — April 27, 2007 — a Managing post

Apart from his own blog, Bob Sutton has a blog on the Harvard Business School Online Site

(Actually, he co-hosts other blogs as well, but let’s not go there because I’m intimidated enough already!)

On the HBS site, he announces that “The War For Talent Is Back” (did it go away?) and offers five lessons for discussion:

  1. Superstars are overrated.
  2. Great systems are more important than great people.
  3. Create smaller rather than larger pay differences between “star” employees and everyone else.
  4. The law of crappy people (great people will hire other great people, but mediocre people will hire even worse people because they are threatened by competent people) is probably a myth.
  5. The no asshole rule helps.

Here are some of my lessons / propositions for winning the war for talent:

  1. In hiring, never let the pursuit of volume get in the way of maintaining the highest possible standards.
  2. People want the opportunity to learn and grow: you must actively work to provide a variety of stretching, challenging experiences.
  3. Standards of people supervision and management are as important as standards of product or service quality: they should be monitored and enforced in the same way.
  4. Firms that try to win by hiring pre-existing, already-formed talent will never do as well as firms that are skilled in building talented people.
  5. Talent is over-rated: character and energy count for more.

***

What are some of your lessons for winning the war for talent?

18 Comments

Charles H. Green said:

If the “war for talent” is indeed back, then it behooves us all to read what went wrong the first time ’round. Not that he needs the publicity, but Malcolm Gladwell had a most excellent piece on this, at http://gladwell.com/2002/2002_07_22_a_talent.htm

What he says is very similar to your point about talent being over-rated. He connects the dots between the celebration of “talent” at institutions like Harvard Business School and McKinsey to its logical conclusion, Enron. It’s one of his best columns.

Those cautions are even more important now, because the world is getting that much more networked. Increasingly, the network is the talent; the group is the star; the ability to play nicely in the sandbox with others is getting more strategically critical.

“Talent”–unless it comes to mean the talent for collaboration with others–is not as useful as it once was. There aren’t as many job postings for the Lone Ranger as there once were, and that’s not a bad thing.

posted on April 27, 2007

Liz Zitzow said:

As a former “talent” for 19 years (now a sole practitioner), I can tell you what caused me to uproot. I’ve only worked for three employers before starting my own company, with stints of 3 yrs, 11 yrs, and 5 yrs. The main thing that caused me to leave each position was lack of personal respect, in terms of advancement and trust. In one case, it was solely the lack of trust, in the other two it was the lack of trust that I could handle the advancement I had requested. In each case, I moved on to a position which allowed me the advancement and trust I wanted.

posted on April 27, 2007

Ann Bares said:

Interesting post and lessons. As a compensation consultant, I couldn’t help but be drawn to Lesson #3 – which suggests creating smaller pay differences between “stars” and everyone else.

I agree with Charles that part of the issue here is how we define “stardom”, and we certainly should have learned by now that allowing all reward dollars to funnel to the few high-ego “rock stars” takes us down a dangerous path. But (being who I am and doing what I do) I also hate to see all “pay for performance” efforts maligned based on the results of these bad decisions – and based on the differences that exist between the highest and lowest paid people in an organization (which are not necessarily the result of performance results).

I guess I still believe there is merit in merit pay.

I have posted my own discussion on this specific “lesson”, as it should prompt some thinking among those who design and manage reward programs.

posted on April 27, 2007

Heidi Ehlers said:

Great post, very timely, thank you David. Here are some of the lessons I’ve learned:

1. The conversation surrounding talent can have a positive or detrimental impact of all other aspects of your brand, but it is completely within a company’s control to choose which of the two outcomes they prefer and behave accordingly.

2. Talent hired in the absense of a standard, becomes an emotional, tactical conversation even with the best intentions. In fact, University of Toronto’s department of organizational behavour concluded that a structured interview against a pre-determined standard has EIGHT TIMES the predictive power of the more frequently used approach of what I call the ‘go with the flow’ interview.

3. While talent attraction should be approached strategically, when approached tactically, salary costs escalate, salary standards are not adhered to throwing the equilibrium for existing talent out of balance, and retention is in jeopardy.

