One of my least comfortable memories as an HR Director was presenting a new pay and grading system to my senior leadership team. My team had worked for months on it – and in my view, it was a thing of beauty.

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A few of the more traditional leaders I’ve worked with recently have complained about the younger members of their staff. They are upset at what they see as a reduced level of loyalty. In the old days, they say, we were like a family but the younger generation don’t seem to want or respect this. They are too quick to jump ship for another company or they lack the same level of commitment as the older members of the team. I’m not sure whether this is one of the typical generational stereotypes that often get thrown about or whether there is in fact a demise of the concept of our employer being a family. I really hope it’s the latter. We are not our employees’ family. We never have been. And that’s not a bad thing. It’s healthy.

For all of the nice stuff about being a family, the sense of belonging, the long term-relationships with colleagues we care deeply about, the loyalty and pride that we feel, there are several reasons why we should stop presenting the relationship with our employees in this way.

It’s dishonest

The thing about your family is that, even when times are tough, we don’t tend to get rid of them, even if we’d like to! We’re being dishonest when we welcome our employees to their new family because, if we have to – for financial or performance reasons – we’ll discard them. 225 million jobs were lost globally in the first year of the pandemic and whilst this will have been really painful for many company leaders, in the end, they still do it.

It’s unhealthy

Companies that present themselves as a family tend to engage in some practices that are unhealthy for both the company and the employee.

There’s a tendency to see a resignation as a betrayal. One boss I had didn’t speak to me for six weeks after I told him I was leaving. This is so short-sighted. Smarter companies recognise that people leaving is part and parcel of the employer-employee relationship and make it ok for people to do it. In fact, they go further than that. They nurture their alumni and ensure that they can come back – with new skills, fresh perspectives and experiences – that can add more value to both parties than if the person had stayed. Da Vita Healthcare, for example, regularly hire back people from their alumni. Around 15% of new hires have worked there before.

Conversely, it becomes a given that employees will stay with us, that long tenure is the ultimate goal. Think about what we celebrate. We give out awards or extra holiday for long-service, we monitor and reprimand managers with high churn rates, we devise retention schemes to keep people with us. Now of course, we should thank people for their loyalty. But equally, shouldn’t we prize those people who don’t stay forever? Who purposely limit their time with us because they value variety and new challenges?

I once worked with a guy who would only accept two-year contracts because he worried that if he accepted a permanent contract he would start to feel too settled and he would become wedded to his employer. He worried that he could become scared of the prospect of having to leave and find another job. And that this would drive unhealthy behaviours; that he’d be more concerned about clinging to his job than doing a great one. If we stop thinking about ourselves as a family where leaving isn’t ever talked about, we can have healthier conversations about the need to move on, to keep skills and mindsets fresh. Whenever I’ve worked with long-serving employees, there is always a high percentage of them who seem unhappy, resentful almost. Like an unhappy marriage where the couple are miserable but lack the confidence to leave. We need to have healthier conversations with our people about how leaving isn’t necessarily a bad thing. We should openly talk about a healthy average time in role to prevent the relationship getting stale. I love the LinkedIn concept of Tours of Duty, where it’s not just acknowledged that you won’t stay forever, but positively welcomed.

Whilst seeing our employer as our family has some negative consequences, I’m not saying it’s a relationship that should be purely transactional either. Of course, there should be warmth and kindness. But being kind is not about pretending there’s a job for life and avoiding difficult conversations. Kindness means having those honest conversations and being truthful about the relationship. I think the ultimate kindness we can show our people is to work with them to make sure they can remain employable in the future, with us possibly, but more importantly, somewhere else. Both the employer and the employee have a responsibility to keep their skills fresh, but more importantly, that they don’t see their future as interminably linked to us. We can work together to ensure they retain the confidence and the appetite to leave.

Our talent strategies are full of movement; plans to promote, to increase responsibilities, to rotate. We focus our energies on building skills and retaining our top talent. But rarely have I seen a talent strategy that tackles the biggest barrier to our talent plans – getting people to leave.

So, why do we need to encourage people to leave, or at least do something different?

Well, there’s a distinct possibility that they’ll get stale if they stay too long in role. They don’t become a poor performer, but their ability to innovate, challenge and refresh can become diluted.

