... but you need Leaders of Choice to retain them.
Companies believe that becoming an Employer of Choice (EoC) will somehow help attract and retain talent. Unfortunately, only 50% of this hypothesis is true.
It is fairly well established that EoC status helps attraction. Your unsolicited applications will climb by over 40%, your brand image in key talent catchments will improve, and your ability to pull in better people (conversion rates) will see an uptick.
But what confounds companies is that attrition rates prove to be far more stubborn. In fact, with some companies who win such awards, competitors start targeting their people more actively, leading to temporary increases in attrition.
The reality is that 'people join companies but leave managers'. We have known this to be true for decades. The new EoC brand campaign that you just funded will not impress the people who already work for you. What they need is not an EVP statement but better managers / leaders to work with.
What are you doing about that? How many of your people leaders would qualify as 'leaders of choice'. We know that 'leaders of choice' do 5 things exceptionally well :
1. Talent scouting - they regularly network inside the company and across several external communities and scout for good talent. At any given time, they will be able to build a list of people they know that we should be trying to hire.
2. Relationships beyond the team - they are constantly building deep and personal relationships with talent in their team as well as outside. They maintain long and meaningful relationships with subordinates they may have managed a long time ago but have moved on to do other things. They are sought out by young employees as coaches / mentors.
3. Creating authentic and trusting environments - these leaders are able to create open, transparent, authentic and trusting environments at work. They behave in a consistent and open manner, actively seek and provide feedback and are quick to admit mistakes. They talk straight, have clear views on issues and will 'tell it as they see it'. As an employee you will always know where you stand with these leaders.
4. Bias for development - they bring a bias for development over utilization. What this means is that they see their primary role as a leader in developing employees to be the best that they can be rather than simply utilizing employees for their own success. They take this role very seriously ... often being tough on employees who are not performing at full potential.
5. Personalizing the organizational brand - these leaders spend less time making presentations to employees on values , mission etc. and more time on 'living' these values. Over time, these leaders are seen as living examples of the companies values.
Do you have enough of these leaders in your organization?
If you don't, I suggest you take some of your budgets for the 'Employer of Choice' brand campaign and use it to build 'leaders of choice'.
Game for the switch?
Thursday, August 14, 2008
Tuesday, August 5, 2008
Living dinosaurs - the Galactic Headquarter
... or why American companies are losing the plot on global growth.
If you have worked for any American company that operates in more than 2 and a half countries, you will likely know about this thing called THE GALACTIC HEADQUARTERS (GHQ), sometimes endearningly referred to as the MOTHER SHIP.
Once the symbols of American economic dominance on an unsuspecting world, these GHQs are characterized by a number of equally intriguing quirks.
1. The one horse town : Often set up in out-of-the-way towns in the US as a sprawling campus of mind-numbingly dull, low rise buildings, these galactic centers defy location logic. Here are a few examples
Walmart has 2,100,000 employees. Bentonville has a population of 32,000
IBM has 390,000 employees. Armonk has a population of 3,461 (really!)
P&G has 138,000 employees. Cincinnati has a population of 332,458
Dell has 88,200 employees. Round Rock has a population of 61,136
Motorola has 66,000 employees. Schaumburg's population - 75,386
Funny how American companies routinely expect senior leaders to take bold strategic decisions on global growth and innovation sitting light years away from real life, real consumers and real markets.
2. Obsession with internal stuff - Almost as a natural extention of their Martian surrounds, these GHQs are often obsessed with matters not even remotely related to the real world of competitive action. Staffers consume gallons of coffee and terrabytes of computing power trying to make sense of a global business through the lens of centralization, consistency and compliance. Data rich and insight poor, these GHQs spend enormous time drawing out fairytale strategies, policy papers, process-charts and implementation roadmaps that have little relevance to what goes on in the real world.
3. The diverging realities - Over time, the GHQ staff begin to see 'field staff' as unruly children, in dire need of discipline and order. Without corporate policy guidelines, they surmise, these little kids would run off and 'do their own thing' - the GHQs worst nightmare.
Managers in the field, in return, inevitably start viewing the GHQs as a necessary nuisance and a sleeping giant - not to be disturbed from deep slumber unless absolutely necessary. Soon, there are 2 realities - the market realty known only to those in the market and the GHQ reality - relevant only in a dingy meeting rooom somewhere in small town America.
4. One size fits all - Most GHQs, over time, have come to believe in a very dangerous premise. What works in the world's largest economy must, eventually, work everywhere else. If, by any chance, there is a doubt cast from some lowly field manager in a third world (wonder why there's no second world) country, it must be because his limited intelligence cannot grasp the 'big picture' view of GHQ.
To most of us who live and work in the real world it is clear that the all-American GHQ is a dinosaur waiting for a meteor shower.
Interestingly enough, the process has started already.