4. Everyone wants to be on the team that everyone wants to be on.

5. Top loading hiring (which is piling stars on top of a weak team) is never as effective as Weakest Link Hiring. The metaphor I often use is a group of skiers. They always move at the speed of the weakest skier. Hire better skiers and remove the slow skiers to increase the overall performance of the entire team. Nothing worse than being the fastest skier shivering in the cold waiting for everyone to catch up

Great post, I could go on and on, but those are the ones that really make my pulse race.

Oh and finally….We all KNOW this. As you said in your “Fat Smoker” podcast. Have the ‘courage’ to make this a priority and start!

posted on April 27, 2007

Wally Bock said:

There are two dangerous things that I’ve observed amongst the War for Talent ideas. First is the idea that talent is some kind of undifferentiated value. Talent will only work for your company if you recruit the talent that will fit your culture.

Superstars are over-rated, but systems are under-rated. There’s plent of research pointing to the fact that even the most talented folks can’t do great work in a lousy system.

Teams don’t get talked about much in War for Talent, but business is a team sport. War for Talent recommends forced ranking procedures and reward systems that are toxic to good teams.

There’s more in a post on my blog titled “A War for Talent mindset may be hazardous to your results.”

posted on April 27, 2007

Stuart Cross said:

David

A few thoughts from my experience….

  • The role of the line manager is critical to maximising company performance – this is where the war for talent is really won and lost
  • Unfortunately, whilst many managers are technically gifted and educated, they do not always have the appropriate people management skills or receive the necessary people management training/development
  • A key role of the line manager is to address people performance issues quickly, otherwise it affects the rest of the team – I love Heidi’s analogy of slow and fast skiers
  • I agree with Bob Sutton’s view on pay to the extent that working for organisations where people are challenged, supported and actively engaged to “make their mark” seems to be more important than pay

Regards, Stuart

posted on April 27, 2007

Bob Sutton said:

David and everyone else,

Wonderful comments and I always admire your wisdom. I want to make to clarification points about the evidence on merit pay, as I understand it. Yes, it is very hard to make it work, and in some settings — schoolteachers are a good example — so many things are outside of the person’s control, it likely doesn’t work.

But the research on pay compression doesn’t show that merit pay doesn’t work, as I read it. At least, for many of the studies, it shows that in settings where there is merit pay — baseball and senior management teams — that when there is smaller difference between the best and worst paid (altough there are still diffferences) performance is better.

The other question, which is implied about, is “who is a superstar,” and I think this is an area where we need more research. My hypothesis is that — even more important than pay dispersion — is the definition. If a superstar is someone who helps everyone succeed (think Magic Johnson in basketball), rather than gets ahead by stomping on everyone else in his or her team, then that is the kind of star companies need — and worthy of merit pay.

Again, great comments.

posted on April 27, 2007

Tom "Bald Dog" Varjan said:

I’ve read somewhere that chimpanzees have the largest brains, thus highest individual IQ among animals, but their group IQ is basically idiotic. Baboons have pretty low individual IQ but very high group IQ.

So when hiring, I want to have great team players, so I forego the geniuses, and hire “team” people. People who are natural collaborators not competitors, just as Charles has pointed out: “Talent”–unless it comes to mean the talent for collaboration with others–is not as useful as it once was.”

I go for character since everything else can be taught. I hire people from broad and often eclectic backgrounds. As a result of their backgrounds they see the world from interesting perspectives. I’d like to capture that difference.

I also believe in constant hiring. When some good people walk in, it’s retarded to say “Sorry, we’re not hiring.” Scoop them up or the competition will and uses them against us.

I like treating a team as an immune system, and reward the team as a unit. Hence I like using equal base pay and bonus for every team member. The team leader gets a tad more for the extra responsibilities. Whenever we’ve implemented this method, people started taking their commitments seriously. Internal competition disappears. Money is no longer an issue, since everyone gets the same.

I don’t believe in firing people, but I believe in implementing strict consequences for failed commitments. And here I mean the failure to take the promised action, not for failing to achieving a certain result. When people fail to take the promised action, they are requested to go on unpaid leave and put in a specific number of days of work at the local temporary labour agency doing some hard construction labour.

