Tuesday, 31 March 2009

Talent management in ICT


ITU talent management slide   I've been at the International Telecommunication Union (ITU)'s capability development event for Europe and the CIS in Budva, Montenegro over the last few days.  We had lots or rain but apparently its sunny there again today.

I found there was a very interesting mix of participants and speakers, talking about capability development at national level and in country regulators, and talent management in telecom firms, with a heavy focus on learning and especially e-learning to support all of this - with one eye on the more difficult economy and the other on the national economies, regulatory infrastuctures and characteristics of Southern, Central and Eastern Europe including the CIS.  I think I found the event particularly interesting as I've done quite a bit of work in telecoms, and in the geography too.

This was the ITU Director's summary of the challenges facing participants:

"In this period of economic downturn, we are seeing that competitive advantage lies very much in fostering the skills and competencies of people — and this cuts across nations, regions, sectors and organizations. Particularly in a knowledge-based economy, whoever has the best talent wins. Numerous surveys reveal that shortage of internal talent and skills can be an organization’s greatest challenge. Top CEOs now all recognize the importance of supporting, fostering and growing talent within their organisations. And this is particularly true in the rapidly changing ICT sector where the need for new staff skill sets is constantly shifting. As the economic crunch is leading to cuts in staff and outsourcing — management has to adapt to making do with less — and making far better use of what they have. Now, more than ever, those responsible for learning, development, and retention of staff have to deliver on practical core business needs."


I picked up these points and talked about the changing nature of talent management, quoting from the recent Stepstone report I've posted on here recently, and identified the following challenges:

  1. Understanding who is talent now
  2. Dealing with increased uncertainty, particularly over the longer-term
  3. Developing their potential, and the increasing need for coaching, e- and informal learning
  4. Maintaining momentum when surveys are showing talent management falling down the list of business leaders priorities.


My next post is going to deal with some of the particular challenges for effective learning (and that will apply anywhere, not just in telecoms and Europe / the CIS.



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Monday, 30 March 2009

Engagement vs satisfaction (increasing value)


The other key difference between engagement and satisfaction is the level of value it provides.

Satisfaction is nice to have, but it doesn't necessarily help you achieve your business objectives (your employee are satisfied with your HR and management practices, and the way their line manager is supporting them - but so what?) - unless your business is built around having happy employees (eg Zappos).

Engagement should be very much about improving your business - so it moves up from 'value for money' to 'added value' in the value triangle):


HCM value triangle



The critical thing here is to define engagement (ie your bucket) as something you believe is going to inform business performance (ie as an outcome in the HCM value chain, you want to define it as something that has a fairly direct and considerable influence on objectives / measures in the business impact column in the value chain).

And ideally you want this belief to be supported by both cross-organisation and your own in-organisation research - see my next post.





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Sunday, 29 March 2009

Engagement vs satisfaction (activity and output)


As I noted in my last post, engagement is often defined as something like 'say, stay and strive'.  So a lot of people see the difference between this and satisfaction as:

  • Being more complicated - ie not being a simple, reasonably tangible thing like satisfaction, but a mix of factors
  • Being a build upon satisfaction, being more about commitment and the display of discretionary behaviours
  • Also referring to the propensity to stay in the organisation.


I think all these differences are valid and relevant.  However, they're not the main difference.

The main difference is that satisfaction refers to what the organisation is doing to a person - its HR and management processes, and how each particular line manager supports the individual.  Satisfaction is about being satisfied WITH something.  Satisfaction questions in an employee survey may give some information about the person, but in the main, they relate to the THINGS they're satisfied or dissatisfied with.

Engagement on the other hand is about the person - about THEM, about their state - which as a result of the things they are satisfied or dissatisfied with.  Engagement questions in an employee survey relate to the person themselves - their advocacy, liklihood to remain employed etc.

In the HCM value chain, satisfaction is an objective / measure for activity, engagement is an objective / measure for output, for human capital.


HCM value chain





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Saturday, 28 March 2009

Engagement and human capital


   I wrote in my recent post on 'A' that I'd be posting more on engagement surveys soon.  However, I also noted that there is still a surprising level of confusion over satisfaction and engagement, and wanted to deal with this point first.  And actually, the very first thing I want to write about is engagement and human capital.


First: human capital.

I've stressed in several earlier posts that people aren't human capital.  And HCM isn't managing people as human capital.

Human capital is the full range of attributes that can be provided by employees, and others associated with an organisation, to that organisation.  And which have a particular value to this organisation (forms part of its organisational capability etc).  It consists of things like capability, engagement, health etc - but the specifics will differ from organisation to organisation.  HCM is managing people for the accumulation of this capital, in order to create value.

The important thing to note (for the purpose of this post) is that human capital is a category, a bucket - not a single thing.


Then: engagement

Engagement is both a process (somebody or something can engage somebody else) and a state (somebody is engaged).  But what is that state?

The best well known definition is 'say, stay and strive', which several research firms / consultancies take credit for.  This suggests that the state of engagement is a mix of advocacy, retention and commitment (display of discretionary behaviours).  One of my recent favourite definition's is Engage Group's mix of satisfaction with change management, involvement in 'big ticket' decisions, understanding of personal contribution, empowerment, involvement in 'everyday' decisions.

The common factor in most of these definitions is that they're categories / buckets too.  Engagement doesn't actually mean anything on its own without understanding the constituent parts.  Which is, I think, why a lot of organisations still struggle with the concept.


Human capital and engagement

Engagement is actually simply a small bucket within the bigger bucket of human capital.  And just as each organisation needs to decide what human capital it needs, it needs to define engagement for itself. 