- A major FMCG major has decided to spread its senior leadership team in multiple locations around the world - one in the US, one in Europe and one in Asia.
- A leading global bank has broken its headquarters into 2 parts - one in London and the other in Singapore.
- A retail major has shifted all its governance for emerging markets to Brazil and China - a much smaller GHQ handles only the US business
- A leading consulting firm recently announced the end of its corporate HQs, instead choosing to locate its global Chairman in the Middle East, CEO in NY and other senior leaders in various offices around the world.
I can go on, but you get my drift. American companies are slowly waking up to a new world where 'one size does not fit all'. A multi-polar world where diverse and distributed leadership is the only way to succeed. A world where decisions need to be taken now, not later, and leaders need to stay connected to the real world of business.
It will be interesting to see how many American companies have heard the alarm go off.
If you have worked for any American company that operates in more than 2 and a half countries, you will likely know about this thing called THE GALACTIC HEADQUARTERS (GHQ), sometimes endearningly referred to as the MOTHER SHIP.
Once the symbols of American economic dominance on an unsuspecting world, these GHQs are characterized by a number of equally intriguing quirks.
1. The one horse town : Often set up in out-of-the-way towns in the US as a sprawling campus of mind-numbingly dull, low rise buildings, these galactic centers defy location logic. Here are a few examples
Walmart has 2,100,000 employees. Bentonville has a population of 32,000
IBM has 390,000 employees. Armonk has a population of 3,461 (really!)
P&G has 138,000 employees. Cincinnati has a population of 332,458
Dell has 88,200 employees. Round Rock has a population of 61,136
Motorola has 66,000 employees. Schaumburg's population - 75,386
Funny how American companies routinely expect senior leaders to take bold strategic decisions on global growth and innovation sitting light years away from real life, real consumers and real markets.
2. Obsession with internal stuff - Almost as a natural extention of their Martian surrounds, these GHQs are often obsessed with matters not even remotely related to the real world of competitive action. Staffers consume gallons of coffee and terrabytes of computing power trying to make sense of a global business through the lens of centralization, consistency and compliance. Data rich and insight poor, these GHQs spend enormous time drawing out fairytale strategies, policy papers, process-charts and implementation roadmaps that have little relevance to what goes on in the real world.
3. The diverging realities - Over time, the GHQ staff begin to see 'field staff' as unruly children, in dire need of discipline and order. Without corporate policy guidelines, they surmise, these little kids would run off and 'do their own thing' - the GHQs worst nightmare.
Managers in the field, in return, inevitably start viewing the GHQs as a necessary nuisance and a sleeping giant - not to be disturbed from deep slumber unless absolutely necessary. Soon, there are 2 realities - the market realty known only to those in the market and the GHQ reality - relevant only in a dingy meeting rooom somewhere in small town America.
4. One size fits all - Most GHQs, over time, have come to believe in a very dangerous premise. What works in the world's largest economy must, eventually, work everywhere else. If, by any chance, there is a doubt cast from some lowly field manager in a third world (wonder why there's no second world) country, it must be because his limited intelligence cannot grasp the 'big picture' view of GHQ.
To most of us who live and work in the real world it is clear that the all-American GHQ is a dinosaur waiting for a meteor shower.
Interestingly enough, the process has started already.
- A major FMCG major has decided to spread its senior leadership team in multiple locations around the world - one in the US, one in Europe and one in Asia.
- A leading global bank has broken its headquarters into 2 parts - one in London and the other in Singapore.
- A retail major has shifted all its governance for emerging markets to Brazil and China - a much smaller GHQ handles only the US business
- A leading consulting firm recently announced the end of its corporate HQs, instead choosing to locate its global Chairman in the Middle East, CEO in NY and other senior leaders in various offices around the world.
I can go on, but you get my drift. American companies are slowly waking up to a new world where 'one size does not fit all'. A multi-polar world where diverse and distributed leadership is the only way to succeed. A world where decisions need to be taken now, not later, and leaders need to stay connected to the real world of business.
It will be interesting to see how many American companies have heard the alarm go off.
Sunday, August 3, 2008
Talent is not an asset ...
... no matter what corporate propaganda may suggest.
Talent, in the corporate context is, by definition, not an asset. It is, however, in some other fields like the English Premier League.
In the EPL, if you 'buy' a player, you are entitled to a specific (negotiable) sum of money if another team was interested in 'buying' the player during the period of the player's contract with your team. In other words, as a team, you have some 'ownership rights' to the player and can claim some value in transferring these 'ownership rights' to another team. As the contract progresses you can 'depreciate' the value of these rights just like you are likely to do for any other asset on your books.
In the corporate world, however, you do not have any such 'ownership rights' in most cases. An employee is only liable to give you a fixed period of 'notice' before he / she moves to another organization. The receiving organization need not pay any 'transfer fee' to you. Only in rare cases, where the employee is serving a mutually agreed 'bond' with your organization, any such payment can be in play.
