The Talent Mandate
Why Smart Companies Put People First
By Andrew Benett, W. Barksdale Maynard, Ann O'Reilly
St. Martin's Press Copyright © 2013 Andrew Benett
All rights reserved.
THE BIG SHIFT
Access to talented and creative people is to modern business what access to coal and iron ore was to steel-making.
— Richard Florida, trends expert
THE WORLD OF BUSINESS HAS ALWAYS HAD A FEARSOME reputation for being complicated, cutthroat, and unforgiving in its speed. But today the pressure is greater than ever, as unprecedented levels of competition and the breakneck pace of change mean companies must adapt on the run or risk falling irrevocably behind. This applies to virtually every aspect of the game, from infrastructure to finances, but most especially to talent management.
Think how much has changed in less than a century: Employee management has evolved from individual owners directly hiring, training, and managing workers to the massive, sometimes bloated undertaking we have come to know as human resource management. I don't know anyone who is particularly fond of the term human resources (HR), itself a 1970s replacement of personnel; for that matter, I don't know anyone who looks in the mirror and actually sees a human resource peering back. There is something vaguely Orwellian about the whole concept.
Regardless of the terminology used, what we have now in midsize and larger companies are multiple layers of professionals charged with the functions that business owners used to perform on their own — hiring, training, and firing — while also being tasked with myriad modern responsibilities such as managing benefits packages, promoting wellness goals, and monitoring employees' digital behavior. This new system has succeeded in taking a huge weight off the boss, but all too often it has come at the expense of distancing the chief executive and C-suite from the vital front lines of talent management. That is a big problem. And it is a problem that can only be solved with a major shift in focus on the part of top executives.
A CHANGED LANDSCAPE
To understand how the talent situation has gotten so far out of whack, we must first recognize the macro shifts that have changed the talent equation over the past century. These are:
The shift from workers to talent
The rise of the ideas economy
The end of "jobs for life" and the beginning of Brand You
THE SHIFT FROM WORKERS TO TALENT
Cordoning off personnel management within a specialized department may not have posed such huge risks in the era preceding today's information economy. Back then, successful companies merely needed to find more and more "workers" — bodies to fill the slots and take care of whatever functions could not be automated fully. But it is an entirely different story now that most businesses fundamentally rely not on workers but on talent.
That is more than a semantic difference. Workers, it seems to me, bring to the job little more than functional competencies, whether it is loading boxes or filling out accounting records. Workers perform tasks almost mechanically according to instructions they have been given — typically doing things "the way they have always been done." The truly talented, by contrast, make things happen by their fiery individual aptitudes, ideas, and drive. They add something to the equation that is unique and nonreplicable. In today's transformed business world, the right combination of talent — managed and motivated in just the right way — is critical to creating the sort of differentiating value that supports long-term success. Enterprises simply cannot thrive without it.
Not convinced? Consider the impact just one talented person can have: How different would Apple be today if it hadn't hired Jonathan Ive, the young British designer who went on to design the iPod? How might the product lines of struggling Dell be different had Ive gone there instead?
The job of identifying, soliciting, and managing talent is so crucial now, it simply must not be left to an unprepared and unenthusiastic cadre of managers or those schooled solely in the HR discipline. Setting the agenda for the care and handling of talent can only properly be handled by one person: the chief executive officer.
THE RISE OF THE IDEAS ECONOMY
In the Industrial Age, products were king. Henry Ford built an empire based on mass-producing automobiles via assembly lines. Andrew Carnegie forged his fortune with iron and steel. Today, business success is more likely to center on something far less tangible: ideas. Knowledge, information, and creative innovation are the new building blocks of wealth and success. Billions have flowed to companies that have crafted cutting-edge information technologies (Intel, Microsoft, Cisco, Google) or applied computer-aided design and manufacturing to make older processes more efficient and profitable (DreamWorks, BMW).
What does this mean for talent management? It means that success is no longer about fine-tuning production processes to churn out more products with the same number of workers; instead, it is about fine-tuning the employee base to produce knockout ideas and build a level of value that vastly exceeds what each individual costs the company in pay and benefits.