An obvious example is retention.  If you've been defining engagement as 'say, stay and strive' but nobody's leaving in the current environment, then perhaps you need to reconsider what you're measuring / trying to manage.

So ask yourself this - what's in your bucket?





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Friday, 27 March 2009

The Differentiated Workforce (Put Strategy, Not People, First)


     I've just read the first chapter of Becker, Huselid and Beatty's Differentiated Workforce.  I agree with a lot of the the book's suggestions, but disagree with some others.


Differentiated strategy, differentiated workforce (they're too different things!)

I agree that "most firms don't really have a workforce strategy" and clearly, this is a bit of a problem!  I agree that "Despite the tremendous attention in recent years to measuring the financial contribution of HR and talent, there is much less attention to getting the underlying workforce strategy right".  I've made this case several times - measures are important, but it's what you do with them that counts.

I also agree with the need to differentiate workforce (or people management) strategy.  I like the authors' point: "Just as any good business strategy involves making the right choices and the right investments, the same is true of a workforce strategy", and also Lucien Alziari's comment in the endorsements: "If you read your company's HR strategy, would you be able to tell which company it was written for?".  I'm a firm believer that you should be able to do so.

And I also believe in differentiating the workforce.  So, for example, I was fairly unimpressed by Paul Turner's comments at the recent CIPD conference that best practice in talent management is the inclusive approach - treating everyone as talent - and that this is what the majority of organisations do.  Firstly, because just because most organisations do this (based on a very limited sample), doesn't make it best practice.  Secondly, because I believe that organisations need to identify best fit solutions, rather than rely on best practice (which supports the points the book makes that I address above).  And thirdly, because I also believe that exclusive approaches - identifying a small group of people as talent - tends to be the right approach for many, if not most, organisations.

But not necessarily all.  What about an organisation that has an organisational capability around inclusivity.  They're not going to want to differentiate, are they?  The authors promote best fit over best practice, but then promote differentiation as a best practice that all organisations can use.  I don't think that logic works somehow.

A bit like Boudreau's belief in pivotal talent, the authors seem to assume that a strategic approach has to involve differentiation of the workforce.  They state that "differentiation is not just a feature of a successful workforce strategy, it is the most important feature" and "Differentiating the workforce strategy ultimately means investing disproportionately in certain employees and groups of employees, based on their strategic roles".  Why, and where's the evidence for this?  The closest they get is to say that: "Just as strategic differentiation reduces external homogeneity, internal homogeneity should also become much less important".  But I don't think this closes the case.  In fact, despite my comments above, I actually think that the global reset is pushing us towards greater inclusivity, eg towards reduced reward differentials, so we need to be careful not to extend a differentiated approach too far.

There are some other recommendations I don't totally support as well.


Strategy is more than just differentiation

One of my problems with the book is that its approach to people management strategy is purely adding value (requiring that "line managers define success but that HR professional deliver the solution" by identifying the 'strategic capabilities' - business processes - which best align with the business strategy).  I agree that adding value is essential but to me, people management can only be truly strategic when it creates values too (ie it identifies other capabilities which will inform not merely support business strategy).

The authors seem to disregard the opportunities for creating value by competing on intangibles by explaining that "the line line of sight between workforce strategy and strategic success is typically so indirect that figuring out how to get from here to there is difficult... There are few instances where a selection system, a performance management system, or leadership development has a direct impact on the firm's bottom line, making it hard to see how these decisions translate into strategic success."  I agree with the authors here - it is hard.  But this doesn't mean that we shouldn't try to do it.

And I believe that HR will have much more of an impact if it improves the capability of the whole workforce - in line with an overall human capital management strategy, rather than by just enhancing the capability of those people in the most strategic jobs.


Of course, I may change my opinions on the book once I've read the later chapters.  I'll let you know if I do - or we'll probably be discussing the book in the next episode of TalkingHR.



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Thursday, 26 March 2009

Web 2.0 and HR: Ignorance is not bliss


  "Like it or not, Web 2.0 is unleashed and a part of everyday life, but does HR really know what to do with it? Christiana Tollast examines how HR can harness this powerful beast, and use it to its own advantage."


I'm quoted fairly heavily in this article in HR Zone.  Take a look.


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Wednesday, 25 March 2009

Tours through the Blogosphere: A is for About.com HR


   You may have noticed that I've started a regular series of updates of posts from across all the HR blogs at HR Zone.

To support this, I've been trying to get my RSS reader and list of feeds a bit more up to date.  And I thought it might also be a good idea to share a bit more information on the HR / HCM and other feeds that I regularly review.  I do have a blogroll on Strategic-HCM's side bar, but I keep this quite short, as other wise I think it looses value (to a reader, if not in SEO terms).


Tours through the Blogosphere

So welcome to the first of my new irregular series of posts providing an alphabetical tour of the HR blogsphere.  Taking a letter at a time, I'll list those blog feeds I subscribe to which have a title beginning with this letter, and will also highlight one of these that I think may be particularly worth you reading too.


A is for About.com Human Resources

My favourite 'A' blog is Susan Heathfield's Human Resources blog on About.com.  This blog deals with fairly practical HR issues, but generally from a quite insightful perspective.  One post that got me thinking recently was Don't Blow Your Employee Survey:

"Recently, several of my clients have initiated employee satisfaction surveys. In one instance, the company employed a marketing firm to run focus groups. In the second, an online survey, developed by employees, was used. Both processes left a lot to be desired despite the fact that they also supplied some useful information.