This sends a message to people: “Broken commitments and promises have consequences but we give you a chance to improve.” After doing some heavy labour work, people return with a new perspective and apperception for their careers.

It’s like parents with their kids. Parents punish their kids when necessary, but don’t say: “Let’s get fire them and make some new ones.” And I like firms that operate like a family. In my experience these people put their hearts and souls into their works, and they can operate in the state of what Mihaly Csikszentmihalyi calls the Flow: “Being completely involved in an activity for its own sake. The ego falls away. Time flies. Every action, movement, and thought follows inevitably from the previous one, like playing jazz. Your whole being is involved, and you’re using your skills to the utmost.”

posted on April 28, 2007

Heidi Ehlers said:

Tom Varjan?

You are one in a million, billion, gazillion.

I can only imagine the sense of pride that must permeate your corridors.

Play on Miles, Play on.

posted on April 28, 2007

Steve Roesler said:

David,

I think that in the War for Talent, we have found the enemy and it is us.

Just did a post, part of which was in a similar vein as yours. Your practical suggestions ring true from my current consulting experience. Here is a cut-and-paste that could be added to the list:

Looking for talent?

1. Take time to identify what you’re really talking about. In a world of platitudes, high potentials, excellence, star performers (fill in your favorite), it’s easy to overstate what you need. I’m not talking about lowering standards; I’m talking about raising the reality factor.

2. Do your recruiting systems make it easy for candidates or discourage them?

Online applications are the norm. Yet I can tell you from first-hand experience that many of the websites are clunky, user-unfriendly, and periodically inoperative. I’ve watched job candidates go through numerous screens, fill in data, and 30 minutes later watch it disappear when they clicked “submit.” But it wasn’t submitted. It disappeared.

3. Get people in front of people. Fine, you want online applications that are screened by keywords? Then stop telling the world that you are looking for “that unique individual who will add to our diverse workforce.” Unless of course you are looking for binary people.

Look, we all know that relationships matter. If it takes a month for a candidate to see, or even talk to, a real manager or recruiter, they’re gone. If you at least call me right away and ask me interesting questions and tell me about your organization, I’m still interested even though I may get a call from some other firm.

4. If you’re recruiting on campus or at a job fair, actually take and use the resumes given to you. Then follow up.

Real story: Person goes to job fair with Fortune-ranked companies. Asked to bring 20 resumes. Talks to recruiters. Reaches into brief case to hand over resume. Recruiter says: “Oh, if you are interested, you’ll have to apply online. Missed opportunity, tarnished image.

posted on April 29, 2007

Pawel Brodzinski said:

One of my lessons is that a situation when your star player leaves is quite often a good thing after all. You’re forced to reorganize the team because chances aren’t good that you’ll find another person which exactly suits the gap. Quite often you end up with healthier organization, of course the prerequisite is to have changes implemented wisely.

Another lesson, which is general but applies in talent recruitment too, is that you should always use the common sense. There are positions where I need talented and rather complete person, although I prefer to employ people who are yet to be formed as employees. It all depends on the situation, the role in the team, the timeline, the person, the prodct etc.

posted on May 1, 2007

patmcgraw said:

Amen to points #1 and #2. We used to refer to ‘superstars’ as ‘Jesus du jour’ because they tended to be the shiny object that ineffective leadership hoped would be a silver bullet for all the problems created by senior management. And as for #2, I would only add that talented individuals are all too frequently hired by firms that have no understanding or method for taking advantage of the individual’s capabilities which is why so many talented people get frustrated and move on. It is all about the system/culture!

posted on May 1, 2007

Joseph Heyison said:

I have the feeling I’m living on a different planet from all the “talent consultants” who have been responding. Perhaps it’s because I’m currently in a large law firm.

We get thousands of resumes a week and hundreds of calls from legal recruiters. We’re awash in talent, and we can be very picky about who we interview — with two exceptions.

There’s always a shortage of rainmakers.

For the last couple of years, it’s been hard to recruit top entry-level lawyers, although we wash 95 of a hundred out of the firm within seven years. But legal (not rainmaking) talent with two to 40 years of experience is abundant. If we ever ran short, the reserve army of unemployed senior lawyers would be ample (although they’d have to be called temps to avoid upsetting the juniors). Not to mention outsourcing to India.