In most employee contracts, there are no 'ownership rights' for the organization. There is no 're-sale value' for the employee's membership. There is no 'transfer fee'. In accounting terms, therefore, the employee is a fully depreciated asset from day one. In other words, the employee is not an asset at all.
If you take the same argument forward, you will realize that organizations rent talent, pay a monthly rental (salary), some annual rental adjustments (bonus / increment) and that's that. So where does the asset argument come about?
The asset argument holds water only if you look not at the employees themselves but what they help create. The intellectual property created by a talented team of employees can be categorized as an asset (with ownership rights and re-sale value), just like the customer relationships (customer capital or goodwill) that can be created by specific employees over a period of time.
In other words, we need to start figuring out the asset value of relationships, ideas, processes, products and technologies created by employees in order to fully understand the value of our talent pool. Some organizations do this quite well. It requires some discipline around defining a number of different asset classes, creating a valuation technique that is simple yet fairly accurate, and then ensuring there is the requisite technology in place to link this back with individuals or teams of employees.
That way, you may be able to figure out that John Doe in IT has created $2.3 million of new asset value over 3 years of his membership in your company, while Jane Tan in Product Development has created $4.1 million in the same period.
Over a period of time, managers of John and Jane will be able to appreciate that simply measuring the number of training hours of John and Jane or other such measures of input investments is not an accurate indicator of the notional asset-generation value of John / Jane. It is only when we start assigning values to what they help create, do we start treating John and Jane as asset-generators, a label that is much more in line with the nature of employment in corporates.
So, as a manager, do you have any idea of who the most significant asset-generators in your team are? What are you doing to make sure that their ability to generate more valuable assets for the company increases every year (hopefully much faster than their rental costs / salaries)? Do you recognize (at least qualitatively) the value of assets generated by your team members? Are you able to position the asset-generation value of your team appropriately to others and with-stand the glare of corporate scrutiny?
Time to rethink the way you look at your team and what they do?
Talent, in the corporate context is, by definition, not an asset. It is, however, in some other fields like the English Premier League.
In the EPL, if you 'buy' a player, you are entitled to a specific (negotiable) sum of money if another team was interested in 'buying' the player during the period of the player's contract with your team. In other words, as a team, you have some 'ownership rights' to the player and can claim some value in transferring these 'ownership rights' to another team. As the contract progresses you can 'depreciate' the value of these rights just like you are likely to do for any other asset on your books.
In the corporate world, however, you do not have any such 'ownership rights' in most cases. An employee is only liable to give you a fixed period of 'notice' before he / she moves to another organization. The receiving organization need not pay any 'transfer fee' to you. Only in rare cases, where the employee is serving a mutually agreed 'bond' with your organization, any such payment can be in play.
In most employee contracts, there are no 'ownership rights' for the organization. There is no 're-sale value' for the employee's membership. There is no 'transfer fee'. In accounting terms, therefore, the employee is a fully depreciated asset from day one. In other words, the employee is not an asset at all.
If you take the same argument forward, you will realize that organizations rent talent, pay a monthly rental (salary), some annual rental adjustments (bonus / increment) and that's that. So where does the asset argument come about?
The asset argument holds water only if you look not at the employees themselves but what they help create. The intellectual property created by a talented team of employees can be categorized as an asset (with ownership rights and re-sale value), just like the customer relationships (customer capital or goodwill) that can be created by specific employees over a period of time.
In other words, we need to start figuring out the asset value of relationships, ideas, processes, products and technologies created by employees in order to fully understand the value of our talent pool. Some organizations do this quite well. It requires some discipline around defining a number of different asset classes, creating a valuation technique that is simple yet fairly accurate, and then ensuring there is the requisite technology in place to link this back with individuals or teams of employees.
That way, you may be able to figure out that John Doe in IT has created $2.3 million of new asset value over 3 years of his membership in your company, while Jane Tan in Product Development has created $4.1 million in the same period.
Over a period of time, managers of John and Jane will be able to appreciate that simply measuring the number of training hours of John and Jane or other such measures of input investments is not an accurate indicator of the notional asset-generation value of John / Jane. It is only when we start assigning values to what they help create, do we start treating John and Jane as asset-generators, a label that is much more in line with the nature of employment in corporates.
So, as a manager, do you have any idea of who the most significant asset-generators in your team are? What are you doing to make sure that their ability to generate more valuable assets for the company increases every year (hopefully much faster than their rental costs / salaries)? Do you recognize (at least qualitatively) the value of assets generated by your team members? Are you able to position the asset-generation value of your team appropriately to others and with-stand the glare of corporate scrutiny?
Time to rethink the way you look at your team and what they do?
Subscribe to:
Posts (Atom)