I was struck, in both cases, by the poor methodology used. The methods make the results suspect, although in both cases, there were no surprises in the results. The employees pinpointed work processes the companies already know they need, and, in some cases are working on, too. In both employee survey situations, employees complained about confusing, leading questions."


It's a post that resonated with me, because I also come across many situations were engagement surveys don't provide me with the information I would really want in order to be able to help my client most effectively.  And there is still a surprising level of confusion over satisfaction and engagement (the key difference isn't about commitment or retention or anything, it's about whether we're most interested in the person or the processes).  Presentations like Richard Beatty's recent tirade don't help.

I'm going to be posting more on engagement surveys soon.


Other blogs

I also read:

HR blogs:


Any others 'A' blogs I should be paying attention to?



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Tuesday, 24 March 2009

Happy hour...


   I'm going to be appearing as a featured guest on HRchitect’s blogtalkradio show, the HR Technology Happy Hour WebMingle.

The show will air live this Friday, 27th March, from 6.00pm GMT, 1.00pm CST.

To listen to the show live, just go to BlogTalkRadio.com/MattLafata and click on the Listen Live red box in the upper right corner.

I’ll be taking live questions, so if you’d like to dial-in to ask a question the number is +1 646 595 2360.

You can also ask questions via Twitter by adding #WebMingle to the end of your tweet.

Or if you’d like to email a question for the show, just send it to tappleby@HRchitect.com with my name and “Happy Hour WebMingle” in the subject line.

To listen to a broadcast after it has aired, scroll down the WebMingle show page to access previously aired episodes.



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Monday, 23 March 2009

Cold war for talent?


   A recent post on Taleo's blog referring to PDI research suggested that talent management had fallen from 2nd to 8th place in business leaders' priorities.

More recently, Gartner made no mention of talent at all in its list of the seven greatest concerns for CEOs in 2009 (Restructuring; Can't write off fast enough; Loss of business and governmental trust; Globalization instability; New major regulation coming; Government as the new emerging market; and Green is not going away).

And today, Personnel Today reports on a PwC survey finding that the availability of workforce skills has fallen in CEOs' lists of priorities from 1st to 7th place.


Human vs financial capital

It's not too hard to see a pattern here, and of course, it's not that surprising given that human capital once again took a supporting seat to financial capital towards the end of last year.  But as I've noted several times, and as most of my readers will know for yourselves, people still remain the main long-term source of competitive success.

This dichotomy is shown through in much of the current research.  So, Personnel Today, for example, notes that

"A quarter of the 1,100 chief executives surveyed worldwide said they are looking to reduce headcount this year and 35% of CEOs in the UK want to cut jobs over the next 12 months.

While no longer an immediate matter, however, the war for talent was seen as a strategic concern by 97% of respondents. UK chief executives, in particular, expressed concerns about the limited supply of candidates with the right skills - 78% of them saw this as a problem, compared to 69% globally."


A cold war for talent

And I think another report from Stepstone and the Economist, 'The cold war for talent' expresses the tension even better.  The research for this was conducted in November and December last year, so some of its conclusions are already well out of date (for instance, I'd certainly argue that the Gulf's vibrancy is now much reduced), but I think the main conclusions do still stand, and I'd suggest the main ones are:

  • Hiring talent is now less about volume and more about targeting a few highly skills individuals for specific roles - including targeting competitors' employees who have lost their jobs (which I think is where the cold war metaphor comes from).
  • Developing existing talent is now even more critical.  I liked this example about Vodafone, although I don't know whether the programme survived the company's 500 redundancies last month:

"As a result, some companies are focusing on developing a talent pipeline from which to fill their executive ranks. To achieve exactly this, Vodafone, a mobile telecoms operator, launched an initiative, initially targeting 75 people who are on development programmes of either 18 months or three years. 'This programme is designed to fill the gaps globally that are coming up as we expand,' says Kerensa Sheen, HR director of Vodafone’s global leadership and talent. 'By year three, we’ll have 200 high performers on it who are on succession plans'."


  • HR now has a great opportunity to demonstrate the strategic value of HR to the business (although the function has to show its relevance first).


The future of talent management?

I've been considering these findings against a post by Andrew Boyd at Aberdeen Group who refers back to an Economist article from last November predicting the rise of the CEO (which itself is interesting in connection to my last post on Dick Beatty, CFOs, trust and HR).

The article notes:

"The biggest loser in the struggle for power will be the human resources director. In the past five years HR has been enjoying the greatest power it has ever had. The “war for talent”, which companies have fought tooth and nail, will be over in 2008, neither lost nor won: there will be a ceasefire brought on by lack of funds and exhaustion of the troops. An old truth will be whispered by the brave: most workers are not terribly talented and most of them don’t need to be, as most jobs don’t require it.

In 2009 a more elitist shift will occur: companies will worry about the performance of those at the top of the pyramid, while everyone else will be managed like a commodity. 'Talent' will be a word we wave goodbye to. In 2009 the word “staff” will make a comeback, as will 'headcount'."


In my view, that was almost, but not quite, right.  It's not just talent at the top that's being seen as important, but a broader range of people with key skills.   Therefore, I think 'talent', and the need to differentiate talent from other staff, hence 'talent management', are actually becoming more important, not less.

So although I didn't think much of Beatty's tone, I am still looking forward to reading his new book, the Differentiated Workforce (first review I've seen here) - I'll let you know my thoughts once I've read it.


In the meantime, do let me know your thoughts on the future of talent management...