The talent shortage is more an invention of consultants and a reluctance to use individuals over 30 in lower level roles than it is a real problem. In 1996 a consultant came to me and warned in the most dire terms that the baby boom would be retiring soon and we’d have a shortage of talent. I’m still waiting. I suspect I’ll be hearing it when I retire — and there will be dozens of people clamoring for my job.

posted on May 1, 2007

Wally Bock said:

Joseph, I think a lot depends on what industry you look at. I’ve worked with clients in the electric power industry, for example, where things are very different.

At one of my clients, fully 70 percent of senior managers are eligible to retire within the next five years. With skills craft workers, the percentage is the same, but the problem is more dire because the union apprenticeship programs that develop the crew members who develop into team leaders have been drying up for a decade or more. For certain specific skill positiong, nuclear power engineer, for example, the education pipeline is effectively dry.

posted on May 4, 2007

Heidi Ehlers said:

Getting resumes is easy, and if you’re playing the quantity game, no issue.

If you’re interested in the quality game it’s a completely different story.

– heidi

posted on May 4, 2007

Tom "Bald Dog" Varjan said:

I share Heidi’s view. There are lots of good lawyers. But there is a shortage of truly talented lawyers. And by talents I mean a lot more than information gained in law school.

As an expert, she may even have some recommended reading for us on talents. I can suggest Marcus Buckinham’s books.

There are lots of great investment advisors. But Warren Buffet is a real talent.

> we wash 95 of a hundred out of the firm within seven years.

This is the other reason why they are not talents but merely good lawyers. I don’t think talents would wash out in seven years. Unless, of course, they are not treated as talents.

Ron Baker has written extensively on how many law firms degrade their lawyers by forcing them to sell their expertise in hourly chunks and account for their time in 6-minute increments. And then firms demand their lawyers to sell obscene amount of billable hours. This is just one example of treating talented knowledge workers as manual labourers.

Regarding rainmaking. In my experience a large chunk of rainmaking can me automated in the form of a marketing consistent programme. I think rainmaking is a lot more than chasing people and pitching them on services. David (Maister) is the living example. He’s created, what Alan Weiss calls, Marketing gravity. He puts out valuable stuff, and people sell themselves on hiring David based on that stuff. But to my knowledge, he doesn’t do traditional rainmaking. And every firm could do what David does, if the people at the firm had the discipline.

But most law firms I’ve worked with have been groups of individuals who happen to be lawyering under the same roof, but they’re a far cry from being a cohesive team, a real and true “One fim firm.”

posted on May 4, 2007

Joseph Heyison said:

Wally,

I worked as counsel to a small electric power company for six years, ending in 2002. We had moderate difficulty finding engineers and technical personnel at most, and none after 2000. But we were willing to hire people over 35.

There are always exceptions: nuclear engineering has been afflicted for so long that no sensible, numerate undergraduate would take a chance on it. There will always be a shortage of hospital nurses. (Although it’s a lot less than it was five years ago.) But with a few adjustments, such as opening up the pool, running a training program and outsourcing as needed, businesses can get all the bright bodies they need. Just send your recruiters to Michigan with offers for technicians and see what happens.

Heidi and Tom,

You didn’t read my post carefully. I said we get thousands of resumes and can be very picky about who we interview. The big problem is disposing of all the chaff, but there are plenty of imaginative, sharp and eager laterals left after we do. And frankly, it’s getting easier as more and more firms dispose of talented minders and grinders who can’t make rain.

The U.S. has a relatively flexible labor market. Shortages of skills tend to be short-term and workers rapidly go to where the money is. Example: 2002-03: imminent shortage of teachers, educational disaster predicted. 2005-07: Thousands of downsized knowledge workers are retrained as teachers; shortage manageable.

I note that of the commenters, perhaps one or two are actually in working organizations. The rest all seem to be consultants, based on URL names. We may have a skewed viewpoint here.

posted on May 4, 2007

Tom "Bald Dog" Varjan said:

Joseph,

My apologies. I must have missed something in your post.

> The rest all seem to be consultants, based on URL names.

But consultants, working with several firms, also have a broader perspective. Thoughts?

posted on May 5, 2007