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Tag: W. Edwards Deming

Talent: what REALLY matters

By Geoff Callard


The ‘Talent Management’ industry is a recent phenomenon – and it does not bear up under scrutiny.  There is no evidence to suggest that it helps organisations succeed and it ignores the need to take a deeper, systemic look at the best ways to develop people into consistently high performers.  As authors Pfeffer and Sutton declare in their book, Hard Facts, Dangerous Half Truths and Total Nonsense there are ‘…too many business adages…built on flimsy information, miracle cure hype and flawed thinking about best practice…’.   Talent Management is one of these.

We are all Biased

Talent Management is a multi-million dollar industry entrenched in most large corporate HR departments. People’s careers are built around it and those who need it to succeed are very likely to be subject to the very human biases that blind them to evidence that contradicts the fallacies that their industry is built on; that individual ability is largely fixed and invariant; people can be reliably sorted based on their abilities; and the context and the system in which they do it in is less important than individual talent.

In his book The Black Swan, Nassim Taleb summarises these biases’.  They include:

  • A Confirmation Bias in which we have a rule in mind that we then use to select examples to support an hypothesis
  • A Narrative Bias with which we fool ourselves with stories that cater to our desire for patterns in order to simplify and understand the world
  • A Remembering and Causality bias in which we more easily remember the ‘facts’ that support the outcome we have invested in and neglect the ‘facts’ that do not.

We are, of course, all susceptible to these biases.  It is part of human nature to filter that which we perceive to fit our world view and we are driven to find patterns and simplify the world in order to survive. ‘Talent Management’ is just one of the areas where we have ignored actual evidence in order to justify our actions.

Talent is not Fixed

‘Talent’ in the workplace is dependent on context, i.e. the support of the surrounding system, self-belief and effort.  High performance is more a function of having access to the right information and tools, than it is on a set fixed of attributes that are then treated as predictors of performance.

In addition, repeated studies show that abilities improve markedly when people believe they can get smarter. In other words theories of performance and ability become self-fulfilling. Talent it seems is far more malleable than we are led to believe.

The Flaw of Category Based Associations

In Situations Matter, Sam Sommers explains how we unwittingly view the groups with which we associate quite differently to those with which we are unfamiliar.  This book is a powerful reminder of how much context influences us in everything we do and it is not surprising that this is reflected in how we recruit into our organisations.

Put in behavioural terms, entrenched beliefs will cause perceptual bias regarding talent and performance. Sommers sites two examples relevant to the misguided notion that we can recruit ‘talent’.

The first is a University of Chicago and Harvard Study: ‘Are Emily and Greg More Employable than Lakisha and Jamal?’ in which 5,000 resumes were sent out. Using birth records the researchers gave half the resumes white-sounding names and the other half black-sounding names. They set up separate voice mail boxes for their black and white fake applicants and found that it took 50% more black applicant resumes to get a call back.  Why?  Sommers concludes that with the pressure of successive judgements to be made with little opportunity to scrutinise, our pre-existing (and often sub-conscious) default associations make a big difference.

In a similar Princeton Study white participants were asked to interview students (one white, one black) for an academic team contest. The researchers found that they spent 33% time longer with white candidates and were generally more engaged and communicated with greater warmth and confidence. The interviewers were ‘normal’ but their behaviour changed to create a different experience for white and black candidates.

In a second study one set of interviewers were trained to replicate the experience of the white interviewees; sitting close, taking more time, being more engaged, and so on.  The interviewees assigned to the ‘engaging’ interviewers consistently outperformed.  Watching the playbacks Sommers concludes that one would be convinced that that group were just a more qualified, impressive and interpersonally savvy group of people. So much for recruiting for talent.

Category based associations make a significant difference.  We are not as fair-minded as we think we are.


It’s All About the Environment

Bob Kierlin, co-founder of Fastenal, a US-based industrial supplies company, sums it up in Keith McFarland’s book The Breakthrough Company.  He says; ‘We started by believing in what people could do.  Then we figured out how to create an environment where ordinary people could do extraordinary things’.

As McFarland says, this is less about ‘getting the right people on the bus’ and much more about ‘creating a bus worth riding on’. Creating an environment that helps ensure people will succeed based on a carefully and precisely defined business model, access to the right resources and an infrastructure that supports their work is what leads people to achieve high levels of performance. In other words great systems are more important than great people.  This is precisely what W. Edward Deming was demonstrating more than 50 years ago when he ascertained that if there was a business problem, 9 times out of 10 any improvement required a change to the system not the people.

NASA is an unfortunate and regularly-cited example of how poor systems will override good people.  Seventeen years after the Challenger tragedy the Columbus Space Shuttle broke up upon entry back to earth killing all seven astronauts.  The subsequent Columbia Accident Investigation Board investigation concluded; ‘…cultural traits and organizational practices detrimental to safety were allowed to develop…’, citing ‘…reliance on past success as a substitute for sound engineering practices…’ and ‘…organizational barriers that prevented effective communication of critical safety information…’.