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Friday, 20 March 2009

Beatty: 'CFOs: don't trust HR' and the Employer of Choice


   I've been tracking the HR blog discussions arising from the CFO.com article, Memo to CFOs: Don't Trust HR.  This described a presentation made by Rutgers professor Dick Beatty to a conference of CFOs, at which Beatty laid in rather heavily to HR.

I think these other bloggers' posts cover most of the criticisms I would make just fine, so I won't bother repeating them myself here.

However, there are a couple of areas in which I'd make slightly different points to other bloggers.  One of these is about engagement vs satisfaction, but I'm planning a short series of posts on engagement, so can deal with this then.  And another area is a response to Dick Beatty's point that  "while the language of organisations is numbers, HR isn't very good at data analytics".  Quite a few bloggers have pointed out that we're getting much better at this now, and I wouldn't disagree.  However, I think the bigger challenge to the sentence is that we should perhaps now change the language we use to manage our organisations.  But I've made this point several times before, for example, here and here (which interestingly dealt with some of the differences in perspective between HR and CFO).

So what I wanted to pick up in this post is Beatty's points about HR's "silly" idea that a company should try to be the "employer of choice":

"If you are the employer of choice, he asked rhetorically, who's going to be applying for your jobs? 'Everybody and their dog's brother,' he said. 'You want people who are excited, enthused, and understand how to contribute to what you do, as opposed to those who simply want to find a good place to hide out'."


I think this is just nuts.  Being an employer of choice has always, in the way I've understood it, being an employer of choice for the people you choose, or as Jim Holincheck describes it, the employer of choice - for top talent.

As long as we're referring to a particular type of talent here (the people with the values, competencies etc etc desired by a particular organisation), then I don't see how Beatty can argue against the phrase.

Being an employer of choice should be about being clear about what sort of organisation you're working in (its vision, values, big idea, mojo etc etc), and therefore what sort of organisational capability (human, organisation and social capital) you need, and then building your HR and management practices around this, allowing you to easily recruit, engage, develop and retain people whose own vision, values etc etc align with those of your organisation.

I actually think Beatty's probably arguing for much of same thing in the Differentiated Workforce.  So maybe his criticism is really directed at the way 'employer of choice' is interpreted in most organisations - few of which follow anything like the thinking or process that I've just described above.

Maybe he's got a point after all...


Photo credit: Morio


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Thursday, 19 March 2009

Presentation at ITU Regional Human Capacity Development Forum for Europe and the CIS, Monday 30 March


    I'm in Bulva, Montenegro in a couple of weeks time, presenting on talent management along with Clive Shepherd, Donald Clark, Mark Harrison and others, mainly ministers, professors and HR / other Directors from governments, universities and companies in South, Central and Eastern Europe.

Let me know if you're going to be in Podgorica on the 29th / 31st or Bulva on the 30th, and would like to meet.


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Wednesday, 18 March 2009

HR Carnival 18 March 2009


   The new HR carnival has been published at the Institute for Corporate Productivity (I4CP)'s Productivity blog, with a special focus on HR and productivity.



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Tuesday, 17 March 2009

Does RBS still glow?


    I'm listening to Philip Stiles from the University of Cambridge's Judge Business School who has been talking about leadership at the CIPD event I'm attending today.  This is his quote on RBS' morning meeting ritual:

"All these executives trouped up to Edinburgh so that Fred Goodwin could ritually humiliate at least one of them - they just took it as a right of passage."


Here are some, potentially random, thoughts in response (written quickly before I get thrown out since the conference is ending soon):


In the last couple of Talking HR podcasts, we've been focusing on Best Companies, and in particular the changes in some of the listings from those published last year.  Financial services is one sector which is less well represented than in the past.    As People Management notes,

"Banks are the most obvious example of brands that have been hit hard in the past 12 months, and the Best Companies list partly bears this out. Morgan Stanley, at number eight, is now the only financial institution in the higher echelons of the list, whereas last year it was accompanied in the top 20 by Goldman Sachs, RBS Retail and Deutsche Bank, as well as Britannia Building Society. This trend is less a result of reduced engagement and more the fact that “three or four of the major players simply didn’t enter this year.”


Despite this trend, some of the banks still seem to be managing to engage their people quite well.  For example, writing in Human Resources, Lynda Gratton has announced that RBS staff are still highly engaged despite job losses and bonus cuts (and even the media attention they've been getting recently).

Actually, I could imagine that this media attention is one of the reasons engagement scores may still be quite high - it's natural, in this environment, that people will come together to defend themselves against what is bound to be seen as (and undoubtedly is, in part,) unfair attacks.

One thing that doesn't seem, in hindsight, to have contributed to engagement or business performance, is RBS' executive meeting that in Fred Goodwin's day at least, was held between 8-9.00 every morning to review the bank's performance.  Although this was singled out by Gratton as one of her 'signature processes' that provides a distinct firm identify and leads to organisational success; at RBS, it seems to have acted as a way for Goodwin to keep tight control over the rapidly growing organisation, humiliating any executive who didn't produce the required level of performance, and contributing to the UK's biggest ever corporate loss ($34.6).

This is obviously unfortunate - for Gratton, as well as RBS and the tax payers who now own the battered bank.  It's particularly unfortunate for Gratton given that at least one other of her most quoted signature processes have been withdrawn (BP peer assists), and potentially contributed to the departure of the previous CEO (Lord John Brown).

However, I don't think these two failed practices detract from the real benefits that signature processes can potentially provide.  But these clearly need to be appropriate for the particular organisation at the particular point in time. RBS' daily meeting (at least in the way it was run) clearly wasn't appropriate.  BP's peer assist looked good on paper, and was maybe appropriate for a time, but clearly wasn't generating the required results, and needed to be changed.  As Gratton said,

“There is no right answer here. As a management team you have to be intelligent and sensitive to all the data that you have got and make adjustments.”