Secondly, because our talent strategies rely upon having space at the top for people to move into. Waiting for someone to leave is frustrating when you’re ready to make that next move. And one of two things happen, our future talent finds promotion elsewhere or they start to get stale themselves – blocking career paths from their juniors in their turn.

Thirdly, we need a strategy to help people move on because it’s difficult to do. They have given their commitment, their time, their loyalty, and their departure should be handled with dignity and respect. What typically happens is that we tend to ignore the issue – until suddenly their exit is essential and urgent. Then we’re trying to negotiate with someone who’s scared, hurt and angry. We end up with bad feeling, disruption and of course, expensive severance pay-outs.

So, how can our talent strategy address this sensitive, but vital area? This short video looks at some options.

Many of our traditional views on how to manage talent are out of step with a disrupted and fast-moving world. We need a fresh perspective on what great talent management looks like. Here are five things that great talent leaders don’t do, that we might have admired in the past.

1. They don’t hold onto their best people

Running a talent review with senior leaders can be so painful. Their desire to hang onto their best talent rather than see them move to another Division is palpably obvious. I’ve heard them complaining that “it’s not quite the right time” or worse still, even talking down their team member’s ability to make them less desirable to their colleagues. It’s understandable given the way they are themselves are rewarded and recognised but also short-sighted. Leaders who proactively encourage their best employees to move across divisional lines are not only doing the company a favour, they become recognised as net exporters of talent and so will find being a magnet for future talent easier.

Now clearly, if your team are wanting to abandon you because you’re a nightmare to work for, then that’s not a good sign. But if you’ve created a culture where it’s ok, or even desirable for your people to express their ambition and acknowledge that they’re interested in opportunities outside the team, then good for you. The consumer research organisation Nielsen has won recognition for its “Ready to Rotate” initiative whereby all staff were encouraged to flag their interest in new roles or stretch projects. Good people are likely to move on if they’re not growing, so encouraging your people to leave to enable that growth may keep them in the company, even if they’re not in your team.

Do you make sure your team know you want them to show interest in other roles outside of the team – that it’s not a betrayal, but something you welcome?

2. They don’t have a problem with talent going outside the company

I’ve seen leaders dragged across hot coals for this by CEO’s. But the potential damage really depends on how you handle it. Some leaders take this defection as a personal insult and make the exit as uncomfortable as possible. One of my previous bosses refused to speak to me for six weeks after I resigned! LinkedIn took a different approach. They invited ex-employees, who’d gone on to great new roles, to come back and share how their career had progressed with current LinkedIn employees. They celebrated the fact that, as a result of their time at LinkedIn, they’d accelerated their career. The US healthcare company DaVita make a conscious effort to keep in touch with ex-employees, with a view to re-hiring them at some stage. In fact, around 15% of their “new hires” have worked there before. Given that many of us are likely to move roles within our sector, great leaders can turn losing talent to a competitor into a positive.

How do you react when your great people leave you? Do you make it a positive experience and keep the door open for a return?

3. They don’t see their team as a ‘family’

We have a tendency to value “parental leaders”. Their motives are often admirable. They want to protect their people from an uncertain world, keep them safe, not upset them and above all, retain them in role and within the team. I have worked in some very parental cultures and I’m convinced that this ‘kindness’ is damaging for our people. Being over-protective means that we prevent our people from developing their ability to use their judgement and the resourcefulness that’s essential for succeeding in a disrupted world. The pace of change means that leaders cannot possibly map out career-path certainty for their staff. By retaining them in role for so long that they weaken their ability to secure stretching employment elsewhere is surely abdicating our responsibility as leaders? Great talent leaders avoid the parenting and instead of creating a ‘family’ with themselves at the head, they work together with their people as adults. In talent terms, this requires leaders to make an honest appraisal about which roles in their team may need to be refreshed within say, 12 months. It means putting career management responsibilities into the hands of the employees themselves. It means encouraging their people to become increasingly employable and attractive to the outside world and avoiding any misguided (and occasionally selfish) temptation to let them stay in role for too long. 

Are you parenting your people or are you treating them as adults?

