In the past, the typical wealth-creating enterprises of the advanced industrial societies were either labor-intensive – as coal, mining or textiles – or capital-intensive – such as chemicals and steel. Today, many of the world’s major corporations are best described as knowledge-intensive or talent-intensive. The obvious examples are companies in the fields such as software, pharmaceuticals, business and professional services, investment banking, music publishing, entertainment, and professional sports. Many of the dot.com companies such as Amazon, Google, and eBay fall into this group. In such organizations, the principal assets consist of the knowledge and special skills of talented people, rather than the tangible assets of financial reserves, capital equipment, building and stocks of the so-called old economy.
The management of knowledge has become a lucrative field for management consultants and academic gurus in the recent years and it is obviously important that a company should exploit its knowledge capital to the greatest extent possible. Sooner or later, however, all of today’s knowledge will be obsolete. The competitive edge lies with companies that are focused in creating new knowledge. The value of a research laboratory to a potential investor is the ability of its scientists to make new discoveries and develop new products in the future.
In a world in which there is no shortage of capital for investment, talent is the only remaining scarce resource. However, the kind of talent needed by many of today’s business is not necessarily of the kind that was in demand in the past. Fashion designers, international footballers, creative writers, successful investment analysts, investors such as Warren Buffet, entrepreneurs such as Richard Branson, Web site designers, and others possess marketable skills that have little to do with their ability to absorb knowledge. This explains why outstanding performers in many fields did not enjoy academic success in their schooldays.
Characteristics of Talent Intensive Organizations
Talent-intensive organizations share several characteristics
- Their principal assets (that is, their talented people) do not appear on the balance sheet (although they are, or should be, the main determinants of the company’s market valuation).
- These key assets are mobile. They can, despite contracts of service, simply walk away.
- Talent-intensive organizations rely particularly on creativity and imagination.
- The success criteria for talent-intensive organizations stretch far beyond the accountants’ bottom line. Winning a Nobel Prize, an Oscar, a fashion design award, or the World Series may weigh far more than profit or cash flow does.
The International Dimension
Like so many other activities, recruiting is now affected by globalization. Companies increasingly understand that they must adapt their human resources policies to a highly competitive global market for talent. There is a constant flow of talented people from countries with lower living standards or higher levels of personal taxation to countries where talents can enjoy a higher reward – the so-called “brain drain.”
Recruiting managers should try to include at least one global candidate in every key search. They should also consult with senior management on the question of where in the world the work (and the workforce) should be positioned in order to maximize its cost effectiveness.
Recruiting and Finding Talent
The distinction between recruiting talent and finding it is important. Sometimes an organization looks outside for new talent when the potential for outstanding performance already exists unrecognized among existing employees. Recruitment itself can be separated into two distinct processes. The first is that of attracting people whose exceptional talent has already been established and recognized elsewhere. This can be called the transplanting type of recruiting – equivalent to digging up a mature tree in the quest for an instant garden.
In such instances, companies often make the mistake of assuming that the cash nexus is the most important factor. While it is obviously true that an outstanding performer in any field is unlikely to move from one organization to another if it involves a drop in remuneration, it remains the case that other factors are seldom given enough weight or consideration. For example, in the case of highly talented people, a key influence on the decision on whether or not to move jobs is the reputation of the recruiting organization in its particular field; is it at the leading edge, does it set the pace for its industry, does the individual feel honored to have been approached? Reputation building, therefore, is a key element in recruiting strategy.
Top companies like Dangote Industries, Transcorp Holdings, First Bank Plc., Access Bank, BUA Industries, Apple, Microsoft, Dell, Wal-Mart, and Intel have been focusing on employment branding for years. Nothing has a greater impact than being talked about in the media as a well-managed company that is also a good place to work.
Research shows that the best source of quality applicants comes from an organization’s existing employees. If employees are proud of their employer, and enjoy a high level of job satisfaction, the result will be one or two quality employee referrals for every vacancy.
The “Nursery” Approach
The second process can be termed the “seedbed” or “nursery” approach: recruiting young people straight from the university or college, nurturing or developing their emerging talent and bringing it to fruition. This is clearly a long-term approach and one fraught with obvious risks, one in which is the difficulty in predicting ultimate success. The obstacles in the way of successful prediction are many, including:
- Different rates of maturing of individuals’ abilities – late developers are often missed;
- The relative weakness of psychometric tests when it comes to predicting things like creativity and entrepreneurial ability;
- The tendency to give too much weight to academic qualifications;
- Failure to value diversity with regard to the workforce – a great deal of fine talent is overlooked among ethnic minorities, particularly when the selection process involves using psychometric instruments that have been validated within the major ethnic groups.
- The fact that motivation and drive may well be more powerful determinants of performance than sheer ability.
Talent Spotting
Somewhat less risky is the process of finding talent among existing employees. Assuming they have been in employment for some time, a well-designed appraisal and development procedure can be effective in selecting promising candidates for accelerated development.
Michael Howe, former Reader in Human Cognition at Exeter University, England, was one of the world’s leading experts on the subject of talent. He pointed to the danger of seeing talent in any field as a gift which you either have or not, as the case may be. He said, “We are easily convinced that the most striking feats must depend on circumstances which, except for certain rare individuals, are entirely unattainable. Some of the most widespread beliefs about exceptional people revolve around the view that certain individuals are not only remarkable but inherently so, while the remainder of us are doomed to ordinariness.”
He challenged such beliefs and produced compelling evidence that appropriate training and development can bring about exceptional performance. His views were borne out by the achievements of participants in the former TV series Faking It USA in which, for example, a go-go dancer with no previous experience of horse riding became a successful show jumper within few weeks.
Keeping Talent
When it comes to retaining talent, it goes without saying that there has to be an adequate compensation package. What makes the real difference in keeping talented employees loyal is the extent to which the company provides them with a working environment favorable to creativity, self-expression, and the exercise of initiative.
The paradox facing organizations, particularly very large ones, is that they are hierarchical, bureaucratic, and conformists in order to achieve efficiency and uniformity, yet it is just these characteristics that turn off highly creative people.
The term “skunk works” has entered the language of organizations to describe, small, informal, tightly knit teams that are shielded from standard company practices and rules in order to foster their creative energies.
Warren Bennis gave a graphic description of the very first skunk works, established by Lockheed to develop the first US jet fighter during the World War II. Lockheed’s chief designer selected a team of 23 engineers and 30 support staff. They built make-shift quarters from discarded engine boxes roofed with a circus tent. They worked in secrecy, doing their own cleaning and secretarial work. Bennis described the designer Johnson as “a visionary on at least two fronts: designing airplanes and organizing genius. Johnson seemed to know intuitively what talented people needed to do their best work, how to motivate them, and how to make sure the desired product was created as quickly and as cheaply as possible.”
His unit was characterized by the egalitarian treatment of people, an absence of paperwork, informality of dress, and open debate. The culture of an organization is an important factor in its ability to retain talent.
The chief characteristics of a culture that nurtures talent are the following:
- Highly cohesive work teams
- Authority residing in expertise and competence rather than rank or status
- Elites recognized without elitism in that talented people respect and recognize the contribution of those less gifted coworkers who support them
- Respected leadership: talented people are critical people who do not follow blindly, and knows when the emperor has no clothes
- Freedom, autonomy, space, and flexibility
- Openness and trust
- Encouragement of risk-taking
In other words, the right approach for organizations anxious to retain their most talented people is not so much to create a skunk works inside the company, but to make the company as a whole as much like a skunk works as possible.
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