Plenty of bright people have the education, training, and skill sets that today's employers need, but those basics are no longer enough. In the old-fashioned, mechanical-industrial world, an employee's performance depended on easily quantifiable variables such as experience and training. The requirements of any job were clear in advance, and the right employees were those who slotted right in and got on with doing the job competently. But fewer and fewer organizations do this simplistic kind of work anymore. Now high-level skills have to be combined with more rarified aptitudes. What most of us are looking for — or should be looking for — are employees who do not simply fill a position but create one unique to them.
At a time when five-year plans are instantly obsolete, when companies audaciously expand into not just new product areas but entirely unexpected categories, when competitors emerge seemingly out of nowhere, the right employees are the ones who can grasp the big picture, anticipate what is coming next, constantly learn new skills — indeed, who can shape-shift at will. These people are out there — I know; I have hired a bunch of them — but they are an elusive group that can be hard to spot, harder to snare, and hardest of all to retain.
How did the talent equation get so complicated? Some credit must go to the twentieth century's fundamental overhaul of the employer-employee compact.
FROM COMPANY MAN TO BRAND YOU
Remember "jobs for life"? They're gone.
Intensified global competition, economic downturns, automation, and many other disruptive forces have combined to make lifelong employment all but obsolete. Companies have had no choice but to work leaner, paring down payrolls to only the most essential contributors. As Loren Carlson of the CEO Roundtable somewhat grimly put it, "One of the great benefits of the recession, to some companies, was that they learned how many ... employees they could get along without."
But that is only half the story.
On the other side of the employment equation, a countertrend has taken shape: Professionals with portable skills have developed a taste for switching jobs. No longer able safely to rely on a company for sustained employment, they have started relying instead on themselves. Veteran management guru Tom Peters put his finger on the trend when he coined the concept of the "Brand Called You": "You don't 'belong to' any company for life, and your chief affiliation isn't to any particular 'function.' You're not defined by your job title and you're not confined by your job description. ... Starting today you are a brand."
With this new freedom, talent no longer have to follow a linear path to be desirable to employers. In fact, those who color outside the lines often appear more attractive to employers and enjoy greater success. My own career path reflects this new approach: By the time I turned 40, I had studied psychology and art history in school, worked for three major global communications networks, been managing partner of a brand consultancy, and even tried my hand as an entrepreneur as a founding partner of a tropical fruit juice company. And while I basically have established a career within the broad confines of marketing, I have friends from college who have cobbled together amazing backgrounds by transferring not just between jobs but also between industries.
As further illustration of this trend away from linearity, I offer the dramatically different career paths of two business superstars: A. G. Lafley and Stephanie Tilenius.
Lafley joined Procter & Gamble upon graduating from Harvard Business School in 1977. After taking a job as a brand assistant for Joy dish soap, he worked his way up the ranks, from brand manager and advertising manager to group vice president, executive vice president, and, ultimately, president, chairman, and CEO before retiring in 2010 and then returning to the helm of the company in 2013.
Like Lafley, Stephanie Tilenius earned an MBA from Harvard Business School — but 19 years later, in 1996. She turned down job offers from investment banking powerhouse Goldman Sachs and from Microsoft in favor of joining software startup Firefly Network. When that was bought out by Microsoft, she cofounded PlanetRx.com, an online healthcare and e-commerce company, which went public and ultimately fell victim to the bursting of the Internet bubble. Subsequently, Tilenius spent nine years in a variety of positions at eBay, including running eBay Motors, growing PayPal into a multibillion-dollar business, and as senior vice president of eBay.com, before joining Google as vice president of global commerce and payments. In this position, she helped build and launch a variety of products and platforms, including Google Wallet, Google Offers, and Same-Day Delivery. In 2012, she switched gears again and took a job with venture capital firm Kleiner Perkins Caufield & Byers, where she helps late-stage companies in the firm's Digital Growth Fund.
Less than two decades separate the time Lafley and Tilenius spent under the elms at Harvard, but their disparate career paths reflect the sea change in the relationship between employer and employee that we are seeing play out everywhere. The end of jobs for life means companies can easily jettison deadweight. But it also means top talent can shed companies. Even as unemployment levels remain high in many places, businesses are battling it out for the people they need to grow because top recruits are unwilling to sacrifice their own "brands" to prop up companies that are unlikely to get them where they want to go.
Today, a growing number of employers (and employees) are stressing not longevity within a single field but an individual's ability to adapt and learn, which in itself has the potential to grow the business in innovative ways.