4. They neglect their high-potentials

Ok, so not ‘neglect’ exactly, but our almost obsessive fixation on focusing on the needs and ambitions of the elite is out of touch with today’s world. The fact that 73% of high-potential programmes show no ROI hasn’t stopped them being implemented. The issues with placing our leadership bets on a favoured few are two-fold. Firstly, as a leader, you are going to struggle to identify high potential with any real accuracy. It’s not because you’re stupid, it’s just that we suffer from “rater bias” and so our assessment of who’s going to be great in the future and who isn’t, is always going to be somewhat flawed. Secondly, potential is always contextual and we have an increasingly limited understanding of what will be required in the future. No matter how good the instructions on the 9-box grid that your HR partner gives you, trying to identify and invest in a small group of people who will be the next generation of leaders is a fairly futile exercise. Great talent leaders of the future will steer clear of hi-po programmes and will instead think about how they create environments where the majority of their people can stretch, can play to their strengths and take advantage of opportunity.

Do you focus your talent efforts on the many or the few?

5. They don’t find their successors from within their team

Once seen as admirable, the concept of only recruiting from a narrow internal pool feels increasingly risky for today’s leader. When I was involved in creating leadership succession plans, the interjection of an external was either seen as a failing of the leader to produce an heir, or the need for a ‘benchmark’ candidate to make sure the internal nominee was up to scratch. But now, we would have to question the desirability of any succession plan with only current team members on it. With increasingly flat leadership structures, it is often really tough for the next tier to get the experience they need to take the top job. Only drawing from the names you know and trust results in a lack of diversity and ignores a wealth of talent with fresh perspectives. Of course it’s important to grow your own, but equally, great leaders of tomorrow will take a broader view of potential successors and will build a community of future talent that extends beyond the borders of their team and their company.

How are you fostering relationships with potential successors outside of your immediate team and outside of your company?

We need to cast off some of our misconceptions of what a great talent leader is and does. We need to let go of the idea that good leaders should be judged by how many people they retain and how long people stay with them. Retention and length of tenure will not necessarily equip our organisations for the future and the better leaders will be brave enough to acknowledge it.

As an HR Director, I spent most of my time on the people whom my processes had designated either as our elite or our problem children. The top 10 percent — the super-talent in our top right-hand box — were showered with attention through fast-track programmes, promotions and higher bonuses. Meanwhile, at the other end of the scale, the ones we didn’t trust, were the motivation behind the vast majority of our HR policies and processes. There are serious downsides to this approach, the main one of which is staring us in the face: we’re ignoring the vast majority of the organisation. I don’t think we can afford to do this any longer, and here’s why.

Letting the Stars fend for themselves

Our primary vehicle for top talent is our High Potential Programmes but recent research by management consultancy CEB report that 73 percent of them fail to produce a positive business outcome. We shouldn’t be surprised by this statistic, as there are glaring errors in how we execute them; the following three problems ought to be sufficient for us to pause and question.

Our ability to define top talent is flawed

The data we use to identify high potentials is flawed by our outdated performance and talent management processes, which have an inherent rater bias. One of my clients was disappointed when, at the launch of his new High Potentials Programme, his opinion was that ‘out of 24 people, there were probably only seven who had any real potential’. This was despite HR spending several weeks nailing the right criteria and coaching senior leaders to help them make sound decisions. How many times have you looked at your Hi-Po nominations and thought, ‘Really? Are they actually the best?’ In my experience we recommend people for this status for a whole range of dubious and subjective reasons: the most common being the person is a perceived flight risk, as an alternative to a pay rise, and because of not knowing how to say no. When I was at Serco, for instance, we ran a leadership course in which it regularly transpired that about half the delegates weren’t as high performing as we’d assumed they were. They’d been sent on it because they had a great relationship with their boss or were doing a job that played to their strengths, but when they were later promoted into a management role they often didn’t perform well.

High Potentials Programmes are inherently divisive

These programmes create a group of perceived favourites, who now have the additional burden of high expectation on their shoulders. What’s more, these anointed ones can become frustrated by a lack of immediate promotional rewards now they’ve been earmarked as ‘special’. This results in a group of pressured, insecure leaders and managers with an insatiable appetite for reward and success — a toxic combination. If you need any convincing that focusing on the ‘stars’ is damaging, check out this wonderful TEDTalk by Margaret Heffernan.