I also hope that Gratton has better luck with her new endeavour, Glow, which obviously builds upon her last book, Hot Spots.  It's certainly supported by some longstanding research.

According to London Business School, Glow is about three distinct areas of life which enable people to radiate energy, innovation and success.  People who Glow:

  • Have built deeply trusting and cooperative relationships with others (a co-operative mindset);

  • Have extended their networks beyond the obvious to encompass the unusual (jumping across worlds);

  • Are on an inner quest that ignites their own energy and that of others (igniting latent energy).


    All seems to make sense, and interestingly, would apply to just about any blogger.  Probably not Fred Goodwin though.

  • Glow is available in the UK from 2 April, and you can get details here.  I'll be posting my reactions shortly after this.



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    CIPD Managing through a Downturn conference


       Most of the sessions in today's conference have referred to the need to balance both short and long-term perspectives in people management strategy.  Some have also dealt with the potential reset and its HR consequences, that I've also been posting on.

    I particularly liked the metaphor used by Arvinder Dhesi, Group Talent Management Director at Aviva, which was of a (dramatic) change in season, moving from Summer to Autumn.  Dhesi explained that this change includes the increasing democratisation of organisations ( listening more closely to the voice of the ordinary worker, as well as the ordinary shareholder and tax payer), and a corresponding reduction of faith in the celebrity CEO (the myth that these individuals have a magical power, and that autocrats are the right people to run our organisations).

    The change may even involve increased use of social media to stay in touch with all the constituents of a business (although I wasn't convinced that Aviva are doing much with this technology as yet).

    The metaphor changes the way other aspects of HR practice are seen - for example, the war for talent becomes looking after a forest or a fertile field.  Dhesi describes HR's role as one of constantly nurturing and guarding the environment - talent will grow itself but how fertile are we making the ground?

    Dhesi also believes, and I would support his view, that this seasonal change provides HR with an opportunity to pause and reflect, to ask how well we have secured the institutions we work for.

    We also need to think smartly about how we engage the rest of the business with this change.

    Steve Tappin, ex-Managing Partner for Heidrick and Struggles, and author of 'the Secrets of CEOs', described how, in his view, we have the wrong CEOs at the top of most of our organisations - a lot of whom won't be able to adapt to the changes in the business cycle fast or far enough.  They may say the right thing, but their focus will be on survival and they will just cut people out.  Other types of CEO (the missionaries) may not cut enough.

    In Tappin's view, the real war for talent is an internal one - and involves championing talent and HR within a company.  And this requires making cautious but brave moves from within HR.


    Photo credit: Hedwig Storch


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    Same old same old?


       A less positive sign of change, or really of no-change, comes from the FT's analysis of the 50 people who will frame the debate on the future of capitalism.

    Despite the fact that the connection between a lack of diversity (in particular the proportion of men steering the business world) and our current economic problems has been widely discussed (see for example my posts on sexism in the City, and on Barbara Annis' presentation at the recent Middle East HR conference - which currently I still have to post), there are just five women in this list.

    It doesn't look as if the required change and opportunity will be getting quite the full consideration it deserves...



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    HR in the new capitalism


       I'm at the CIPD's conference, Managing through a Downturn, today, so I'm going to go back to the theme of layoffs, and in particular my questions / suggestions over the role of HR in the global reset, for a couple of posts.

    Before I write about the conference, I'm going to focus on some broader reporting, particularly some recent articles in the FT's new series on the future of capitalism.

    This notes that "capitalism – our ability to buy and sell, move money around as we wish, and to turn a profit by doing so – is in deep trouble".  I actually think the issue is broader than this - the change I'm most interested in is that people are becoming less interested in serving the goals of capitalism, and will therefore be less ready to invest a major proportion of lives for the luxurious lives of their bosses and the profit of anonymous shareholders.

    Although as I've pointed out before, I think there is evidence both for and against this situation.  But I still feel the pro change is pushing ahead.

    Did you see, for example, that Jack Welch, regarded as the father of the 'shareholder value' movement that has dominated the corporate world for more than 20 years, has said that "we are in unchartered waters" and that it was “a dumb idea” for executives to focus so heavily on quarterly profits and share price gains....  "Your main constituencies are your employees, your customers and your products", he says.

    And even those who have benefited most from the single minded focus on shareholder value seem to be started to push back against what everyone else has already been viewing as unfair rewards.  The FT series provides the example of a banker who turns down an airline upgrade, and the BBC Analysis programme has also broadcast an excellent episode on this, the Threat of Thrift.

    Writers in the FT series also note that we have sacrificed "the most important source of happiness, which is the quality of human relationships", allowing our society to become "too individualistic, with too much rivalry and not enough common purpose".

    It's not that capitalism will disappear: "Like democracy, it has serious flaws – but, just as one find faults with democracy, the critics of capitalism will discover that all other systems are worse...  We do not want communism – as research shows, the communist countries were the least happy in the world and also inefficient. But we do need a more humane brand of capitalism, based not only on better regulation but on better values."

    But the key question is still, "If, as it has become painfully apparent, the value system and operating principles that informed the corporate psyche since at least the end of the cold war were found wanting, what should replace them?"

    A model may come from the Scandinavians countries which have "managed to combine effective economies with much greater equality and mutual respect. They have the greatest levels of trust (and happiness) of any countries in the world".

    And also in Asia, "executives – with the exception of some family tycoons who use their companies as piggy banks – have generally eschewed the sort of remuneration packages that have become so discredited in the west".