Tragically even though the people were different the system was not, producing a similar outcome to that seen seventeen years earlier.

Equally compelling is Boris Groysberg’s study of ‘star’ Wall Street investment analysts.  In his book The Myth of Talent and the Portability of Performance he traces the performance of thousands of star analysts who change firms. His research showed that they suffered an immediate and lasting decline in performance and that their earlier excellence appears to have depended heavily on their former firms’ resources, organizational culture, networks, and colleagues.

So why do so many companies put so much emphasis on ‘recruiting talent’ and so little on building and sustaining great systems to drive systemic high performance?  Is it partially due to our glorification of rugged individualism and reluctance to credit a systemic approach when things go right?  Is this another blindness that pervades the ‘talent mindset’; a tendency to over-attribute success and failure to individuals?

How do the Really Good Businesses ‘Manage Talent’?

It seems that the truly great businesses believe everyone is capable of the highest performance and focus on developing systems that makes it possible to turn that belief into reality.  They understand that hiring people with the right attributes is difficult not least because the right attributes today may not be what is needed tomorrow. McFarland’s research in The Breakthrough Company shows that the consistently high performing businesses ‘hire attitude and build aptitude’. A large part of the ‘talent’ equation has nothing to do with the way the ‘talent management industry’ says it works.

The old fashioned and unfounded virtues of hiring people of character and spending time and effort developing a supporting system that allows those people to develop into consistent high performers is what we should be focusing on.  The sooner the myth of talent management is disassembled and organisations focus on what really makes a difference, the better.

The unravelling

This article was first written at the height of the GFC – we have not advanced much since then.

This blog is about the state of work – often a sorry state of work. When times are tough, as they presently are, we are more protective of work: as employees of the jobs we have; as employers, the jobs we make available. Perhaps in adverse times we become more aligned, united in our efforts. Otherwise employment is an undeniably a relationship of conflict: about money, about rights, about being a worker with human needs and issues. And if employment is relationships between the interests of different parties, then the employment system is aimed at mediating between power and rights between workers and employers, thus, we have not resolved the employment conflict, we have made it mainstream. Many will disagree. We have heard all the objections before. We know many protesters will be from the human resources fraternity. After all, their programs and processes are designed to create harmonious, productive workplaces: finding “right” people, ensuring feedback is provided, careers are available, development is promised, people are “retained”. We don’t mean to sound cynical but the happily aligned workforces are those often relentlessly policied, programmed and filtered to the point that they are sanitised of individuality.

I am not anti-employer, nor anti-human resources (HR).  I also see employees who cause all manner of headaches to their employers and colleagues: bringing to work a sense of entitlement, an expectation that they are there as a right, contributing angst, uncertainty, and complying with workplace expectations if not with grudging, feet-dragging unwillingness, then selectively. What I am saying is that the current method of employment is inadequate and unsustainable. Unsustainable because the willingness of workers to be subjected to autonomic organisations’ decision-making agenda and abilities, and the potential for uncertainty, lack of fulfilment and demands that cross reasonable work/life boundaries, is waning. Inadequate because the resource/productivity mentality of the industrial age does not cater for the many ways that people can work. We are used to putting values on, say, a salesperson with a 300-customer database, but what about a person with no sales experience but with a following of 3000 (interested, potential customers?) on Twitter?

The cracks in employment have been showing for a very long time. Unemployment and underemployment, skills and labour shortages are problems in the labour force that have yet to be resolved. In the workplace rates of burnout and stress are on the rise from the ever-growing number of causes: overwork and under staffing, or being over-managed by the under-skilled, or the lack of variety and stimulation, or the need for on-demand availability from access to mobile phone and technology, or the erosion of confidence and esteem from people or systems that intimidate, bully, harass, or systems that cannot cope with the demands on them. The thing is people do want to work as much as they have to work. They just want to work in a way that suits them as humans, not in the way that organisations subject them to work. The irony is that for all that organisations and people are basically similar in their desire to achieve, to succeed, to engage and to meet challenges, the current system of employment is more likely to accede differences than build on similarities. People get it that organisations need to be, to one extent or another, commercial or entrepreneurial. What they want is an open dialogue about the environment in which this occurs and they contribute. When HR becomes involved, the opportunity for this dialogue diminishes. HR, an advocate for management, weights the flow of dialogue top-down rather than two-way. Further, commerce and business are not the common language of HR, so its ability to facilitate shared concern for the success of the enterprise is often limited to generalities without the specifics of data and metrics, strategy and analysis. This is less a reflection on the intelligent, professional, dedicated people who work in HR, it is just the nature of the profession and the way HR is educated.