The programmes lack transparency

Leaders worry about the neglected 90 percent discovering they’re not in the elite group. According to CEB, this results in up to a third of businesses concealing from the high potentials that they’ve been identified as such, creating the crazy situation in which the organisations have a group the members don’t even know they’re in!

Like many of our traditional HR talent tools, the High Potentials Programme belongs to a different age — when careers were more linear and predictable, when structures were less flat and when ‘career paths’ made sense. Fortunately, we’re seeing talent management evolving to recognise that we have to widen our focus away from a tiny minority including:

HR teams are beginning to cater for the majority rather than an elite few. The truth is our best people will always be okay, ensuring their voices are heard and pushing for the best opportunities. We don’t have to worry about them too much.

Not letting the Rogues run the show

On the other hand, there’s a danger inherent in designing change around the rogue minority. When we do this, we inflict constraining policies and processes on people who are capable of more, and who have no intention of behaving in the same way as the bottom 10 percent in any case. It’s tempting to tell ourselves if the policy or process doesn’t apply to the 90 percent they can just ignore it, but there are three main reasons why this isn’t good enough.

It discourages innovation and pro-activity

When we force people in the majority to carry out a process designed for the lowest common denominator, we patronise them and — even worse — sap their ability to think for themselves. How irritating is it to be treated as a poor performer when you know you’re not? Does it make you feel like you want to do your best work? Do you feel confident taking a risk that might result in a mistake, when you know the outcome will be a tutting re-write of the company’s procedures manual? This is not a recipe for encouraging people to be brilliant.

It deters poor performers from improving

A brilliant article in the Harvard Business Review refers to this as the Pygmalion Effect. In George Bernard Shaw’s play, Eliza Doolittle famously says: ‘You see, really and truly… the difference between a lady and a flower girl is not how she behaves but how she’s treated. I shall always be a flower girl to Professor Higgins because he always treats me as a flower girl and always will; but I know I can be a lady to you because you always treat me as a lady and always will.’ If we design HR services around people with the assumption they can’t do something, the chances are they won’t; in other words, if we assume they’re useless managers that’s how they’ll behave. On the other hand, if our starting point is they’re capable of managing well rather than us constantly compensating for poor behaviour, we’ll most likely see an improvement.

It rewards poor behaviour

When about to launch a new HR product or approach, most of my energy went into trying to persuade the most negative managers or employees that it was a good idea. Every roadblock they put in the way resulted in delays, compromises or occasionally, giving up. When we spend lots of time on our ‘problem children’, when we lavish them with our undivided support and attention, where’s the incentive for them to change? Why didn’t I simply exclude them? I was recently working on the introduction of a new form of bonus within a media company. Most of the managers liked the idea. It meant they would have their own budget to make discretionary and timely rewards rather than having to be part of an annual and centrally organised bonus scheme. The ones who resisted were worried that having to explain to people in their team why they had chosen to give a reward to one person but not another would be too difficult. Instead of compromising and creating lots more rules and guidance for managers (which would have diluted the positive impact), we decided just to leave the objectors out of the new scheme on the grounds that this was their choice. The impact was fascinating. Many of them changed their mind – worried about being left out. By treating them as adults and ignoring rather than rewarding their negative behaviour, the better managers got the scheme they wanted.

So let’s not worry about the outliers. The best will be fine with or without your help, and if you gear your actions towards the worst you’ll only stifle the rest. That doesn’t mean you shouldn’t have any policies or procedures aimed at these groups, only that they’re best left as back seat passengers rather than being in the driving seat of our HR ambitions. It’s the 80 percent in the middle who should be the main focus of our attention; our job is to cater for everybody, not to nanny and control the minority.

 

 

 

 

Over the last few weeks I’ve been looking at the traditional repertoire of talent management tools and techniques. I’ve been doing the easy bit – dissing the old favourites like the 9 Box Grid and Hi-Po Programmes but not putting forward what might work instead.

Continue reading Old vs New Talent Management