    It's all interesting reading.  But I suspect not half as interesting as what will happen next...



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    Talking HR Show #013 (More on Best Companies (with book review: Motivate like a CEO)


    Listen to the show

    Show notes:

    01:50 mins Krishna: Happy St Patrick's Day, photo sharing on Flickr, Pixie etc.
    05:40 Krishna / Jon: Recent news on woman sacked for updating on Facebook - impact on employer brand.
    9:15 Jon: Introduction to HCI, review of HCI Summit, Gary Hamel presentation, HR 2.0.
    14:00 Jon: Presentation from Tony Hseih, Zappos.
    17:00 Krishna: Zappos experience - does outsourcing call centres align with wowing customers?
    19:00 Jon: Need for a clear focus (Zappos: customer service, slightly weird culture).  Zappos' use of Twitter.
    22:45 Jon: Key take-aways - need for ambition, innovation to create competitive advantage through people; supported by effective leadership.
    24:10 Krishna / Jon: Etiquette in using social media / use of video at conferences - need to include a shout-out at beginning and end of video.
    31:20 Krishna re innovation conference in Ireland
    32:45 Krishna / Jon: New companies on the Sunday Times Best Companies list (need to continue engagement efforts through recession - also discussed in show #012, and an opportunity to maintain trust - discussed in show #011).  Best companies continuing to outperform other organisations through downturn.
    36:30 Krishna: Top 10 companies.
    38:30 Jon: Review of Fortune 100 Best Companies to Work For including Zappos case study.  Positive experiences in making redundancies.  Top 10 companies.
    41:15 Krishna / Jon: Reporting on best companies and the recession by state.
    42:10 Krishna / Jon: Best Companies still hiring, compelling case studies - including Nugget Market never having make a layoff.
    45:10 Krishna: Key take-aways - role of inspiration, transparency and common-sense management in best companies / best workplaces.
    46:30 Krishna / Jon: review of Suzanne Bates' book,  'Motivate like a CEO', inspiration vs motivation.
    49:45 Krishna: Positive coverage of communication - chapter 9 on story telling, chapter 10 on presenting 'on stage'.
    52:45 Jon: Positive coverage of the need for having a clear purpose (chapters 1-3), but criticism of GREAT acronym in chapter 5 - need to inspire through people's emotions.

    Krishna: More positive ideas in chapters 15 & 16.

    57:45 Wrap-up.


    Check out the resources we referred to on the show:


    Get involved with the show:

    Subscribe to Talking HR


    • Join us for future shows (check Blogtalkradio for schedule): +1 347 202 0722        
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    Photo credit: Knowledge Seeker


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    Thursday, 12 March 2009

    Peter Cappelli – Talent on Demand (again)


      Peter Cappelli’s presentation at the HCI Summit presented some of his ideas from his book, Talent On Demand.  These are his points (apart form where I couldn’t restrain myself anymore).  My review is at the end.


    Cappelli uses an analogy of an assembly line (getting the right engine and the right drive chain into the right car) for talent management.  And just as production has shifted to a just-in-time, supply chain management, pull model, so must talent management: “The push model is broken on the business side so therefore we’ve got to abandon the HR model that supports it”.

    Cappelli suggests that the issue with the traditional career model is down to the difference in the value provided to the organisation, and in the cost of compensation and of training and development provided to the employee, over time (see graph).

    The first problem here is that other organisations will poach your staff during the period in which their value is higher than their received compensation.  The second problem is that the model only works if you can accurately predict how many people you need in the future – and if you don’t know what your business is doing in 6 months time, , if planning is irrelevant and responsiveness is all that counts, how can you predict what talent you need 3 years ahead.  This is why, whereas all organisations used to support this model, now it only ‘academy organisations’ which do so. 

    So whereas it used to be that 9 out of 10 positions were filled through promotion, not 2 out of 3 are filled from outside.  This is also why, whilst tenure in firms is down, it’s up in organisations – people don’t get moved about so much any more.  And why re-engineering from 1981 was just about taking out the people who were recruited through ineffective planning (I think that last point’s pure rubbish actually).

    This means that the key questions for organisations are:


    Make or Buy?

    Cappelli suggests that most organisations should therefore hire on a just-in-time basis, only bringing in talent when the organisation needs it.  You may see inventory as useful in manufacturing but if talent is unused, sitting on the bench, it’s going to leave.


    Managing uncertainty, and the costs of being wrong

    Deciding whether to make or buy isn’t about long-term forecasting because these are terrible – it’s about simulations.  Integrating planning with simulations and clarity in assumptions brings HR into the front of the process not the end of the process.  Eg use scenario planning to help hedge bets about the future – to understand whether the 2nd or 3rd most likely outcome will provide something different (if so, the point forecast is useless).


    Making development pay off

    You can’t develop people because then they’ll be more attractive to competitors (I thought we’d trashed this argument decades ago!).    You can’t pay them for training because then you’re rewarding them twice.  So you might want to ask employees to cover their own costs of development (yeah right!).



    I have to say I’m not convinced.

    I certainly don’t think the difference between a pull and push model is the difference which makes the difference between Human Resource and Human Capital Management.

