Wednesday, June 23, 2004
Talent Management
I'm seeing a worrying trend at some large organizations. And it's not just confined to traditional organizations, but seems widespread at large consulting houses too and other service businesses. What is it? Lack of people... Sound crazy? Maybe I am - but it seems like everyday I'm talking to clients and leaders at large organizations who have a culture or change problem, or just a plain 'shorthanded' problem. Why - because the people who 'survived' the downsizing and cost cutting over the last few years, may not be the people who want to grow and change the organization.
Its one of those Pavlovian things - you incent certain behaviors and those are the behaviors that are going to stick, and it takes a lot of reprogramming to make new incentives work. Afterall we're talking about human beings here, not rats in a maze... So let's see - there were bubble times, where the 'creative' and up and coming types were perhaps involved in more risk taking things like incubators, venture units and intrapreneurship. Pop went the bubble, and the first to go were the loss making wild ideas :) Now, I'm not saying that was all bad, because the bubble did encourage a lot of 'dumb money' to enter the game, and many companies did do stupid things destroying any potential margins in new business areas. But it had the effect of tainting the people who worked in these areas and I'm sure they were the first to go. So who's left after those who were close to retirement, voluntarily or involuntarily, departed? The people who don't like to take risks, who embody the traditions of the company, and kept their heads down during the cost cutting. Now, most organizations incented these behaviors during cost cutting, and now suddenly enterprises are waking up to the fact that employees have retrenched and are probably feeling highly over worked and under valued. So let's pull the rug from out under these people, and try to change the culture, threaten them with offshoring and the need to grow... I hate to think of the consequences...
If as a leader in an organization, there is one message you should know and take to heart about leadership, it's that a big part of your job in good times and bad times is around managing talent (including yourself ;)). One of the first processes that get broken during reorganizations is the talent management process - and yes, I realize it's really hard to think about the future and encourage junior people to develop when you're dealing with which colleagues who've been with you for decades, need to walk. But if you don't - you're putting the organization into a potential death spiral, or at the very least, making it easier to acquire... And the same thing is happening at large consulting houses, so don't expect to be able to backfill from there either.
From the Executive Editor at ManyWorlds.com - the knowledge network for business thought leadership. Thoughts on the latest in management thinking, innovation and musings on the future of business.
- Name: Naomi Moneypenny
- Location: Houston, Texas
- Contact: Email me or call 832 242 3508
7 Comments:
There are many examples of organizations that implement cost-cutting, end up with a smaller, dissatisfied workforce, and run into all sorts of problems. For example, Analog Devices was one of HP's best suppliers before Analog laid off 12% of its workforce in 1990; after the layoff, it dropped to the bottom.
Great piece. I find the mainstream business media to be poor at drawing the kind of inferences you make here. For example, in one edition of the WSJ a feature on downsizing was just three pages from some demographic data supporting the 'vanishing workforce' statistics. Obviously we have the fallacy of composition argument at work here: what's true for the country overall isn't true for individual firms, yet it does strike me that there is a hole in the literature on this subject.
Kim Macdonald
It's a sad paradox that, when a company gets into trouble, the first people out the door are the ones the company will need the most to turn things around. Not just because of layoffs, either. The organization's "best and brightest" are the ones with the most career options, so when the time is right for them, they cash in their chips. They're also often the highest paid... and the most worried about being replaced by someone earning less. So when the time comes for a turnaround, the folks who are left are the lowest paid, least skills, and least motivated. And word has gotten out that taking a job at that company is a risk because they had a major layoff a year or two ago...
Check this thread:
http://www.attorneysnyc.com/forum/messages/4274.html
Its a spam link above, so just ignore it. I'm flattered spammers think my blog gets enough traffic to be useful to them :)
I came across your blog while doing research on talent management strategies. It's refreshing to hear many comments validating what my firm is currently going through...a reduction in staff, keeping the staff we hope will turn things around while changing the culture and expectations. It hasn't been easy but I'm keeping my fingers crossed...although I can definitely relate to what Brian had to say.
You comments are close to being right-on. One problem is that many in a leadership role have little understanding of what exactly is talent management. If they ask the HRD they will talk about training. What needs to be analyzed is:
Do I have the Right Person,
with the Right Competencies,
in the Right Place,
Doing the Right Things
Because so few leaders do this correctly most end up stepping over dollars to pick up pennies. and complain about the people. They may very well have or have had many of them. When an organization needs to streamline the correct solution should be rightsizing not downsizing or cost-cutting.
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