Some of the problems with employment can be explained by its history. The late 1800s to early 1900s was the golden age of industry. Wealth shifted from the land-backed class to those who controlled resources – the mines, forests, factories, and populations shifted to towns to take up the demand for mass employment. Employment law is at its roots part of family law originating in the old English feudal relationships of master-servant, where the master had the right to control the servant for the benefit of the master.

As great wealth became available following the advent of machinery, great conflict ensued with strikes each year involving millions of workers throughout the industrialised nations around the world often turning violent even deadly. Workers fought against work conditions which were often inhumane, the use of child labour and working six and seven days a week and days up to 16 hours long. Demands for an eight-hour day, increased daily wages, sanitary working conditions and safer conditions usually resulted in compromise until the world-wide spread of the “human movement”.

Thus the interest of this blog is to share what we do, the lessons we learn and the successes we achieve in our work. We begin by rejecting “human resources” as having found the solution for today’s workforce. Its practices may have once been appropriate, when people were a cog in the production wheel; today it is an oxymoron. “Resources” are assets by definition, “the property of a person or corporation, a thing of benefit to its possessor”. Notwithstanding that an organisation might appease some by calling people their “greatest” asset, employment is a process that causes people to be treated like a resource for the corporation’s purposes, capable of being bought, sold, hired, used and disposed of in line with its plans to achieve wealth or revenue. The human is not the resource, it is their skills, ideas, networks, time, experience and so on. No wonder people so often feel used – they have been. As the late, great management thinker, Peter Drucker, wrote in the Harvard Business Review February 2002, “They’re not employees, they’re people”.

This all makes sense, again looking at history, because the success of the early firm depended on productivity, that is the most efficient and effective way to produce as much as possible as cheaply as possible. From F.W. Taylor (scientific management to increase industrial efficiency c. 1900s) to W. Edwards Deming (post-World War II inventor of Total Quality Management) organisations have sought ways to increase productivity. As competition intensified and demand plateaued, corporations have sought to differentiate themselves, through service, unique features, niche offerings, or other value-add. “Looking after employees” became a priority. Not only was the employee trained in the organisation’s way of doing things, they were often part of the customer service. The loss of their knowledge and relationships was a disadvantage to the firm, and worryingly could be used by a competitor. More specialised skills and knowledge vested into positions also meant a greater cost of replacement. Unfortunately for productivity, employees are unwilling to commit to firms who are not prepared to give loyalty, but think it can be bought (“retaining employees”, they call it). So organisations continue to base employment on productivity-based models and buy loyalty.

To spell this out further, a productivity-based model is one that develops specifications for production output at a certain cost. In human resource terms we might call them job descriptions and KPIs (key performance indicators). We refer to the production-based organisation as “linear”, that is, sequential (i.e. process x follows process y;) and standard HR processes are designed in the same way (ergo I feedback, you perform). For this “greatest asset” we offer incentives and rewards: promotions, bonuses, feedback, training. However, this is becoming unstuck if not because people – enter Generation Y who have no memory of being grateful for having a job – are demanding more “human” treatment but certainly because knowledge is the new “resource”, and knowledge cannot be conveniently measured.

Where the industrial revolution rewarded those who controlled the resources, controlling people as a resource only benefits the production part of an organisation’s offering. It might get the coffee made, but what about the smile, remembering the order of a regular, the conversation with customers? When we count wage costs, we know what we pay for labour but do not measure what the “people factor” costs. This part of “labour cost” – and it does cost – is where traditional employment fails most. The cost is frequently not monetary but we are so tuned in to the concept of “resources” we overlook the non-production costs. So what does this cost? Well the key “cost” is that employer must drop control. By “control” we do not mean having proper, diligent management, we mean the type of control, that as just one example, favours the few (those who are not a non-English-as-a-first-language speaker, a casual, a temp, too old, etc, etc.) in the name of “performance”.

“Dropping control” is a worrying concept for many employers. They constantly asks, “How do we stop them leaving? How do we protect our information? How do people know what to do without job descriptions?” And much more. But these controls are only illusions. People leave if they want, they take information with them, that they cannot “unknow” something when they leave, and who takes instructions from their job description anyway? An organisational infrastructure is the new people resource because it allows people to supply their efforts in the same way as, say, electricity powers a building. An organisation without a well-developed organisational infrastructure (OI) is inefficient because it allows the “leakage” of non-”productivity” efforts; we see trust, motivation, good will and other people qualities as no less valuable to a firm than a person’s labour for all their intangibility.

Employees should not be the source of instability and stress that it is for so many. It is enterprise that should be the common language of employees and workers with common goals and values and that in doing so both employers and workers alike take responsibility for and benefit from their ability and willingness to contribute.

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