    My challenges include:

    • Recruiting talent when it is needed is a very reactive approach to something that should be driving organisational success.  Organisations doing this are never going to be able to compete on talent vs their more proactive competitors.
    • If you’re not paying people what they’re worth in the marketplace, then of course you’ve got problems.  This isn’t a problem in the model, it’s poor execution – and lack of alignment between your recruiting and reward strategies.
    • Plus you could focus on organisational capability and recruit the people who are core to this.  That’ll mean they’ll be more valuable to you than they will to their competition – so there’s even less chance of them being poached.
    • What works on the assembly line doesn’t necessarily apply in people management.  People aren’t widgets.  Excess talent doesn’t just sit on the bench in the manner of excess inventory.  Smart organisations and smart people will always be able to figure out value adding activities to undertake.
    • In fact, the very best organisations will be doing the very opposite of what Cappelli suggests.  This isn’t about being an academy organisation, but truly treating people as sources of competitive success.  Taking advantage of this opportunity is about finding the best people and bringing them into an organisation, knowing that they will create advantage for an organisation (eg job sculpting) rather than just plugging them into a particular hole in the organisation.


    Your views?


    Gary Hamel - the Future of Management


      Deep cyclical trends are transforming the world of business – they’ll force us to change, like it or not, how we manage, organise etc.  We need to ask, ‘what is it in our organisation that most limits our success over the next few years?’

    And we need to think about how we change the way we manage - think of it as a social technology.  Including: planning, budgeting, allocating, measuring, evaluating, organising, controlling, structuring, motivating, rewarding, training, hiring.

    One of the most important changes is what’s been happening on the internet, with RSS, blogs, hacks, podcasts.  This is driving change everywhere, whilst management is moribund.

    Executives understand how web will change their operating model.  Some industries are changing their business model.  But there’s little sense yet how this will change way we manage.

    The way we think about management is going to change dramatically.  Imagine you’re a CEO of a new company.  You’ve taken $5m in venture capital money, and are the majority shareholder etc.  You want to grow your little seedling into a giant global company and have to put in place an operating model.  You’ve got a clean sheet of paper, no constraints.  How different will those systems be compared to those that predominate in the organisation you’ve just left?

    Can you image alternatives radically different to managerial status quo?  What about giving employee right to say no to any explicit request.  Everything on this list being done right now in a progressive, successful company:


    Management as we know it has barely changed in out lifetimes.  McGregor published the Human side of Enterprise (Theory X, Y etc) in 1960.  50 years later we’re still having same bloody debate.  We can dream, but have a hard time imagining.

    We can plot the evolution of management – following a classic S curve - 1860 to 2010: Edison, Taylor, Sloan, McGregor, Deming; pay for performance, job design, financial reporting.  All of this stuff was invented before 1850 (US Civil War).


    A manager from the 1960s would be surprised by the complexity of the global economy.  But there’s a lot they would find similar: decisions from top etc.  Resource allocation works way it always did, modelled on Soviet system.  Why is this stuff in place?

    We’ve solved the really tough problems in management.  But, however uninspiring organisations are, is this the best we can hope for?  The other hypothesis is that we’re all unthinking prisoners of handed down beliefs.  We haven’t taken the time to examine them.

    Companies are being managed by ex CEOs and management thinkers who are long dead – their edicts from history are governing the way we do things in our organisations today.

    We can change it now as much as it changed in the adolescence of the 20th century.  We need to put management in the dock – what has it accomplished?

    It’s helped us break things down, do things in repetitive steps, but we’ve lost flexibility etc.  It’s helped raise productivity but limited adaptablity.  It’s conquered complexity but squashed imagination.

    Companies that will win in the future will be those that innovate their management models faster, in a way that unleashes the creativity of their people

    The first thing is that we need a genuine sense of urgency.  Not just talking about people as critical human assets.  We have to believe it and convince other people of this fact.

    We need a way of re-inventing the managerial plumbing in our organisations.  Every organisation has transformed their business processes through reengineering, outsourcing etc.  We need the same level of investment in transforming our management processes

    The challenge to management innovation is that change itself has changed.  So new innovations will need to respond to:


    1. Staying relevant in a world of accelerating change

    Our organisations were never built to operate in this sort of world.  What things have been moving at an exponential pace? - CO2 emissions, internet bandwidth, knowledge itself etc.

    No organisations can cope with things changing at this pace.   Today’s earnings a poorer predictor of tomorrow’s earnings.  The world is becoming more turbulent faster than organisations are being more resilient.

    We often need huge crisis before things change.  We used to see companies that were dinosaurs, now whole industries are being left behind.  Eg IBM 1990 to 1997 moved from being a product to a service company.  They needed to pick through the fossilised beliefs of executive team.

    There are two kinds of stories.  the first is stories about change at the margins – moving to an adjacent product category etc – but no change in overall beliefs.  A Zimbabwe model of change.  Changing automatically, spontaneously, reflexively – like the reaction of our pupils when see someone attractive.

    the second is like Google.  Bold aspirations – understanding what you are doing now is never going to be enough.  70/20/10.  Eg implementing a 60:1 span of control – you can’t manage in any traditional way with this span.  Small, self-managing teams – every little team has its own website.  Transparency – peer to peer feedback.  Use this to decide which projects go forward and which wont.


    2. Making innovation everyone’s job every day

    How many people have you trained as management innovators?  You can’t waste this innovation capital down there

    Does every single employee have access to database of innovations – every bit of data that might inspire them to think differently?

    Is it easy to get the time and cash you need to develop your ideas?

    Does your company track your innovation performance, and does it influence your compensation?


    This is important because these are the things which will drive the future.  Some companies know this.  Eg WL Gore in industrial products.  Never in 50 years have they had a loss.  They asked, how do I build a company where people spend all of their time innovating, and none of their time struggling against the bureaucracy?

    The first answer is about being a lattice, not a hierarchy.  People have no business cards, no boss – just a mentor – who will help you find the right team – but the team has to invite you.

