Talent Management: the Emperors (not so) new clothes?

Now that the economy threatens to change the employment landscape for what looks like a long time to come, and Talent Management has shifted from the top of every CEO’s priority list to number 7, strategically placed behind paperclips, isn’t it time we challenged the whole notion of selecting and managing talent?

I personally believe that there is no shortage of talent out there.  Indeed, there never was, we just did a lousy job of locating and nurturing it.

It would be easy to kick our friends at McKinsey for starting the talent shortage scare but whilst they were a little guilty of fanning the ‘good people are scarce’ misnomer with their original War for Talent paper, they also made a number of other significant comments and observations which unfortunately were largely ignored.  More importantly perhaps than a shortage, they proposed that in order to get hold of, and keep, ‘good’ people – or talent – organisations were going to have to try harder.  It would no longer be enough just to say what a great company you were, or knock up a glossy employer brand to hide behind.

Instead, they wagered, you would have to really get your offer right, which included creating great opportunities for employees, committing to their longer term development and also creating compelling reward strategies. This was actually quite an astute observation given its time, 1998.

Up until 2001, the notion of a company’s greatness was rarely challenged overtly by employees or potential employees. It was also the early days of the internet and the power of ‘connectedness’ driven by web 2.0 and social media tools had yet also to give employees the voice they have today to challenge organisations and their ‘employment proposition’. Indeed it wasn’t acceptable to do so.

But then along came the meltdown of some of the corporate giants including WorldCom, Arthur Andersen and of course Enron. Such a blatant abuse of power and position, the shocking tales of corporate greed/fraud and the astonishingly poor people practices (mass redundancy announcements by text for example) left a very bitter taste in the mouths of employees and crucially, those that make up generation Y. The balance had shifted.

For me this whole sorry tale really challenged what the definition of ‘talent’ was, where we looked for it and how we developed it. Here we had organisations that had streamlined and finely tuned their talent pools along the industry standard accepted norms. And yet it was the very same talent pool that went on to bring them to their knees.

Attending a conference on Talent Management we heard BT (an organisation of 140,000+ people) outlining their strategy for managing their ‘talent pool’ which amounted to only 1500 people (or 1% of the workforce) across the ‘top layers’ of the business.

Many companies take this approach but is it not perhaps a little arrogant, at the very least short sighted, to narrow down your ‘talent pool’ to the very top slice of the organisation? As someone who spent their early HR career in a unionised shop floor environment, I saw firsthand how talent resided in many places, not just at the top or in the professional ranks.  Indeed, Dame Elizabeth Butler-Sloss once opened a CIPD leadership discussion with this gem: 

“I do a lot of cooking and in my experience, it’s the scum that rises to the top”!

Perhaps it’s time to challenge our notion of what constitutes talent, where we look for it and how we subsequently nurture and develop it. Perhaps it’s time to be more flexible and open minded to find the winners of the future and stop following convention in selecting talent. Perhaps it’s time we stopped for a moment and considered how crazy it is to think that of our working population of some 28m only 1% of these individuals are classified as people with high potential.

Smart consumer...smarter employee.

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Consider the life of the consumer over the last few decades. Purchasing decisions were, for many years, driven significantly by marketing spend and brand presence. ‘Customer experience’ was little more than an interesting statistic, if it was measured at all. And when it was, it was usually something done every one or two years.

In those days we were slaves to the brands. Sure, we could share localised experience and opinions with our family and colleagues but the impact this would have on the success of the brand was minimal, unless it was something really outstanding. More important was the ‘share of mind’ gained through press, TV and other forms of marketing.

Then along came the threat of the internet. At first there was a mixture of hysteria on the one hand with thinkers predicting the death of the ‘bricks and mortar’ businesses and the collapse of the High Street as everyone moved to buying online. On the other hand you had indifference, with the non believers saying it was unsafe, lacked security and that it would be a fad that would pass.

Of course, neither of these extremes came to pass. But the really interesting thing is that when you look behind this you find that something much more fundamental happened that many failed to anticipate.  Look a little deeper at the dialogue from all parties at the time and it primary revolved around the impact on the ‘process’ or ‘mechanics’ of the customer/supplier relationship – the physical distribution of the goods, the way people pay, the physical impact on their shopping habits – all the tangible stuff. Consequently many organisations simply embraced the changes, creating new distribution and sales channels to exploit the online phenomenon. They also started to switch marketing budget to online, thinking that they would be able to influence the consumer online in the same way they had done through the more traditional channels.  Indeed, many saw the online channel as another great opportunity to immerse the customer in the brand.

What many spectacularly failed to foresee was the intangible; that the internet brought the consumers together, in vast numbers, in a way that was just not possible before. And they talked. Millions of people who had never had an inclination to talk to others outside of their own personal network were now talking to each other about literally anything of common interest; including their experiences of products and services.

Fast forward to today. My wife was never really convinced by online buying and the internet. Then along came eBay! Now, unless there is a good reason, we, or should I say she, sources everything we need online. Not only that, when sourcing anything there is only one place she goes to look for information to determine the ultimate purchase decision – her online network. 15 years ago, it was the marketing muscle of the corporation that determined spending habits and consumer choice. Not any more. For my wife it’s the people in her trusted network who share their knowledge and ‘experiences’ of products and services who guide her decisions. Does she know any of these people? Not one of them. Does she trust them? Hell yes!

Fundamentally, at the time the internet emerged, people and organisations become so fixated with the tangible impact of the internet and or the impact on the bottom line, they failed to see the intangible threat of their customers having access to each other and the impact and influence they could have as a result.

So what parallels are there to be drawn in the world of the employee and the current struggle organisations face in finding ‘good people’? Well strip away the top layer of product and service and there is no difference at all. At the time the internet emerged, similar dialogue was going on in relation to the impact of the internet on recruitment, which in itself had suddenly become a ‘strategic’ issue. Some said the executive search and selection market and other third parties would be wiped out as a result of the internet; organisations would use the power of the internet to reach out directly to candidates in a way that was not possible before. Similar stories circulated about press advertising. I remember being told so many times that trade magazines and the likes of the Sunday Times employment sections would disappear within two years.

Of course, as with the consumer market, this didn’t happen. Yes, the landscape has changed dramatically and continues to do so. But again, the interesting thing is that all the dialogue at the time centred around the mechanics and process – the medium used for advertising, the mechanism used for filtering, selecting and hiring, the mechanism used for managing applications and so on.

What has been missed is the emergence of the ‘smart employee’. With Enron, Tyco, Worldcom and now Rover in our back pocket, the attitude of the employee is changing. They no longer believe the bullshit. They are becoming more and more cynical. And most important of all, they are sharing this cynicism online, with millions of other like minded people. The emergence of the smart employee has taken longer than that of the consumer, and has yet to have any major impact but the signs are all there that it will.

Organisations ambitions to be the ‘employer of choice’ and to have that killer ‘employee proposition’ will be tested on a global stage, in a theatre where they have absolutely no control. More worrying perhaps, is that the increasing budgets of £m’s spent on developing the corporate employment image could be rendered worthless over night by the smarter employee.

Today my wife consults a million people she does not know, but trusts implicitly, to determine her next purchase. Tomorrow, she will consult the exact same people about her next job. If organisations don’t start to get with it they could find themselves playing to an empty auditorium.