TURNING YOUR COMPANY INTO A TALENT MAGNET
The entire talent landscape has changed, and businesses are changing to reflect the new realities. Leadership teams that are serious about developing an innovative, agile company that can reinvent itself as change occurs must be committed to cultivating and developing talent as a core strategic competency. Talent cannot be the focus of the HR department alone; it cannot be a second-order chore palmed off down the chain of command. It must be the top business priority of the most senior people in the company — starting with the CEO. Only through constantly seeking it out, attracting it, motivating it, and fostering a culture to support it will your best asset flourish.
In the process of researching this book, I conducted a survey of more than 100 senior leaders of U.S. companies. Their responses affirmed what I have been seeing and hearing in business generally: Only half are satisfied with the quality of the job candidates available to them — a dismal number in any case but especially at a time when the economy has knocked so many good people out of work. Nearly two-thirds (62 percent) are sufficiently concerned about the talent situations within their organizations that they are making significant changes in how they manage talent. And seven in ten confirmed that C-suite executives are spending more time today on managing talent.
Some speak of a talent shortage. I know from conversations with countless business leaders and HR professionals — and from my own experience — that the talent we need is already out there. All too often, it is being wasted, left unrecognized and underutilized. In the current business environment, we simply cannot afford that.
In the future, the strongest companies will be distinguished by the CEO's hands-on involvement in identifying, grooming, optimizing, and retaining talent. If you are a CEO or a member of the C-suite — or aspire to get there — this book is meant to help you.
The Talent Challenge: Cutting Across Industries
"In my board meetings, talent is front and center. Where I am sitting, the people issue is everything. There is a constant concern about, 'Do we have the best? How do we motivate? What's the pipeline, what's the succession plan?' It is a robust discussion. We are constantly trying to attract people. Talent is critical. Products and services are not enough." — Mellody Hobson, president, Ariel Investments; chairman of the board, DreamWorks Animation SKG
"Talent is a top topic in the C-suite today. There has been a definite uptick in interest. I am astonished at how many jobs companies are trying, without success, to fill. 'How can this be when unemployment is so high?' The problem is, the talent they need is not in great supply. What companies are looking for has changed a lot. And they just end up stealing each other's talent." — David Wilkie, CEO, World 50
"Talent is so important today because it's so thin. If you have a deep bench, you don't worry about your starting players. But if you have no bench, talent is everything. And we have decades of American industry gutting itself. They have almost completely eliminated research and development, and that has alienated the smart tech brains. We have no depth. It's gauze protecting us, not chain mail." — Robert X. Cringely, technology journalist and author of Accidental Empires
"Building the plants and shipping the stuff, that's the easy part. The hard part is getting the right talent. Talent is the tip of the spear. You can build the most beautiful plant in the middle of China, and if you don't have the right people, it will be a mausoleum." — Carlos Abrams-Rivera, senior vice president, marketing, Mondelez International
In the next two chapters, I explore a number of significant workplace shifts — some with roots in the technology industry and others being propelled by a new generation and an emerging mindset — before setting out the six essential strategies every forward-thinking company will need to embrace to come out on top.
BIRTHPLACE OF THE TALENT REVOLUTION
IT IS HARDLY A NEWSFLASH THAT WE HAVE BEEN LIVING through a vast technological upheaval that has changed our lives profoundly. The crucible of this phenomenon is, of course, Silicon Valley, a place that, just a few decades ago, was known mostly for apple farming. At that time it was simply Santa Clara Valley. And it was here amid scrubby fields and rattlesnakes that Bill Hewlett and Dave Packard famously set up shop in a tiny garage in 1939. In another garage on a suburban driveway, Steve Jobs and Steve Wozniak assembled their first computer, the Apple I, in 1976. A little more than two decades later, Larry Page and Sergey Brin founded Google in yet another garage.
For the first-time visitor, the Valley's balmy climate, palm trees, and casual dress might suggest little more than just another laid-back vacation destination. That is, until you see the road signs bearing some familiar names: Google, Apple, eBay, Intel, Oracle, Cisco. This relatively unassuming 1,500 square miles in Northern California accounts for an astonishing 40 percent of all the venture capital investment in the United States. (The United States, in turn, accounts for around 70 percent of global investment.) (Continues...)
Excerpted from The Talent Mandate by Andrew Benett, W. Barksdale Maynard, Ann O'Reilly. Copyright © 2013 Andrew Benett. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.