    And secondly, not having any titles but plenty of leaders.  And you get to be a leader when someone asks you to be a leader.  If you call a meeting and people show up it would be a good sign!

    All commitments are voluntary.  You can’t tell someone what to do – you have to convince them.  True leaders have no positional power, no sanctions.  Otherwise you’re really talking about bureaucratic control mechanisms.  Gore want to find natural leaders and created an environment in which they can emerge.


    3. Dramatically raising the returns on human capital


    4. Moving on from offshoring, outsourcing, contract manufacturing, industry consortia, consultants commoditising knowledge etc

    We’re now in a creative economy – need relationships for conduit of knowledge or learning.  Innovating inn new ways is extraordinary valuable in this economy.

    And example is HCL Technologies – employees first customers second.  They told their customers you are not #1 for us – and their share price when down the next day.  They’ve implemented reverse accountability – employees rate their boss and their boss’ boss.  There’s a whole parrallel organisation – a virtual currency – people buy time of their colleagues.  And they pay their bonuses in advance – trust pay – they trust people to do what they need to do to meet their bonuses.


    How do you become a Management Innovator?

    Richard Florida suggests its perhaps about creativity and organisation:

    1. Kindle a passion for working on problems you don’t yet have solutions for

    Too often we only want to do something when there is a users manual.  This is about being a follower not a leader.  Innovators need to be willing to go after something big and tough.  Small and piffling problems lead to S&P solutions.

    Inspire people bring all of themselves to work every day.


    2. Question beliefs – are they habits?

    Write your core beliefs - what do people really believe?  Many beliefs are deeply suspect eg strategy making starts at the top, freedom and discipline are trade-offs (there’s discipline at Gore – 20 of your peers do an evaluation - not 360 because it’s not up and down – this is used to put people on a bell shaped curve – and this drives compensation).

    These are just habits, old assumptions – people can’t imagine an alternative.


    3. Get out on the fringe – innovation isn’t starting in the Fortune 500 with a few rare exceptions

    Look at art, fashion, music.  Look at the enormous feats of management without management, organisations without organisation.  Look at the social revolution on the web.

    Many organisations institute creative apartheid.  This compares to democratised management innovation on the web.

    What tools are we giving to are people to innovate?


    4. Be willing to experiment

    Create communities of passion.  As managers, we don’t think about experiments – change it big.  We talk about pilot – when 90% is already sorted.  Experiment – we don’t know what.  Accept this may blow up in our face.  Be radical and prudent. Evolutionary and revolutionary.

    Use the Wisdom of Crowds eg prediction markets for Best Buy sales - traditional forecasters 93% right but this broader group 99.9% right.  All for a $100 gift card.  It’s now driving whole decision making and spawning a whole series of small incremental improvements.

    How many other decisions are made at the top?  We need to tap more broadly the wisdom of this group.


    We are lucky to have this moment in front of us.  Crisis brings old problems into relief.  We need to out-adapt and out-inspire.

    Industrial revolution pioneers were working against the grain of what it means to be human.  We’ve turned people into machines.

    We’re trying to do something different.  People are already adaptable, enormously innovative, born to create.  Somehow we’ve produced organisations that are less adaptable and innovative than the people inside them.

    Orgs Our organisations are less human that we are!

    Wednesday, 11 March 2009

    HR Zone update


        I've just started a regular series of updates from the HR blogosphere on HR Zone.  Take a look at the first update here.  (I state in the update that... but actually, I hope it may encourage more HR practitioners to become regular readers, listeners and participants in social media as well).


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    Wednesday, 4 March 2009

    My interview on the Cranky Middle Manager


        I've been interviewed on Wayne Turmel's podcast, the Cranky Middle Manager, talking about HCM, the difference to HRM, and trying to persuade Wayne that despite its clunkiness, the term HCM is worth using (I didn't succeed!).

    Sorry for the sound quality on this.  I had some problems with my phone line in the earlier Talking HR shows and am frustrated that they seem to have returned here.  But as always, Wayne does a good interview, so turn up the volume and see what you think (if you're still having problems listening, I'm going to write a post distilling the main points I discussed with Wayne, ie the main differences between HCM and HRM, so come back for this again soon).


    Wayne's show notes:

    0:00 No matter how you say it, welcome to the show. Today we finally tackle one of my least favorite terms, Human Capital with a very smart guy who uses it a lot, Jon Ingham. This episode is dedicated to Khosrow 1 of Persia... all the traits a manager should have….delegation, communication and the restraint to only kill the family members that really have it coming. Oh, and a shameless plug for our upcoming webinar course on How To Create and Manage a Remote Team.

    4:03 The quote of the week is from my boy Michel de Montaigne . Poverty of mind…. open up your mental wallets and let us pour the smarts in, gang.

    4:50 Jon doesn’t get out much if this is exciting for him but we’ll take it. Elephant in the room time: the term Human Capital makes me crazy. Why shouldn’t we hate it? Even Jon doesn’t use it in front of civilians. Basically, Human Capital is the OUTPUT people create from their work.

    11:11 What’s the difference between organizations that look at human capital vs organizations that just use them as resources? HR tends to rely on best practices, HCM starts to lead organizations to more innovative solutions.

    15:05 What does this all mean to us as managers? People management becomes even more critical- oh thanks a lot.

    18:06 I go on a bit of a rant about how the manager’s job is getting tougher and no one seems to have it figured out. Is it easier to think differently in other countries where there isn’t an established way of doing things or is everyone flailing about equally?

    25:41 Jon has his own international podcast on BlogTalk radio. Listen to Talking HR here



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